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By Pound Sterling Forecast (Reporter)
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Why the pound is likely to fall

Thursday, March 23, 2017 11:33
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(Before It's News)

Sterling has risen against expectations ahead of the big news next week but I don’t believe the pound will perform too well. If you are looking to make a currency exchange in the future involving the pound now is the time to be making some plans, as the next week and beyond could prove very interesting. Overall expectations for the pound have improved but there are still many reasons to suspect the pound will enter a darker phase once again.

Despite the awful tragic terror incident in Lond on yesterday the pound has shrugged off the negativity and has had a really good day. It has risen against the Euro to 1.16 and 1.25 against the US dollar, GBPAUD has risen to 1.64 and GBPNZD has touched 1.78. This is in part due to stronger Retail Sales and a general defiant buoyant mood on markets ahead of next week’s big news.

I personally would be treading with caution as I don’t believe the calm will last long, I believe this is part of a short-term spike for clients to take advantage of. Whilst this rally could easily extend into next week in the absence of any fresh bad news, I would personally be surprised to see the pound strengthen too much since there are so many political uncertainties just around the corner.

The economic data is good but the political concerns are not going to just evaporate. We might actually start to see this increasing as we are presented with a whole new set of questions over the UK’s relationship with the EU. Here is a question, if Brexit is such a good thing and markets aren’t worried about it. Then why is the pound down so much in the first place? The answer is, of course, the uncertainty. It follows therefore that the triggering of Article 50 is just the beginning of a very long journey and as uncertainty persists and I believe increases, so too will the value of sterling fall.

Whatever you believe will happen when Article 50 is triggered, making some plans in advance is vital. A popular option for clients buying and selling the pound is a Limit order and Stop / Loss order. A Limit order allows you to buy currency at a higher rate if the market improves. A Stop / Loss allows you to ‘stop’ any losses as the order fills if the market moves against you.

If you wish to discuss strategies for your currency transfer ahead of this key date for the pound next week I would be very interested to hear from you and have a chat. Please contact me Jonathan Watson by emailing [email protected]


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