By Grace Smyth
Earlier in the week we saw Sterling drop back against the other majors following UK inflation results, losing almost 2 cents against the euro and close to that against the Dollar. Although a drop in inflation is good for households in the UK, the fall in inflation may be enough to change the Bank of England’s current standpoint on further interest rate rises, with the next announcement due at the start of August. If they decide to leave interest rates as they are, we might see the Pound react to this negatively.
This morning we have seen some upbeat retail sales figures for the UK, which posted better than expected. Sales grew 0.7% month on month but showed overall a contraction of -1% for year on year. The results initially gave the Pound a little push in the right direction, but this was short lived as at the time of writing me have seen these small gains retract. Perhaps not down to technical data but rather political? The Prime Minister has hit headlines this morning with various news outlets suggesting he is on course to lose his spot at Number 10 at the next election. Could this be the reason rates have trailed off? It’s worth noting that these kinds of headlines can also be damaging for a currency!
For the reminder of the day there is little out in the way of data to move exchange rates, so we can expect a fairly flat end to this week’s trading.
With politics and data releases all taking a swing at the Pound of late it is certainly worth getting in touch with the team here at A Place in the Sun Currency to discuss how we can help you secure your upcoming currency requirements. These movements in exchange rates can be costly but can also save you a considerable amount if caught at the right time, so don’t be caught out and talk to us today and ask about the options we offer to maximise you returns.