Pound – Cash or Bust?

The week so far has seen a continuation of recent trends for the major pairings – GBP, EUR & USD. The pound has continued to push the Dollar up, with that remaining weak, whilst GBP>EUR rates have remained range bound for several months now, whilst being sat not far of the best they have been since before the election last year. Yesterday saw little data of major note for these pairings released. Whilst Public borrowing showed a decrease and was positive for the Pound, ZEW economic sentiment reports from Germany and the Eurozone also came in better than expected which cancelled any movements out. Consequently, GBPEUR rates remained flat, whilst GBP>USD continued to slowly creep up and are sat at the highest they have been since June 2016 and the referendum.

Today is much busier in the way of data, although again we have no ecostat releases of major note. German and European manufacturing reports, alongside UK house prices and unemployment data dominate the morning. Whilst in the afternoon as always focus shifts to the US who release house prices, Manufacturing and services data of their own.

With little data out, and Brexit talks starting up again next week those of you reading this might like to consider the current position with where the rates are sat- could this be a cash or bust situation? With sentiment having driven the market for many months, and with rates the best they have been in some time, any negatives in the short term for the Pound could see these levels erode quickly. With what we saw from the Brexit talks last year it is a strong possibility we will see more uncertainty and the Pound suffer. Add to this we are currently at peak levels for some time it is often the case we see a technical correction in rates where traders sell off currency to take profit, which in turn sends the rates down. And at present both are at risk. For the USD it has been a one- way movement for some time so a technical sell off is likely, and against the Euro if we see rates drop from where they are at it is feasible we could see as much as a 3% movement down, which on a purchase of 100k Euros would increase the cost by just under £2800.

So, if you don’t want to take what is a very real risk in an uncertain market, speak to your Currency Index broker today and cash in on the currently very good rates. If you are a risk taker we can also offer a range of ways including Stop/loss orders to help you protect against fluctuations and the potential costly increase to your purchase. So don’t be caught out and let us give you some friendly and professional advice on how to get the most out of your transfer.