Sterling exchange rates vs the Euro have fallen by as much as 12 cents in 6 weeks and the current trend sees no signs of abating.
Sterling is due to fall even further as we start the week and I would not be surprised to see rates fall below 1.30 for GBPEUR rates.
UK GDP has been downgraded recently, Retail Sales have been affected by the warm weather, Industrial and Manufacturing data- the worst in 4 years and Chancellor George Osborne warning of a cocktail of risks for the UK economy and a difficult year ahead this is weighing heavily on Sterling exchange rates.
The possibility of a Brexit is also looming and causing investors to shy away from holding the Pound.
All this bad news for the UK is creating huge Euro strength giving Euro sellers some excellent opportunities to exchange Euros into Sterling.
Things could get even worse by Tuesday when the UK announces their latest set of Inflation figures.
Low inflation is one of the main reasons why the Bank of England has chosen not to raise interest rates and with oil prices still falling this is likely to keep inflation low and therefore discourage any signs of an interest rate hike for the UK this year.
Expectations for Sterling Dollar Exchange Rates
Sterling US Dollar exchange rates are now at their lowest level for 6 years as things look promising for the US economy. The Federal Reserve has recently increased interest rates and with potentially 3 more rate rises during 2016 the Dollar appears to be the currency of choice for global investors.
China has had a terrible start to the year with their stock market having been suspended on more than once occasion owing to the dramatic falls.
This has caused a big flight to safety and therefore huge Dollar strength vs the Pound over the last fortnight.
The US Dollar could get even stronger next week as the Chinese announce GDP data on Tuesday. Expectations are for 6.8% GDP for the world’s second largest economy but with such an awful start to the year I think the results could spell trouble and therefore this could push GBPUSD rates below 1.40 by the middle of next week. Good news for anyone looking to sell Dollars.
On Wednesday the US publishes its own set of Inflation data and if strong will add further support to future interest rate rises for the US and I think we could see Sterling USD rates drop below 1.40 next week.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]