Pound starts July on back foot

Sterling’s recent gains came to a holt last week, as the final revision of GDP for the first quarter showed that the economy only grew half as much as previously expected. The Pound had been stable and creeping up, but this trend seems to have reversed with falls of around 2c in the rates for buying Euros and US Dollars. Uncertainty over the government’s second wave of austerity plans might have also kept markets cautious – not great news for those of you sending money abroad.

Today also sees new Bank of England Governor, Mark Carney, take over from Sir Mervyn King after 10 years at the helm. Mr Carney becomes the first foreign Governor of the Bank in history. We wil have to wait and see whether there will be any major changes in policy, or whether the Bank’s Quantitiave Easing programme – which tends to hurt the Pound – is more likely to be extended later in the year. Thursday will be the first major Bank of England announcement under Mr Carney’s stewardship, when interest rates and QE for July are announced.

The Euro’s increase in value was also helped by German inflation figures which came out higher than expected on Friday, so this morning’s Eurozone inflation figures, released at 10am UK time, will be interesting – any reading higher than the expected 1.6% for June is likely to make the Euro more expensive again.

UK mortgage approvals are also released at 9.30 this morning, but there is no other major data due as we head into the second half of 2013.

Croatia also celebrates becoming the 28th member of the European Union today. Croatia will not yet join the single currency nor the visa-free Schengen zone, so for the foreseeable future the Croatian Kuna (HRK) will remain the country’s currency.

So if you are looking to discuss your sending money aboard give our dedicated team a call today.