Best Euro rates for 8 weeks

The Pound continued its unlikely comeback yesterday, reaching its best level against the Euro since early September and against the US Dollar for a month. The pleasing rates for those of you sending money abroad, came despite a brief dip in the morning caused by mixed unemployment numbers and Tuesday’s lower inflation figures. The headline unemployment figure dropped to 4.8%, with 1.6m jobless in the UK (an 11-year low), but more claimants than expected at the same time.

The Brexit chaos is the unlikely friend of the Pound at the moment, with one article yesterday claiming that legal wranglings could mean the UK does not leave the EU until 2020, if comprehensive legislation is needed to repeal the 1972 act joining the UK to the then Common Market. While uncertainty is not usually good for a currency’s performance, any indicators that Article 50 would be delayed mean the UK staying in the single market for longer than expected, and that is seen as a boost to stable trade and economic growth.

Having said that, the assumption that the Pound will continue up further could be an expensive mistake. Many Currency Index clients have been locking in their exchange rates this week and taking advantage of unexpected improvements; an overturning of the High Court’s ruling on Article 50, or more damaging economic data pointing to interest rate cuts, could easily send the Pound back down towards its recent sub-1.10 lows.

Busy day ahead
Returning to economic data, today we have UK retail sales at 9.30, Eurozone inflation at 10.00, US inflation at 13.30, and an ECB policy report at 12.30. So with important data out for all 3 major currencies, we could see some volatility through the day.

The Chancellor also gives his first Autumn Statement next week, an event which will be more keenly watched than usual, due to the changes in 10 and 11 Downing Street and the lack of clarity over the government’s plans for the next 12 months. 2016 has been one of the most unpredictable years in living economic and political history – but could 2017 even ‘Trump’ the events of this year?

As well as sorting the facts from the fiction, Currency Index can help you secure the best rates for your international money transfers, so contact us for a friendly discussion on 0800 043 2623.