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Will the Pound continue to fall against the Euro & the US Dollar?

By
Joe Wright
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Sterling begun the week in a subdued fashion and traded within a very thin range throughout yesterday’s trading session.

There was little economic data released pertaining to the UK economy outside of housing data, which showed that property prices rose by just £14 between January and February which is the smallest increase reported by Rightmove since the property website begun recording property prices.

Throughout the day GBP/EUR barely broke a trading range of 25 pips, and this morning this trend of thin ranges has continued although there are some releases later this morning which could potentially impact GBP/EUR rates.

UK Services and Manufacturing PMI data will be released at 9.30am this morning and both are expected to show further contractions in the sectors. A figure below 50 demonstrates a contraction within the sector, and the expectation this morning is for Manufacturing to show 46.8 and for Services to show a figure of 48.3. These sectors collectively cover close to 90% of the UK economy so markets are likely to follow these readings closely.

The trend since the start of 2023 has generally been a declining Pound when we compare it to other major currency pairs such as the US Dollar and the Euro.

In December GBP/EUR was trading close to 1.1700 and now the pair are just over 1.1250, and trading within thin ranges as mentioned earlier within this blog.

The US economy is stronger than many had expected it to be and the European Central Bank (ECB) begun hiking interest rates at a later date than the Bank of England (BoE) and this has put pressure on the Pound against both currencies.

How the UK economy performs, and the approach by the BoE is likely to drive GBP values moving forwards. If you wish to be updated regarding GBP exchange rate changes do feel free to register your interest with me.

You can email me directly on [email protected] to register your interest in receiving market updates, and we can also provide you with competitive quotes if you’re planning on making a currency exchange involving most major currency pairs.

Pound starts to recover against the Euro

By
Tom Holian
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GBP EUR Exchange Rate: The Week Ahead June 26th 

The pound managed a surprising recovery during the week to the 10th February, against the Euro the pound managed to climb 1 ¾ cents from the week opening to the week close (1.1160- 1.1330). Against the Dollar the pound managed to claw back a similar amount with the week high topping out just under the 1.22 handle.

As previously mentioned in these reports, the week prior saw a heavyweight clash from the 3 central banks, where the doubt was cast over the future of the Bank of England’s rate hiking cycle.

It appears the bank are in their ‘sunset’ phase with one more 25 basis point rise heavily tipped in next months meeting. Thus causing the pound to weaken.

Looking ahead the Chancellor Jeremy Hunt is due to present his Spring Budget on the 15th March, he has given assurances to the market he will not be pulling any rabbits from the hat next month given the need to reduce inflation.

A point worth noting is the Banks meeting is not until the week after (23rd) last time after the Truss/Kwarteng saga the bank were forced to act on emergency bailout measures to put a floor under Sterling.

Friday saw the latest round of GDP numbers out for the UK. Gross Domestic Product (GDP) is the a monetary measure of the value of all goods and services produced by a country in a specific timeframe. It is one of the key indicators of Economic growth.

December’s reading came out at 0.5% which was deeper than the forecasted 0.3%. On Friday the reading came out that the economy grew 0% in the final quarter of the year, meaning the UK avoided a technical recession by the smallest of margins.

Remember for an official recession, there needs to be two consecutive quarters of negative growth.

Nevertheless, 0% growth is not something to shout about, the data only highlights what many market analysts have mentioned around the difficulty the UK economic is expected to face in 2023. GDP in 2022 increased by 4% in the UK, down sharply from the 7.6% increase in 2021.

The pounds gains throughout the week were down to an unwinding in last week’s sharp selloff where the pound was ‘shorted’ across the money markets.

In addition, a slight shift in global investor sentiment after softer US data and communication from the Federal reserve members.

The Euro trended lower throughout the week as support for the single currency was dented by economic data.

Retail sales in the euro zone fell by 2.7% in December, lower than the 2.5% forecast. This is the biggest decline since April 2021.

On Tuesday German industrial production came in at -3.1% another heavy blow for the Euro. However, some more positive inflation data came out on Thursday as inflation dipped to 9.2% in January. Down from the 9.6% recorded in December.

This has also raised fears that the European Central Bank (ECB) may need to alter their recent hawkish tone around rate hikes.

