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...
Will the pound rise or fall on the Bank of England decision?
Tomorrow is arguably one of the most important days for the pound this month with the latest Bank of England interest rate decision. Investors will pay close attention to this event to determine the latest twist and turns in economic policy, and it can shape behaviour of the relevant currency.
Typically, the raising and lowering of interest rates by a central bank will lead to changes in sentiment towards that currency, by making it more or less attractive to hold. This is in a similar...
Pound hits record low against the US Dollar, and drops significantly against the Euro
Yesterday was a very difficult day for the Pound as financial markets appear to have lost faith in both the Bank of England’s monetary policy and the new cabinet’s mini budget.
Last Thursday the new Chancellor of the Exchequer, Kwasi Kwarteng announced his mini-budget outlining plans for a raft of tax cuts. Then over the past weekend he pledged further tax cuts in order to try and reinvigorate the UK’s stalling economy and attempt to counter the increasing inflation rates not seen in decades.
His plans...
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...
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...
Pound Sterling stages comeback following Bailey comments but remains fragile
The pound enjoyed a positive session yesterday with gains against every major currency. However, the gains only brought sterling exchange rates back to similar ranges seen for the last few days. Sterling opens the day slightly softer across the board.
Governor of the Bank of England Andrew Bailey prompted a sterling sell-off late into Tuesday’s session. He stated that the bank would remove its current emergency support for the UK bond market on Friday and that pension funds heavily invested in UK government bonds (known...
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...
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...
Will the Pound vs the Euro continue to fall this month?
UK Retail Sales show a decline and the impact on GBPEUR rates
The Pound Euro exchange rate has been slowly falling lower each day over the course of the week as the UK economy fails to provide much good news.
UK Retail Sales showed an increase of 0.5% in January after falling the month before according to the Office for National Statistics.
However, sales compared to twelve months ago showed a fall of 5.1%.
With consumers being heavily impacted in the UK by the cost of living crisis...
