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...
Red hot week for economic data, as temperatures across the UK plummet
Things have been looking brighter for the pound in recent weeks and the pound finished last week strong, after suffering a near two and a half cent (1.2345 to 1.2106) slide against the greenback (GBP/USD) from Monday to Wednesday. The pound has benefited from an improved ‘risk on’ appetite in recent weeks and responds well to positive news. Cable finished the trading week on the 1.23 handle.
The positive news in question relates to recent comments from US Federal reserve chair Jerome Powell’s comments around...
Will the Pound continue to improve against the US Dollar?
Pound Dollar rates hit 3 month high
The Pound vs the US Dollar is now trading at its best levels to buy US Dollars with Pounds since the end of August.
With the Pound improving this has created some good opportunities for those looking to convert Pounds into US Dollars.
The US Dollar has slowly begun to weaken following falls in US inflation recently as it appears as though the Fed's policy of interest rates has started to work.
Inflation is still extremely high in the UK whilst...
Pound Sterling Forecast – Sterling starts the week on the front foot
Sterling exchange rates have started the week off fairly positively against most major currencies, most notably continuing the strong finish to last week against the Euro, with GBP/EUR now sat above 1.1650.
The reason this pairing in particular has moved in Sterling's favour more than others is down to the ECB (European Central Bank) interest rate decision and press conference delivered by Christine Lagarde on Thursday.
The ECB did raise interest rates as expected, however there was a slightly dovish tone around this hike, there were...
Pound Sterling rises as Sunak expected to be third Prime Minister in a matter...
The pound has started off the week on the front foot against all major currencies, following another weekend of political twists and turns for the UK.
As we headed towards the end of an eventful week, news broke that ex Prime Minister Boris Johnson was heading back from a Caribbean holiday to have a crack at regaining his position at number 10, something that seemed a million miles away only a few weeks ago.
As most readers will know, the UK is full of surprises at...
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...
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...
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...
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...
