Sterling exchange rates have rallied in a dramatic fashion after hitting both annual, and record lows in some cases, as recently as just 3-months ago.
During late August and early September, the Pound was in the headlines for all the wrong reasons when the disastrous and poorly planned mini-budget was announced. In the wake of the Chancellor at the times updates, the Pound fell to its lowest levels against the US Dollar on record and also stuck annual lows against the majority of major currency pairs.
Since then, Sterling has recovered much of the losses and even rallied in some cases with the rate of GBP/USD, known as cable within financial markets hitting a 6-month high and finding itself in the news for more positive reasons this time.
Not only has cable climbed in dramatic fashion (GBP/USD has climbed by around 14% since hitting 1.0350), but the GBP finds itself trading a long way from it’s annual lows against most major currency pairs such as the EUR, AUD, CAD and the NZD for example.
Moving forward the Pound’s performance will be hard to read as financial commentators with a bearish outlook for the Pound are putting the GBP/USD movements down to USD weakness rather than Sterling strength.
Personally I think when you factor how Sterling has climbed against multiple other currencies, we cannot rule out a more optimistic outlook for the Pound and the UK economy now there is a more stable government in place.
The next year isn’t expected to be plain sailing for the UK economy as a long but shallow recession is expected by financial commentators. I think the positive reaction to the spending plans of the new PM Rishi Sunak and Chancellor Jeremy Hunt have eased concerns for the UK though, and this is why we could see Sterling continue to climb especially if the Bank of England continues to hike interest rates to counter inflation.
The next interest rate decision from the BoE will take place on the 15th of December, which is next Thursday as these decisions are usually released on Thursdays.
If you wish to plan around this update, and would like to discuss exchange rates and timings, I will be happy to offer you a quote and try to help with timings.
You can contact me (Joe) directly on [email protected] and I will be happy to offer any insight we can, and provide you with a competitive quote.