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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...
GBPEUR Sees a Sharp Rebound with ECB Stimulus Plans

Pound hits lowest rate since ‘mini-budget’

Yesterday saw the pound weaken further against the euro, falling to the lowest GBPEUR rate since the now infamous Liz Truss/Kwasi Kwarteng ‘mini-budget’. GBPEUR was trading at 1.1257 during the low of yesterday’s session. The downward pressure on the pound begun a month ago now following the European Central Banks (ECB) decision to hike interest rates by 50 basis-points. The pound has lost 3.5% against the euro in the last 4 weeks. A transfer of £100,000 is currently buying €4100 less vs a month ago. In...
GBP AUD Pauses After a Recent Bounce Higher 

Interest rate expectations could be the main driver behind GBP exchange rates in 2023

Towards the end of last week we saw some considerable volatility within the currency markets as data releases, mostly US based resulted in some big swings for a number of currency pairs. Sterling exchange rates, particularly cable (GBP/USD) saw price changes of over 1% towards the close of the trading day as the Dollar weakened across the board of major currency pairs. There has been more of a risk-on attitude within the markets owing to expectations that US interest rates may not be hiked much higher,...

UK economy expecting a tough year – how will this impact the pound?

UK economy expecting a tough year – how will this impact the pound? Pound sterling exchange rates experienced a tough end to the year 2022. Throughout last year the Bank of England raised interest rates in an attempt to cool-off rampant inflation. This saw interest rates rise from 0.25% to 3.5%. The interest rate hikes initially provided support for the pound, but the last few BoE meetings have been surrounded with negative commentary regarding the UK’s economic outlook. The cost of borrowing in the UK has...
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...

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...
GBP EUR Rallies After Bank of England Rise in Interest Rates

BoE interest rate decision looms – will it help or hinder the pound?

BoE interest rate decision looms – will it help or hinder the pound? The Federal Reserve announced last night their latest decision to raise interest rates by 50-basis points. This move takes US interest rates to 4.5%, the highest level in 15 years. 50-basis points is the smallest hike since May after the Fed raised by 75-basis points at the previous four meetings. This decision was likely influenced by Tuesday’s CPI data which indicated inflation may have hit its ceiling. US CPI is at 7.1% vs...
GBP EUR Quietly Awaits UK Inflation Reading 

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...