Busy week ahead for the Pound
21 May, 2018
When the Bank of England confirmed keeping interest rates on hold with a 7-2 split in favour of keeping rates the same, the Pound fell immediately after hitting the best level to buy Euros since May 2017.
Last week the Pound has made some improvement against the single currency following a press report that the UK was set to stay in the customs union with the EU.
Although the Pound stepped up against Euro, Brexit negotiations could affect the strength of the currency. Any gains for the Pound could be short lived so it may be worth taking advantage of this short-term spike in the Pound’s favour.
There are a few speeches today from members of the Federal Open Market Committee in US which could have an impact on GBPUSD rate. With no key events on Tuesday, it will look light on data followed by a very busy Wednesday. Germany will be releasing their GDP results and there is a lot of data to be released for the UK with UK inflation. Inflation is an important factor in what the Bank of England will do moving forward and this could have a major influence on GBPEUR rates straight after the release. On Thursday UK Retail Sales are due to be published. The weather has been more stable therefore it’s possible to see promising data compared to last month as consumers would spend more.
This week could be a strong week for GBPEUR but it’s not guaranteed. Good economic data will enhance the chances of a rate hike and will strengthen the Pound whereas weaker data will more than likely lead to Sterling losing value. If you want to buy Euros and want to ensure that you get the most for your Sterling then speak to your Account Manager today. It’s a volatile market so if you want to avoid risks and unpredictability in the rates movement across all currency pair then discuss the best option for you with the Currency Index team.
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