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Has this sterling rally run out of steam?
The pound has enjoyed some recent improvements notably against the Euro and dollar. Up almost 5 cents against both currencies from the lows of January and 2017 financial markets are eagerly awaiting fresh developments to determine the next direction on both pairs. Personally whilst there are various events which independently could influence the GBPEUR and GBPUSD rate emanating from overseas I think it is only a matter of time before fresh news sees the pound come unstuck and these recent gains eroded. For any clients looking to make a currency transfer involving the pound (or any other currency) there are some important events just around the corner which will effect the value of your currency transfer.
I expect sterling to perform better against the Euro only because I feel the Euro will weaken. I predict a range of 1.14-1.20 in the coming weeks. As early as tomorrow morning at 09.30 am there is data which could trigger sterling weakness. The latest Retail Sales figures will I feel trigger some losses for sterling as we are now beginning to see the impact of a falling pound and rising Inflation impact consumer’s back pockets. I also feel uncertainty around the time Theresa May triggers Article 50 will lead to uncertainty for the pound as the markets realises there is no going back for the UK and the vote.
Working in favour of clients buying Euros is uncertainty over the Greek debt issues and political uncertainty stemming from European elections. I would suggest a top end of 1.20 on GBPEUR is likely, clients selling Euros to buy the pound might wish to strongly consider taking advantage of any improvements in their rate. If you are buying or selling Euros with pounds and would like some assistance to get a better rate please contact me Jonathan by emailing [email protected].
If you have US dollars to buy or sell then making sense of the latest Trump tweets could prove useful. Donald Trump has stated the US dollar is ‘killing’ the American economy and whilst he is also in favour of a higher interest rate which would strengthen the greenback, Trump’s unpredictable ways could weaken the dollar. Overall I expect the pound to continue to struggle against the US dollar so the market should favour US dollar sellers. Rate of 1.20 should be seen again I feel in the coming weeks as uncertainty over Brexit becomes apparent once again.
GBPAUD is an interesting one, the pound is really struggling against the Aussie as the Australian economy goes from strength to strength alongside the Chinese dragon. The Australian economy has enjoyed a recession free period of almost 30 years which coupled with a high interest rate puts it firmly at odds with the UK and the pound. Rates below 1.60 could once again become a reality, unfortunately for clients moving to Australia or sending money there your currency purchase should remain expensive and could become more so.
We are currently in a reasonably quiet period as investors await further news on the Brexit. With Article 50 likely to be triggered anytime in the next few weeks now is the right time to be making some plans for your currency transfer. If you would like some added information and forecasts on the market I would be delighted to hear from you and offer some insight and information to help you make an informed choice regarding your currency exchange.
Please email me Jonathan Watson at [email protected] to learn more.
Thank you for reading and I hope to hear from you soon.
Source: http://www.poundsterlingforecast.com/2017/02/16/has-this-sterling-rally-run-out-of-steam/
