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Where Next for Sterling Exchange Rates? (Matthew Vassallo)
GBP/EUR rates dropped during yesterday’s tradng, following poor UK Retail Sales figures. The expected figure of 5.4% was not hit, causing Sterling to lose value against most of the major currencies, in particular the EUR. This drop came after Sterling breached the 1.40 barrier earlier this week, once again providing EUR buyers with some of the best levels of the past 7 years.
Sterling’s positive move over the past couple of weeks was not expected when you consider the the uncertainty that was likely to be created by the UK general election. However the on-going economic difficulties inside the Eurozone, particularly in Greece, have not allowed the EUR to gain any sustained market value and this is why we are seeing the Pound trade at such attractive levels.
Personally I feel there is scope for the EUR to improve, especially when you consider its recent history and any UK media attention on Europe in the build-up to the election is likely to cause market uncertainty, which will not be positive for the Pound.
Looking ahead and with the latest Eurogroup meeting continuing today, expect issues in Greece to dominate discussions. Whilst scaremongering is rife at times like these, there is a very real threat that unless Greek finance minister Varoufakis presents a tangible list of reforms soon, then Greece will receive no further bailout funds from the IMF and it is likely they will default on their debts. If this does happen then their future participation inside the EU is likely to come under serious pressure.
GBP/USD rates crept back above 1.50 during Thursday’s trading despite the poor UK data mentioned previously. This move is certainly a positive one for the Pound, which for a time felt like it would be marooned under this glass ceiling for an extended period. The catalyst for yesterday’s spike could have been the weak US employment & Manufacturing data which came out under expectation and helped drive the Pound’s value back up. In truth it was fairly flat market for the pair yesterday but I expect this to change as we head towards the general election.
If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on [email protected]
Source: http://www.poundsterlingforecast.com/2015/04/24/where-next-for-sterling-exchange-rates-matthew-vassallo-6/
