Super Thursday for Bank of England

Yesterday’s trading was fairly positive for the Pound as the currency held its own even with some poor Manufacturing data in the afternoon which came in short of expectations of 5.2 but just managed to hold at 5.0. In the afternoon the US released their interest rate decision which as anticipated remained unchanged at 2% so no surprises for the markets there. Trading levels yesterday didn’t move all that much as investors were likely holding out for today’s events, and sterling held firm for the most part against the euro and dollar, providing slightly better rates than in recent days, as more and more reports suggested that an interest rate rise by the Bank of England today would be probable.

Markets have widely been expecting the bank to raise interest rates from 0.25% to 0.75%, and although this is typically regarded as positive news for a currency, in this case, the result looks to have already been priced into the current rates, so should we see a rate increase this afternoon at 12:00 it is unlikely that the markets will react too much. Investors will be looking to see what comments and forecasts come from the Bank and Governor Mark Carney in the inflation report, statement and press conference which follows.

Investors will be looking to see when the next rate rise is expected, however, currently the exchange rates are still largely driven by Brexit and the Pound is still fighting the Brexit battle. With much uncertainty ahead, big topics on a customs union and Irish borders still up in the air, and agreements made promised by October, its likely that the rates will continue to remain at these current levels with fears that we could still see things get much worse before they get better.

If you are concerned or indeed have a requirement to exchange currency in the coming months, whether to buy that dream holiday in the sun or simply top you your accounts, then do get in touch with us here at CI. Our team would happy to discuss how we can help you and talk through the various options we can provide to help you minimise your risk to the fluctuations of the market and help you lock in that all-important rate and make transferring your funds a little less stressful.