The Eurozone has benefitted heavily from falling gas prices, with prices falling around 85% from the highs recorded in August amid lower demands thanks to a above average winter temperature across the bloc. Out look across the Eurozone has improved vastly from 3 months ago when the situation looked a lot more difficult than now.

Analysts on wall street feel the bloc is far from being in the clear as they predict a shallow recession will materialise later this year. Eyes will be focused on how economic data records in the coming months, any weakness could cap the Euros upside potential.

This upside potential and greater outlook for the Euro has been remarkable, at the start of November EUR/USD was trading around 0.97.

Today EUR/USD is trading around the 1.07 handle but has peaked as high as 1.10 at the start of this month.

As EUR/USD is the largest traded pair globally it can often suffer at the hands of booming US data releases such as the latest round of Non farm Payroll data where the Euro lost 1.5 cent on the days trading due to the positive data set.

The dollar wavered through the past week where it was intermittently bolstered by a shifting market mood.

Concerns over the Chinese Spy balloon caused initial support for the safe haven dollar on Monday.

The support didn’t last long as the Federal Reserve chair Jerome Powell gave a Dovish speech.

Powell avoided any clear indications on the banks forward planning with just one short statement on the matter, ‘ the disinflationary process, the process of getting inflation down, has begun’.

Wednesday saw a rally for the greenback after hawkish comments from Fed governor Lisa Cook who said that ‘the bank are determined to bring inflation down to target, I think we are not done with raising interest rates’.

US employment data remained historically low on Thursday, further supporting the dollar.

Global market sentiment deteriorated towards the end of the week with the Dow Jones (0.17%) and Nasdaq 100 (2.47%) both down and the FTSE falling by 0.24%.

The markets haver again began to realign themselves to what the federal reserve are planning to do with rates.

There are some suggestions traders are starting to price out US rate cuts by the end of the year following the strong Nonfarm data.

Keep a close eye on US CPI data this week, it is estimated to clock in at 6.2% down from the previous 6.5%. Any variation could cause volatility on the currency markets.

Market data this week-

UK

Mon- Average Earnings data, claimant count and unemployment rate

Tues – CPI data & Retail price index

Fri- Retail sales

Eurozone 

Tues GDP Q4

Weds Industrial production.

US

Tues- CPI data

Weds- Retail sales

Thurs- Building permits, Initial jobless claims, Philadelphia Fed manufacturing Survey

For further information or a free quote reach out to me directly Tom Holian [email protected]

Sterling remains robust despite the IMF downgrading UK growth prospects

By
Joe Wright
-

The UK is in the financial headlines for the wrong reasons this morning, after the IMF (International Monetary Fund) released a report downgrading the UK’s economic growth prospects.

Of the G7 economies, the UK is the only member whose economy is expected to fall into recession this year. The prediction is for a drop of 0.6% through 2023, which is almost a 1% drop from the previous prediction which was released as recently as October.

The reason for the downgrade is being attributed to increasing interest rates, high energy costs and tighter government spending. Last week within my blog I highlighted that there is little hope that the Chancellor of the Exchequer, Jeremy Hunt will be able to offer many surprises packages or bonuses during the Spring budget.

After a strong year of growth in 2022 the UK is facing quite a sharp correction according to these predictions, and this could impact GBP exchange rates moving forward.

Fortunately for GBP sellers so far this morning the Pound has remained robust, and it remains in the 1.23’s against the US Dollar and the Pound to Euro exchange rate is still testing the 1.1400 level.

The GBP/EUR exchange rate has remained very rangebound over the past few weeks, spending most of the time sitting within the 1.13 to 1.14 range.

This morning’s disappointing forecast from the IMF has done little to impact Sterling exchange rates so far, but there are further updates this week which could influence the Pound’s value.

On Thursday the Bank of England is expected to raise interest rates for the 10th consecutive time. A 0.5% hike is expected which will take the base rate of interest up to 4%.

This will be the highest rate since the 2008 financial crisis which will limit the spending power of the UK public which is likely to have a negative impact on the UK economy.

If you wish to plan around this week’s interest rate change please feel free to get in touch. We’re happy to offer our insight’s and offer competitive exchange rates to try and help you save money when making currency exchanges.

