By Luke Dyson
For the week to date sterling has been relatively volatile across the board, however still within its current range bound market and unable to break into a trend either way for both GBP/EUR and GBP/USD.
As of today the Pound is still in the top position for the best performing currency since the beginning of 2023 across the G10 currencies, and although the market is relatively low for sterling to euro compared to previous years we are seeing some solid resilience given the current UK’s financial status.
It’s likely GBP will still be holding the crown into King Charles III’s coronation next week and perhaps for the weeks to come.
It is believed the Pound could remain supported in the weeks to come by encouraging financial data, interest rate hikes from the Bank of England and the market currently in a position which isn’t overstretched or priced, according to HSBC.
For Sterling-euro as a pair we haven’t seen much traction as of recent times, mainly on the basis the European Central Bank is likely to raise interest rates on the 4th May by 25- 50 basis points and also hinted that further hikes will be expected. This is why sterling has dropped back from last year’s highs, as more is expected from the ECB than BOE in terms of hikes moving forward.
However this is very unlikely to create a significant market breakout as the BoE is expected to hike rates another two times in 2023 before at least midway into 2024 before considering a rate cut.
Regarding data out today with significant impact, we have European GDP at 10:00am and German individual GDP data at 09:00am. Depending on the outcome we could see some market movement for GBP/EUR off the back of this.
Although the sterling euro rates are not where they have been previously they are still a good buying opportunity given the UK’s current inflation situation which is still in double figures.
Get in touch with A Place in the Sun Currency today to see what we can do to maximise your savings and limit your risk on your up-and-coming currency purchases.