GBP hits record highs since Brexit

15 January, 2018

Nakhil Mahra

Last week we saw a flat week of trading up until Friday when markets reacted sensitively to the day’s data. Following a raft of mixed data from the US, with an already weak USD dropping further against the single currency and GBP. GBPUSD hit its highest point since June 2016, this surge was supported by news that both Spain and The Netherlands want a good Brexit deal, hinting at a soft Brexit. Although that is only 2 out of the 27 countries and arguably two nations that have less power than some of their EU partners. Should the other countries not agree and still want a hard Brexit, this surge could only be a temporary relief.

Demonstrating the current strength of the Euro further, positive data last week from the UK in the form Manufacturing Production figures, the best in a long time, did nothing to change the rates and Euro consolidated its position through the week. In another note of Euro positivity, there were hints that the European bank may hasten its move away from the Quantitative-easing programme. With Mario Draghi having a more hawkish outlook with recent positive EU data. Should this be the case, we will only see Euro get stronger in the coming months. Will we see the GBPEUR on par before the end of the year?

This week’s data

The main highlights this week to keep an eye on:
Tuesday 9.30 GBP CPI
Wednesday 3pm BOC Monetary policy meeting
Thursday 1.30pm Building permits/unemployment claims
Friday 9.30 GBP retail sales

To be kept informed with all the data and how your overseas transaction are affected, speak to your account manager today.