You can contact me directly on [email protected] with an outline of your transfer plans.

Could UK Inflation Data Influence GBP Exchange Rates This Week?

By
Joe Wright
-

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 have a greater market impact. In the early hours this morning UK labour market data showed that the unemployment rate remains unchanged at 3.7%. Job vacancies declined slightly, although it remains at a historically high 1.16m. Despite there being a high number of job vacancies, the drop in vacancies shows the jobs market is easing. Pay growth on the other hand showed signs of climbing and this may put pressure on the Bank of England to continue to hike interest rates.

Looking forward, tomorrow mornings Inflation data for the month of December will be followed closely for clues regarding the Bank of England’s monetary policy moving forward. The BoE has hiked interest rates at their last nine opportunities, and further hikes are expected. The inflation data tomorrow is expected to show a slight drop on the previous figure, although it is expected to remains in the double digits which is well above the BoE’s target. Inflation figures are likely to continue to drive the BoE’s monetary policy and this can impact the Pounds value so this release is worth monitoring tomorrow morning. Do register your interest with us if you wish to be notified regarding any major changes in the Pound’s value.

Aside from the Bank of England’s monetary policy, UK property prices could also influence the Pound’s value this year. A drop in prices is expected, and the UK economy can be heavily influenced by property prices due to the wealth of Brits generally shrinking.

If you’re planning on making a currency exchange involving the Pound and would like to discuss exchange rates along with market insights, please feel free to register your interest with me (Joe) on [email protected]

We can also set up rate alerts and offer a number of currency exchange contracts which may help you make the most of your currency transfer.

Sterling exchange rates against Euro and Dollar this week

By
Daniel Wright
-

As we entered the new year, sterling ended a turbulent week on the up against both the euro and the dollar after a wave of data across the continent and the pond was released. The pound finished the week over 0.5 cents higher (1.1360) than where it started (1.1290) against the euro and at similar levels to where it started (1.2060) against the dollar. The pound managed to recover over 2 cents alone against the greenback on Friday after early week losses.

The cause for sterling’s recovery after the new year on Friday came from the U.S ISM Services PMI read at 49.6 in December, 5.4 points below the reading of 55 that the market was expecting and a significant drop from November’s 56.5. The ISM or Institute for supply management services PMI measures the change in production levels across the U.S economy.

Any score below 50 shows a contraction in the largest sector of the U.S economy. If this drops below 50 creates expectations of an economic slowdown to take hold in the coming months for the states. Viraj Patel (Strategist) of Vanda Research states “US Services was one of the last shoes to drop before a recession. That shoe has now dropped”, meaning that the end of the interest rate hikes from the Federal Reserve are now expected.

Thus, giving investors a pro-risk outlook in their trading. Pro-risk is positive news for the pound; the pound benefits from markets rising and after this data release stock markets rebounded giving sterling the support it needed to make up for the weeks earlier losses.
The ISM report capped off a data heavy week for the dollar and the Federal reserve, with the labour market data and non-farm payroll figures also being of significant note.

Non-farm payroll data showed a positive figure of 223k more jobs being added, up from the expected 200k and a drop in unemployment rates to 3.5%. The expectation of another 50-basis point hike by the Fed has now moved to 25 in February.

Previously the European Central Bank warned that in the new year two more 50 basis points hikes were to come after December’s meeting, providing a 3-cent shift in the euros favour over the Christmas period. This trend of weakness was extended earlier in the week when core CPI data for the bloc came out at 5.2% year on year in December, up 0.2% from November.

This underpins December’s message from the ECB that the eurozone was not done with their inflation tapering strategy. Due to this we saw GBP/EUR fall to near its lowest levels since shortly after September’s disastrous mini budget falling to a low point of 1.1280.
Following Friday’s recovery can sterling break back above the 1.21 mark against the dollar and 1.14 against the euro?

The week coming, 9th January is a less data heavy week for the dollar and the euro but a more significant one for the pound towards the end of the week, with Friday brining Growth figures along with Industrial and Manufacturing production too.

