Sterling rallies after UK inflation stays high – Will the pound gain strength this...

The Pound rallied and saw some gains in the recent week finishing at 1.1423 against the Euro and 1.2392 against the Dollar. The pound strengthened after the UK labour market data on Tuesday displayed a new record high for UK wages showing the UK is nowhere near finished with high inflation thus putting pressure on the Bank of England (BoE) to raise the interest rate by 50 basis points. This upswing in the Pound continued after Wednesday showing a smaller than expected decrease in inflation...

Pound hits monthly highs against the Euro and Dollar – will the rise continue?

Pound hits monthly highs against the Euro and Dollar – will the rise continue? Sterling rose to monthly highs against a number of its major counterparts during yesterday’s session following stronger than expected inflation data. The pound rose against both the euro and the dollar during the most positive session of the year for the currency. A transfer of £200,000 is buying €4000 and $11,000 more than the low of the last four weeks. ONS data showed that UK inflation dropped from 10.7% to 10.5%. Inflation has...

Could UK Inflation Data Influence GBP Exchange Rates This Week?

The Pound begun the week in an uneventful fashion after trading within thin ranges throughout Monday’s trading session. The Pound to Euro exchange rate remains quite rangebound at the moment, mostly trading between 1.1250 to 1.1300 with no signs of a breakout from this range at the moment. This morning is a good example of this trading pattern, with the pair hitting exactly 1.1250 before rising slightly. Jobs data released this morning has done little to influence GBP exchange rates although perhaps tomorrows inflation data could...

Will the pound get stronger? Growth figures show a surprise positive reading on Friday

The UK looks set to avoid a recession in 2022 as GDP data was announced on Friday. The UK economy grew by 0.1% in November, with the services sector providing a welcome boost when a 0.2% expansion was announced. This came as a surprise to many forecasters, with a 0.3% GDP contraction the market expectation. Despite this, the pound failed to make any significant gains against the Euro, finishing the week trading at 1.1280 – a near 0.75% decrease since markets opened on Monday. The Pound...

Why is the Pound dropping against the Euro?

Pound Euro close to 4 month lows The Pound Euro exchange rate is now close to its lowest level since September of last year. The Pound has been experiencing a difficult period vs the Euro for weeks since the start of December. The sudden turn of fortune for Sterling could be attributed to what happened in early December. The Bank of England hiked interest rates once again but the European Central Bank countered that by also hiking interest rates for the first time in months. This could be taken...
GBP USD Slips Ahead of BoE Rate Decision

US Dollar improves against the Pound and the Euro

US Dollar vs Pound hits 3 week high The US Dollar vs both the Euro and the Pound has started to increase once again ahead of the latest US employment data due out later today. The US ADP jobs report published yesterday was stronger than expected and this has provided further levels of support for the US Dollar. The most recent Federal Reserve minutes were also published this week which has signalled that we could see further interest rate hikes moving into this year. As we look ahead...
GBP EUR: Halifax Sees Signs of Housing Slowdown

What to expect from GBP exchange rates in 2023?

Looking back on 2022, GBP exchange rates had one of the most volatile years on record especially against the US Dollar. After such a bumpy ride for the Pound you may expect to see less volatility for GBP exchange rates but with economic growth set to drop this can never be ruled out, especially at the beginning of the year. To recap 2022, GBP/USD experienced its worst annual performance since 2016 which was an exceptional year owing to the unexpected Brexit vote which caught the currency...

What will 2023 Bring For Sterling Exchange Rates?

Sterling exchange rates have dropped on the whole throughout 2022 and it is fair to say there are a number of quite obvious reasons behind the poor performance of the pound over the course of the year. Here is a summary of GBP paired against a selection of major currencies and the movement since 1st Jan 2022 as an example. GBP/USD -10.79% GBP/EUR -4.97% GBP/CAD -5.44% GBP/AUD -4.69% GBP/CHF -9.97% All in all, the above suggests the pound indeed had a torrid time of it, most notably shortly after Liz Truss...

How will the pound perform as we end 2022 and what will the pound...

The pound has been mixed in December with a strong performance as we started the month, only for the Bank of England meeting last week to see confidence fall as interest rates were raised 0.5% versus the 0.75% some had anticipated. Inflation, one of the key metrics influencing monetary policy has also been seen to be cooling or possible peaking, removing some of the more immediate urgency for the Bank of England to act with further aggressive interest rate hikes. Interest rate hikes are typically supportive...

The Pound loses momentum, could next year bring further falls for GBP exchange rates?

GBP exchange rates have cooled during the month of December, with GBP/EUR and GBP/USD both easing from the 3-month highs they begun the month trading at. There had been a considerable upward momentum for GBP exchange rates after Jeremy Hunt became Chancellor of the Exchequer and reversed the questionable tax cuts made by the previous Chancellor. Rishi Sunak replacing Liz Truss also buoyed the financial markets sentiment towards the UK economy and this helped give the Pound a boost, but perhaps the honeymoon period is...