Sterling exchange rates crash due to Bank of England

For months, clients that have been waiting to purchase a foreign currency were targeting yesterday Bank of England interest rate decision and they were disappointing by the Bank of England’s verdict. As forecasters had predicted the Bank of England hiked interest rates by 0.25% to 0.5%, however the commentary that followed was the reason why the pound dropped like a stone.

There are 9 voting members that make up the monetary policy committee and 2 of those members believed that interest rates should have been kept at 0.25% because of the low wage growth numbers we have seen over the last 12 months. Couple this with GDP numbers being downgraded for next year and the likelihood that the Bank of England will not hike interest rates until late next year, this was a seen as a ‘dovish hike’.

Moving forward the Brexit negotiations will continue to steal the headlines and consequently drive sterling exchange rates. Over the last couple of weeks Theresa May had hinted that progression has been made and believe the UK and EU are close to securing a deal in regards to EU citizens rights. If this is the case I expect this to give the pound a substantial boost as the 2nd round of trade negotiations will begin.

The other key event this month is when the Chancellor publishes the budget on Wednesday 22nd November. Exchange rates will be dictated by new policy. In the upcoming weeks rumours will emerge about the new policies the Chancellor will announce keeping an eye on all of the developments in the upcoming weeks should help to time your trade.

When buying or selling the Pound its important to analyse both currencies that you will be trading (GBPUSD, GBPEUR, GBPAUD). If you would like to save as much money as possible feel free to email me with the currency pair you are looking to trade and the time-scales you are working too and I will email you with my forecast and the process of using our company [email protected].

As a company we pride ourselves in the ability to get you a better exchange rate than your current currency provider or your bank. In addition we can outline your options and the potential future events, which will impact your exchange rate. This will help you to make informed and educated decisions.

** If you are purchasing the pound with a foreign currency, rates are fantastic at present however could get better. Outline your requirements to me and I will keep you up to date with market movement and potential opportunities. **