Should you have a currency exchange to carry out in the coming days, weeks or months ahead and you would like the assistance of a proactive and competitive broker feel free to contact us here by emailing [email protected] and we will be happy to discuss your specific situation.

What to expect from GBP exchange rates in 2023?

By
Joe Wright
-
GBP EUR: Halifax Sees Signs of Housing Slowdown

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 markets off guard. GBP/USD also hit its lowest level in history last year when the pair almost traded as low as parity when cable (GBP/USD) dropped to 1.0350 in early September.

There were major falls for GBP exchange rates around this time due to the disastrous Mini-Budget. At the time Liz Truss was Prime Minister and Kwasi Kwarteng were the Prime Minister and Chancellor of the Exchequer with both having been replaced since. These changes (Rishi Sunak is now PM and Jeremy Hunt is the Chancellor of the Exchequer) have been welcomed by financial markets but the UK’s problems are far from over.

Sentiment towards the UK coming into 2022 had been positive as the Bank of England was the first major central bank to hike interest rates has inflation was steadily rising towards the end of 2021.

Inflation is now a very hot topic as the current rate exceeds 10% which is over five times that of the Bank of England’s target rate of 2%. This is forcing the BoE to hike interest rates to counter the increasing inflation levels, but this comes at a time of a cost-of-living crises and a prolonged recession being forecasted so 2023 could be another busy year for the Pound.

I predict that how the UK economy performs with year along with global sentiment is likely to influence the Pounds value moving forward. Improvements in global sentiment often boosts the Pounds value, and vice-versa.

Should you wish to discuss and plan a currency exchange involving the Pound, or any other major currency for that matter, please feel free to get in touch with me for insights and competitive exchange rates. We can also set up rate alerts for you too. You can contact me directly (Joe) at [email protected]

The Pound loses momentum, could next year bring further falls for GBP exchange rates?

By
Joe Wright
-

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 over and the impending drop in living standards as a result of rising inflation is beginning to impact the Pounds value.

Cable, which is the name for GBP/USD has eased from highs of almost 1.2450 just over a week ago has lost almost 4-cents during this timeframe.

At the same time GBP/EUR, which is often the main focus of our daily blogs has dropped from almost 1.17 and tested the 1.14 level this week and the mid-market level is trading just above this level at the time of writing.

The reality of increasing inflation and the drop in expected living standards next year which is likely to concern financial markets and potentially push the Pound lower as 2023 approaches. The Chancellor last laid out his economic plans in November and we know who that the next Budget will be held on the 15th of March next year. I expect economic data releases surrounding economic growth, inflation levels and economic plans laid out by the government to be followed very closely early next year as the markets will look to gauge whether the expected economic slowdown will be as deep as expected.

As the year closes economic data is relatively light but Thursday morning’s UK release of GDP is still worth being aware of. GDP covers economic growth and the 3rd quarter will be in focus with a drop of 0.2% expected. Any deviations from this level could impact the GBP, so please feel free to register your interest with our brokerage if you wish to be updated regarding any market movements.

If you plan on making a currency exchange, involving the Pound or between most major currency pairs, please feel free to get in touch for insights and competitive exchange rates. You can contact me (Joe) directly on jose[email protected] and I will be happy to offer my insights.

Red hot week for economic data, as temperatures across the UK plummet

By
Daniel Wright
-

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 a slowdown in the rate hiking cycle in the US. A 50-basis point hike was almost confirmed by Powell in Wednesday’s latest Fed policy meeting, a reversal from the recent string of 75bp hikes. The Fed are having to deal with a dip in the Inflation levels in the US. Recent data announcements for US inflation slow a drop in previous levels of inflation. Ultimately this has caused the Fed to slow down their previous 75bp bullish approach to rate raises.

The pound along with stocks have been put under pressure by the continual weight of US interest rate hikes throughout 2022, so this slight change in tone gives support for the pound. The relationship between the pound and the stock market is one to keep an eye on. The pound is known to have a positive relationship with the S&P 500, which is known as the benchmark for global investor sentiment. When investor confidence peaks, more money flows into the UK thus creating a demand for GBP. Traditionally the UK suffers from a current account deficit, as an island nation we import more goods than we export so buy more foreign currency than we earn in GBP. Greater flows of currency into the UK, will typically see the pound rally as the current account deficit is ‘plugged’.

