By Luke Dyson
As we enter the new month ahead we have seen a significant amount of increased volatility, mainly with GBP being heavily sold.
We have seen GBP/EUR lose just over a cent and GBP/USD lose just over half a cent since market open Sunday night. This is due to increased uncertainty ahead of the Bank of England interest rate decision scheduled for Thursday 4th Nov at 1pm as bankers begin to adjust their positions accordingly in anticipation of the result.
Analysts are predicting a small rate hike of 15 basis points in order to target the current rising inflation , bringing the current interest rate up to 0.25%. However as sterling has been significantly sold by the banks ahead of the decision this indicates there may be delays before the BOE decide to adjust interest rates just yet.
On a different note following on from Brexit, tensions have begin to rise with the UK and France over fishing waters as the French government have now placed sanctions against UK trawlers from yesterday if they are to breach their fishing territory. At present this won’t have a large impact on the current exchange rates however will generate some background noise for the time being. The major currency concern would be if a complete falling out between the UK and EU was to happen following the UK seeking new legal advice to get the Brexit deal re written by using article 16’s safeguard mechanism. This could have quite a large impact on the currency market depending on the outcome in the coming weeks.
If you are currently in the process or have a pending currency requirement in the near future please get in touch with your currency consultant today, although the market has taken a bit of a tumble since the 20 month highs were broken last week. The market is still performing strongly and is currently an excellent buying opportunity, however depending on the outcome Thursday this could have a big impact on how much your property could cost if you haven’t secured a rate ahead of time. For example on a £150,000 transfer if the market dropped one cent that would give you €1500 less towards your property budget; even a small change in the rates can make a massive monetary difference especially on a property completion amount.
Key Data releases to watch out for this week
3rd NOV 18:00 USD – FOMC interest rate decision
4th NOV 11:00 EUR – EUR -Zone PPI
4th NOV 13:00 GBP – BOE Rate decision
5th NOV 10:00 EUR – Zone Retail Sales
5th NOV 13:30 USD – Non farm payroll