Tuesday, 12 January 2016

Pound continues to fall, what could move exchange rates this week?

After a pretty bruising week for the Pound last week, Sterling has fallen further this morning, after the latest UK Industrial and Manufacturing production figures came in quite a bit lower than forecast. This has weakened Sterling and pulled GBP/EUR and GBP/USD rates lower, as you can see from the charts below:

    GBP/EUR
   GBP/USD


Later today, we have a speech by Bank of England governor Mark Carney. His comments will be closely monitored for any hints as to when UK monetary policy may change. One of the reasons the Pound has been falling recently is the fact that it could be at least another year until the BoE raise interest rates. Any signals of a change in stance could affect the Pound. Also at 3pm today, we have the latest Gross Domestic Product (GDP) estimate from the NIESR. This is very important as it will show whether the UK economy is still growing at 0.6%. Given the latest slowdown in global growth, there is a good chance UK GDP will also have slowed, and if today's figures confirm this, expect the Pound to continue to drop against other currencies.

What else could move exchange rates this week?


Tomorrow (Wednesday) we have a meeting my the European Central Bank, and also EU wide Industrial Production figures. These releases could affect Sterling/Euro rates.

Of more importance will be Thursdays Bank of England announcement. It's pretty much a given that they will leave interest rates on hold, however the minutes and press conference afterwards will be looked at very closely, for any hints as to when interest rates may start to rise in the UK. Also on Thursday, the European Central Bank have a meeting about the overall financial conditions in Europe, which could affect the value of the Euro.

Elsewhere, the USA releases jobless numbers and a monthly budget statement this week, in addition to Retail Sales and Industrial Production. I think that economic figures will continue to be very strong from the states, so don't be surprised to see GBP/USD get even lower than the current 5 year low of $1.45.

Discuss your currency requirement and get a quote


It's a volatile time for exchange rates at the moment, so if you need to buy or sell a foreign currency, don't just hope the rate will get better. You're probably reading this Blog to gain an understanding of what is moving the rate, and whether it will get better or worse in the coming months. Why not get in touch to discuss your options and get a quote? There are various contract types I offer that protect you against exchange rate drops, and the exchange rates I provide are very close indeed to the 'mid-market' level, and up to 5% better than you may be able to achieve elsewhere.

Click here to send an enquiry and get a free quote today

Currency Fact of today

On a US Silver dollar coin,  there is a picture of an eagle. This is actually a real eagle, and his name was Peter.  in the early 1800's Peter was used as a model for drawings in the mint, but he injured his wing in one of the presses and died. So, they stuffed him, and he's still on display today in the lobby of the US mint!