In addition, China has recently announced a relaxation of strict COVID-19 protocols across the country. Zero-COVID Protocols have been in place across China for almost 3 years since the first outbreak began in early 2020. This change in approach from the second largest economy has given a small change in tone to investor confidence, which in turn supports the pound.

Against the Euro the pound was stuck within 1 cent range (1.1673-1.1571) throughout the week, with the pound again finishing the week strong with a rally closing the week nicely for Sterling. The pound finished the week at trading at 1.1670.

The week commencing 12 th December is a data heavy week across the world, this morning GDP figures for October in the UK were announced with a 0.5% reading for the UK released, a slight upturn in the 0.4% reading forecast. An uplift from the -0.6% recorded for September. Nevertheless, there are still stark warnings from the Chancellor Jeremy Hunt, that the UK faces a recession. The UK recorded a -0.3% growth figure for the most recent quarter, which means should this current quarter provide negative growth we will officially be in a recession. This positive news on GDP has yet to influence the pound this morning. Tuesday, we have US inflation levels, with 7.3% the forecasted down from the previous 7.7%. Thus, linking the comments earlier in the blog about why the Fed are having to alter their approach. Wednesday morning UK inflation levels are being released; a 10.9% forecast is expected down from the previous 11.1%.

Wednesday and Thursday are arguably the most important days this week, it sees the Federal reserve have their latest round of interest rate talks on Wednesday. It is widely expected a 50bp hike is set to be approved, taking US interest rates up to 4.5%.

Thursday lunch time the Bank of England are set to announce a further 50bp raise for interest rates in the UK. This means from December 2021- December 2022 the UK base rate will have increased from 0.1% – 3.5%, the bank is still consistent on achieving their 2% inflation agenda. An eyewatering rise for anyone who has had to secure finance from the banks in recent months.

One key piece of information to watch is how the policymaker’s vote. There are 9 policymakers who sit on the bank of England monetary policy board, they will all vote for what rate raise they deem appropriate. There are some reports there could be the first 4-way split since 1997, which could cause volatility on the pound depending upon how the results show. The markets will digest the split as to future approaches from the bank regarding rate raises. More votes skewed towards a smaller hike could in turn suggest the bank may also look to slow down on its interest rate policy in coming meetings as more members of the board are starting to share the same opinion.

The European Central Bank will also speak on Thursday afternoon to give their latest interest rate decision, the ECB are typically known as the more ‘laid back’ of the big three central banks. One of the key reasons as to why they are deemed ‘laid back’ is the Eurozone consists of 19 countries who all adopt the Euro as their currency, when the ECB raises rates, it effects 19 different economies who are all in contrasting economic condition. Germany often known as Europe’s powerhouse will have the same interest rate as Greece, a country with a troubled economic past. Consequently, they historically are more methodical in their approach to changing policy. This rate raise will take rates across the eurozone to 2.5%.

With the weather set to dip well below freezing across the UK this week it may be wise to speak to one of our highly experienced team and see if we can help you get your currency exposure wrapped up with one of our contract options.

There is a red-hot week of economic data lined up which can cause volatility swings, do not get caught out in the cold!

For further questions on how we can assist with your currency requirements please email us directly [email protected]

GBP exchange rates climb despite warnings regarding the UK economy

By
Joe Wright
-
GBP AUD Consolidates with UK Employment Due

The Pound begun the week in a volatile fashion yesterday, and traded in over a 1-cent range against the Euro after testing the 1.1650 handle once again.

We have now seen the GBP/EUR exchange rate test trading levels around 1.1650 at least 4-times in the last 3 months with yesterday being the latest example of this pattern. Yesterday morning during the earlier hours of trading GBP rebounded from the 1.1650 once again demonstrating that there is resistance at this level, so if you’re planning on making a transfer involving GBP/EUR, it’s worth keeping an eye out for this particular rate.

Sterling has also climbed recently against the US Dollar, which is based on a combination of Sterling strength coupled with US Dollar weakness.

As risk sentiment globally has increased recently, the US Dollar has cooled off after benefiting earlier in the year from concerns of economic downturn.

