The Pound holds onto yesterday’s gains, but where to next for GBP exchange rates?

Sterling exchange rates saw a small relief rally yesterday after news broke that the Northern Ireland Brexit deal has been agreed between the UK and the EU.

After recently dropping below 1.20 against the US Dollar, which is a key threshold the GBP/USD pair broke back above this level with the Pound climbing by roughly 1% against the US Dollar. There were also gains for the Pound against the Euro although not to the same extent. GBP/EUR remains in the 1.13’s with the pair remaining rangebound over the past week.

The Brexit deal relating to the Northern Irish protocol has been a key topic for some time now, and with this new agreement there are hopes for more positive cross-border trade in future. The president of the European Commission Ursula von der Leyen was in the UK and met with UK Prime Minister Rishi Sunak to help get the deal over the line.

Brexit talks had taken a back seat in terms of financial headlines more recently, but yesterdays market movement shows that it still carries the potential to move markets, so as ever it’s worth following any key updates whether positive or negative.

There has also been some economic updates this morning in regards to the increasing inflation data within the UK, although the Pound remains quite subdued despite some concerning figures being released.

Research from Kantar suggests that the cost of food and drink is rising at a rate of 17.1% compared to figures from this time last year. This is the highest rate since their records begun in 2008.

Households now face an increased £811 increase in shopping bills if they keep the same shopping habits, and the data also showed that one in four households are struggling financially.

Increases such as this could force the Bank of England to act in regards to monetary policy moving forward, which can impact GBP exchange rates so these kinds of data releases are worth following.

If you would like to be alerted to any major market movements relating to the Pound, or would like to obtain competitive quotes from an industry leading currency brokerage, please feel free to register your interest with me. You can contact me (Joe) on [email protected] with an outline of your plans, and I’ll be happy to offer you some insight along with quotes.