Have GBP exchange rates peaked?
The Pound has been in the financial headlines mostly for positive reasons through 2023, and up until now it remains the best performing currency within the G10.
Increasing interest rates to try and counter stubbornly high inflation levels have pushed the Pound higher, with GBP/EUR currently trading just over 1.1700 which is just over a cent from its annual highs.
GBP/USD is currently trading just below 1.2800, although last month it managed to break above 1.3100. At its current level it’s over 8% up against the US Dollar so it’s been a strong year for the Pound so far.
Over recent weeks there have been several analysts predicting that the Pound could drop in the upcoming weeks and months.
Due to downward pressure on the housing market and mortgage pressures as fixed mortgages comes to an end, the average UK consumer is expected to feel the pinch especially as inflation levels remain high. UK inflation levels remain above its peers such as the Eurozone and the US for example.
Due to the aforementioned reasons, HSBC are predicting consumer resilience to fade, and they are no longer bullish on the Pound.
Normura, the Japanese investment bank have similar opinions and believe that the Pound has further to fall against the US Dollar after its 3-4 cent drop already from the highs in July.
Moving forward I think the expectations of whether the base rate of interest reaches 6% by the end of the year could impact Sterling exchange rates, as 6% is the current prediction.
In terms of upcoming economic data releases, tomorrow mornings PMI figures carry to potential to move the markets especially as Services data will be released. This is the most important area of the UK economy so updates on this sector can impact the GBP’s value. Do feel free to get in touch if you wish to plan a transfer around this release.
The post Have GBP exchange rates peaked? appeared first on Pound Sterling Forecast.
Source: https://www.poundsterlingforecast.com/2023/08/have-gbp-exchange-rates-peaked/
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