There is also uncertainty as to how much higher the FED Reserve plans on hiking interest rates, which could be another reason for the dip in the Dollars value.

This morning’s focus on the strengthening Pound may come as a surprise for some of our readers as just last week there were warnings regarding the UK economy over the next year. The OECD (Organisation for Economic Cooperation and Development) last week reported that the UK will suffer the biggest downturn in economic growth out of all the advanced economies.

Of the G7 group of countries, both the UK and Germany are predicted to contract but the UK is expected to contract by the greatest amount of all 7 countries. For reference, the G7 is made up of the US, UK, Canada, France, Germany, Italy and Japan.

Next year the UK economy is expected to drop by 0.4% followed by an increase of just 0.2% in 2024.

Last week the OBR (Office for Budget Responsibility) also predicted an economic contraction for the UK next year. The OBR’s prediction is for a steeper drop of 1.4% so the Pounds strengthening late last week and yesterday morning may be short lived should the UK economy show signs of shrinking at a greater level than the current predictions.

If you wish to discuss an upcoming transfer involving the Pound and would like to discuss timings and exchange rates do feel free to get in touch with me (Joe). You can email me directly on [email protected] with any questions you may have regarding our currency exchange service also. We can also set up rate alerts and automatic orders if you’re targeting particular trade levels along with other useful tools.

Sterling Hits Fresh Highs! Will the pound continue to rise this week?

By
Jonathan Watson
-
GBPEUR Forecast – Internal Market Bill Drives GBP Lower

The pound has reached fresh highs against both the Euro and the US dollar in the last week, as weeks of general malaise and negativity for the pound seem to evaporate. The key question for many will be, is this going to continue?

GBPEUR levels have risen to three-week highs of 1.1582 in the last 24 hours, where we had seen a low of 1.1326 two weeks ago. The move on GBPUSD is more impressive, with the near 1.20 hit recently, the highest since August, a three-month high.

The pound was weaker as many of us will know because of many issues, most fundamentally the policies of the Liz Truss and Kwasi Kwarteng administration in the UK which led to markets rejecting the pound in protest.

Sterling had clawed its way back as the Bank of England made clear they would be there to manage inflation through higher interest rates, although the prospect of interest rates rising too sharply was also sterling negative, in creating uncertainty and fear over the damage interest rates being too high would cause to economic growth.

Looking to the last couple of weeks, Rishi Sunak and Jeremy Hunt’s plans seem to be much better received although there is still plenty of caution. Rather than everything suddenly being rosy, it is more that their more measured and careful approach to public finances has calmed markets, where the previous Prime Minister and Chancellor combination scarred them.

Looking to the reasons behind the rise for the pound, we can return to some of the earlier points in my post, namely the big rise for GBPUSD. The US dollar accounts for over 60% of globally traded foreign exchange, and where we see large movements and changes in sentiment on the US dollar itself, it can influence movements on other USD pairings, including GBPUSD, which can then influence that paired currency against other currencies, ie GBPEUR.

The pound has therefore risen against the Euro and other currencies in part because of a broad weakening of the US dollar, which has dragged the pound up against other currencies, leading to its rise against other currencies like the Euro.

In answer to the question will the pound keep rising, it may well do. But it can be argued the UK fundamentals are the same they were a week or so ago, when the pound was weaker. The UK is still likely headed for a deep recession, the Bank of England has predicted that this could last for much of 2023.

Yes, the pound has risen, and yes, this might well continue. But it should be noted that the move higher is not because all of a sudden markets are much more positive over the UK’s economic outlook, it is also to do with more global factors. The risk of a move lower is therefore very present, and a majority of the FX forecasts we had surveyed did predict this over the coming months.

Understanding fully the reasons behind movements in the FX markets can lead to better information and in principle better more informed decisions. We can provide guidance as to what is happening, and in combination with a range of tools and options, help ensure you can approach the FX markets and any payments you need to make, with more confidence.

To discuss any strategy relating to a currency exchange and what lies ahead next for the UK and the pound, please contact me directly on [email protected]

I have worked as an FX dealer for 13 years, and helped thousands of private individuals and businesses plan and mitigate their foreign exchange risk.

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