Pound Holds Strong

By Ashley Finill

This week the pound has held its own against the Euro as we are still trading at two and a half year highs against the single currency. Yesterday morning the UK & EU posted PMI figures, the UK came in under expectation, whilst the EU recorded a higher figure than expected. The Euro benefited from the early morning data release, but gains were short lived as the pound bounced back throughout the day’s trading. These current high levels for Sterling are not to be taken for granted as seen this morning as cracks are starting to show in the Pound’s recent strength. This could be due to the upcoming economic decisions in the UK, next week the Budget will be announced in the house of commons on Wednesday the 30th as the Labour government gives its first proposed changes to the UK’s fiscal framework. It is reported that Chancellor Rachel Reeves is to announce significant shifts to public spending, taxation, and government debt. On Wednesday when the budget is announced we could see volatility in the currency market so it may be prudent to contact your currency consultant ahead of the announcement so that you are not caught out should the Pound take a dive. The following week with the Bank of England’s interest rate decision is announced on the 7th of November, there has been strong talks of an interest rate cut in the UK as inflation came in better than expected and under the 2% target at 1.7% which would suggest the BoE would look to cut rates again. This could be a testing and pivotal couple of weeks for the Pound, the last time the Bank of England cut interest rates in July, Sterling spiralled to a two and half cent drop within four days. A cut would almost certainly buckle the wheels and see Sterling under pressure, so if you have an upcoming requirement, it may be worth speaking with us ahead of these events.

Dollar Continues to Surge Ahead of the Election

The presidential race to the White House is now under two weeks away as candidates Kamala Harris and Donald Trump are both heavily campaigning as November 5th draws closer. Harris this week has been rolling out the red carpet for A-list celebs with help from the former president Barack Obama, whilst Donald Trump has been serving McDonalds in a drive thru whilst he also continues to receive endorsement from Elon Musk, who has been picking lucky voters for Trump to win a few million Dollars. In recent polls it is seemingly very close with Harris only just edging it but is really too close to call. Regarding the currency side of things ahead of the election, Sterling has pretty much fallen off the edge of a cliff against the dollar recently, losing over five cents in just the space of a month. This is largely down the conflict in the middle east with the USD seen as a safe haven currency so amid crisis investors heavily back the Dollar. With the election just under 10 days away volatility is likely to continue in the GBP/USD market.

Remaining Data This Week

As we see out the end of the week there are still a few data releases to take note of. Starting in Germany at 9am,  IFO data is to be released. In the afternoon Canada post retails sales figures at 1.30pmat the same time in the US,  durable goods orders will be announced and finishing of the week staying stateside, Michigan Consumer sentiment index is posted.

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