Will the pound rise or fall in value?

It was a terrible week for sterling exchange rates, and for people that are looking to purchase a foreign currency with the pound. There were three main reasons why the pound lost value throughout the week.

1. UK inflation numbers released Tuesday morning shocked the market as the numbers declined to 2.6% from 2.9%. Since the UK public voted out of the EU, inflation has steadily risen due to the sharp fall in the pounds value. However with inflation falling this has relieved some of the pressure that the Bank of England were receiving about raising interest rates.
2. Governor of the Bank of England Mark Carney, warned that consumer credit has been growing rapidly, due to high credit card lending coupled with a surge in car loans. The Governor sees the rise as a threat to the UK economy and also sees similarities to the run up to the 2008 crash.
3. EU negotiator Michel Barnier warned Brexit secretary David Davis that the deal the UK has put on the table in regards to EU citizens rights once the UK and EU part ways,  is not good enough and the UK need to re think the deal. The problem the UK has is that they cannot start to negotiate a trade deal until the EU citizens rights are confirmed.

Looking further ahead Brexit negotiations will continue to put pressure on the pound and this pressure will continue until the UK and EU start to sing off the same page. Personally I don’t expect the UK to give into the EU’s demands just yet therefore further sterling weakness could occur.

The latest revised GDP numbers are set to released at 9.30 Wednesday morning. The consensus is for a slight fall to 1.7% from 2%. If this materialises than I expect the pound will fall further across the board.

Even though it looks like the pound will continue to remain under pressure its important when buying or selling the pound that you analyse the other currency that you will converting. If you have an upcoming currency transfer to make this week, month or year I would recommend emailing me with the currency pair (GBP/USD, GBP/EUR, GBP/AUD etc) and your individual requirement (buying a property abroad, paying a company invoice) and I will personally respond to you with my forecast and the process of using our company [email protected].

For example if I were selling US dollars to buy pounds I would look to convert sooner rather than later as I expect Donald Trump to continue to put pressure on the US dollar as Special Counsel Mueller is now looking into Trump’s business transactions with the Russians.

Where as if I were selling Euros to buy pounds, I expect to see a further sell off of US dollars to buy Euros and comments made by President of the European Central Bank last week about assessing the Quantitative easing program in the Autumn lead my to believe GBPEUR exchange rates are set to fall below 1.10.

For people that are buying a foreign currency the pound has last approximately 15% in the last 12 months, therefore when you make the conversion it is essential that you get the best rates. If you have used a brokerage for many years or have been referred a brokerage I strongly recommend you compare rates to make sure you get the best price possible and therefore save money. This simple exercise takes two minutes and in the past I have saved clients hundreds and in some instances thousands of pounds.

My direct email is [email protected] Dayle Littlejohn. Alternatively call me Monday morning on 0044 1494 787 478 and ask the reception team to be put through to Dayle Littlejohn.