Will the government perform a U-Turn? Impact on GBPEUR & GBPUSD Rates

Will a u-turn be coming for the current government? Three weeks ago the Chancellor Kwasi Kwarteng announced his mini-budget. This caused a huge sell off for Sterling exchange rates. It also caused an issue for bonds and UK mortgages. However, since then the Pound Euro and Pound US Dollar has also improved. Indeed, Sterling Euro rates are currently close to a 2 month high creating some excellent opportunities to buy Euros with Pounds. The Bank of England recently stepped in and spent a huge amount of money to...
GBPEUR UK election: Why haven't pound to Euro exchange rates fallen?

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...
 GBP EUR Higher After Inflation Hits Another High 

Bank of England and mini budget – The impact on Sterling exchange rates

The Bank of England increased interest rates for the 7th time in a row by 0.5% to take the base rate up to 2.25%, which was the biggest single rate hike in years. This caused the Pound to fall briefly against both the Euro and US Dollar as there were some predictions that the Bank of England may have raised rates by as much as 0.75%. As this didn’t happen the Pound plunged almost immediately after the announcement but managed to reverse some of...

Fed hikes interest rate by 75 basis points with key BoE meeting looming

Yesterday evening the US federal reserve raised interest rates by 75 basis points. Raising the policy rate from 2.5% to 3.25%. This is the third 75 basis point hike in as many meetings by the Fed, highlighting again their intention to take a strong stance on inflation levels that have spiralled out of control. "The committee is strongly committed to returning inflation to its 2% objective," the Fed said in a statement. Markets now expect US interest rates to finish the year above 4%. For...
GBP EUR Could Head Lower After Growth Revisions

Three Key Events in a Vital 72 hours for GBPEUR and GBPUSD Exchange Rates

The beginning of this week in the UK was very sombre with Her Majesty’s funeral and a UK Bank Holiday. This meant UK markets were shut, and ensured a fairly sleepy start to the week from a currency perspective, with sterling still nestling in the doldrums following the poor Retail Sales data from last week. The rest of this week looks far from calm however, with three key events that could trigger market movements for the pound, US dollar, Euro and many other currencies. The...

Pound rebounds following lighter than expected inflation figures

Wednesday’s trading session saw the pound on the front foot, gaining back some of the losses from the past week against a basket of currencies. Inflation data released in the morning showed price growth slowed in July for the first time since September 2021. Could this be a signal that the cost-of-living crisis has begun to ease in the UK? The Bank of England stated last month that they expect inflation to peak at 13%. The drop in price growth does pose an interesting question...

Will the Pound Remain Steady after Surprise Dip in Inflation ?

The pound has been relatively steady today following a surprise dip in the headline Inflation numbers. In welcome news across the country, the number came in at 9.9% higher year on year for August, versus the 10.2% numbers from last month for July. The important point is the number has been trending higher since the beginning of the year so this marks a turning point and could potentially signal a change in policy ahead. Inflation is very influential on interest rates, and interest rate...

US Inflation figures give Dollar a huge boost in Tuesday’s trading

The Dollar has had a really positive day of trading against both Sterling and the Euro, with a gain over 1% against both during the Tuesday trading session. This is mainly down to higher than expected inflation numbers, overall CPI (Consumer Price Index) figures were released at 8.3% as opposed to expectations of 8.1% and given the Federal Reserve’s robust stance on interest rates this has heightened the chance of further aggressive rate hikes in the months to come. For those that are not regular readers...
GBP USD Exchange Rate Drops to Fresh Low as Truss Becomes New PM

GBP USD Exchange Rate Drops to Fresh Low as Truss Becomes New PM

The pound slid as low as 1.144 against the dollar on Monday – its lowest level since March 2020 – ahead of the announcement of the new Prime Minister. When, as widely expected, it was confirmed that Liz Truss had beaten Rishi Sunak in the race to 10 Downing Street, the UK currency managed to claw its way back into the 1.15 range. Truss has promised tax cuts and a new energy plan within the week, which could present the Bank of England with the conditions...
GBP to EUR Forecast: Will Sterling See Further Losses Against the Euro?

Sterling exchange rates continue to slide – How low can the pound go?

Sterling exchange rates have seen further losses against both Euro and Dollar over the course of the trading week, as investors and speculators alike have made it clear there is a lack of confidence in the Pound at present. With the cost of living crisis bearing down on the UK economy and a prolonged recession on the cards we have started to witness a move away from the pound and it appears that it is being treated much more like a riskier currency rather than...