The Pound is holding strong

13 August, 2018

Pratheep Prabaharan

Last week was very quiet on the eco stats and Brexit uncertainty has weakened the pound significantly. The Pound has managed to gain some strength on Friday but still struggling overall. The GBPEUR rate dropped last week to its lowest seen for around a year. Many Analysts are predicting a highly likely no deal trade agreement at the EU summit on 18th October causing increased fears that we will reach a no deal Brexit negotiation. Regardless of this, the market corrected itself, the Pound gained around half a cent and holding its ground.

For those of you buying a property overseas, this may be the time to secure your Sterling cost whilst the rate is holding but may not be for long. Brexit deadlines are around the corner and we haven’t seen any positive updates on negotiations. As we are getting closer and with lack of updates on Brexit, it’s highly likely that the pound could drop further increasing the cost of your property. After BoE announced the increase in interest rate, the GBPEUR rate increased by around half a cent and instantly dropped to where we initially started. There’s nothing scheduled to push up the rate any further hence why it’s best to secure the cost early to avoid the risk.

On Tuesday we have the unemployment data and also the Average earning including and excluding bonus. The key data to look out for is GDP data for the UK on Wednesday even though it’s not as significant as BoE announcement on the interest rate. As we didn’t see much of a movement in the rate with an increased interest rate, it’s very unlikely that we can see any real movement with GDP data even if the data is positive. On Thursday we have Retail sales data at 8.30am.

Make sure to get in touch with your CI account manager to discuss your options and to be kept up to date in terms of market news and how that could potentially affect your budget and spending power on a regular basis.