Will the Pound continue to climb this week, and how could the BoE’s meeting influence it?

The Pound climbed in the lead up the Spring Budget last week and following it, Sterling exchange rates continued to climb as markets seemed impressed by the rhetoric outlined by the Chancellor.

For the first time in just over 3-months, GBP/EUR broke above 1.1400 and managed to consolidate its position above that key threshold. The reason I believe that 1.1400 is a key threshold and the Pound managing to break above and consolidate above this level, is because it had previously been tested on three occasions but to no avail.

Between December and last week, GBP/EUR had attempted and failed to break above 1.1400, and now that it has thanks to some positive news for the UK economy, it will be interesting to see whether the pair can continue this upward trend.

The Chancellor of the Exchequer, Jeremy Hunt believes that the UK won’t fall into recession, and this headline comment along with other signs of stability for the UK economy are what pushed GBP exchange rates higher.

This week could also see movement for GBP exchange rates, as the Bank of England’s interest rate decision will be announced on Thursday. Previously there had been expectations of a 50-basis point hike but this expectation has turned in recent weeks. There is now just a 31% chance of a 25-basis point hike with most analysts expecting rates to remain unchanged.

Perhaps an unexpected hike could push the Pound higher, and the decision takes place on Thursday so please feel free to register your interest with us if you wish to be updated regarding any market movements for GBP.

Tomorrow core inflation figures for the UK will also be released, with expectations for the rate to drop below 10% for the first time since August of 2022.

If you would like to discuss an upcoming currency exchange, exchange rates or any potential market moves regarding your transfer please feel free to get in touch. You can contact me (Joe) on [email protected]