The pound ended the month of February in a positive state following positive signals from Rishi Sunak’s Windsor Framework. The pound rose to its highest against the Euro since January 20th, moving comfortably above the 1.14 interbank rate.
The concerns over the Northern Ireland protocol had done little to lift the generally bleak view for the pound as we entered 2023, but signs of a thawing in the frosty relations between the UK and the EU have been well received by financial markets.
Is this a sign of a turning point in post-Brexit uncertainty, and the beginning of a more healing and mutually beneficial relationship across the Channel and the Irish Sea?
Or is this just a bounce, a light relief rally relating to some slightly better than expected news, against a grain of generally more negative views for the UK and the pound in 2023.
The rise and the pound’s best level against the Euro since the middle of January is certainly most welcome for Euro buyers, and might be a cause for concern for clients holding dollars, euros and another concern considering a GBP purchase.
Sterling and the forecasts had been pretty grim at the turn of the year but the mood music has changed with better economic data and signs inflation, arguably one of the biggest challenges the UK economy faces, is consistently falling.
Looking ahead, there are some key events in March to consider. The 23rd March sees the latest Bank of England interest rate decision, before this on the 16th March we will see the latest European Central Bank decision. We also have on the 22nd the latest US interest rate decision.
All of these events could be pivotal for the pound against not only the Euro and US dollar but also many other currencies concerned.
For more information on the latest news and forecasts ahead for the pound please do get in touch. We are specialist foreign exchange brokers and can assist with a proactive service to help you guide you through the markets and help to maximise your FX payments.