- Pound loses its rally against the Euro despite positive business survey
- UK GDP estimates for Q3 tomorrow could strengthen rates
- GFK consumer confidence could improve
- Markit PMI to improve following weaker Pound?
GBPEUR rates settle at 1.17 range
Pound to Euro exchange rates have settled bordering at 1.17 since lunchtime. The tragic news in Italy yesterday saw a sharp rise in Sterling’s value, but rates have diminished since lunch time today.
Whilst it has been a quiet week for Sterling, tomorrow’s GDP estimates for Q3 will be the next indicator of post-Brexit economic health.
Will the Pound get stronger?
investors will be watching with scrutiny as they try to make sense of post-Brexit economic health. Although we have not seen the massive post-Brexit shock as some predicted, the UK remains vulnerable to economic releases which will likely continue until further clarity is seen for the UK-EU relationship.
Given the strong retail sales and the cheaper Pound, tomorrow’s GDP estimates for Q3 will likely be in Sterling’s favour.
I see GBPEUR rates closing the trading week around the 1.169-1.173 range depending on tomorrow’s figures.
Next week’s data could provide further strength for Sterling
The GFK consumer confidence next week could be where we see further movements in rates, the mood amongst retailers has been largely positive and the British summer and Olympics has meant consumers have shrugged off the Brexit vote.
Markit PMI could also benefit the UK, with a cheaper Pound comes stronger exports. The UK exports a lot of its machinery to the EU and US, I am therefore expecting a strong result next week.
I would look out for mortgage approvals on Monday however, there is growing concern that Brexit could impact the housing market and Monday’s release could be early signs of what’s yet to come.
We could however see exchange rates closer to 1.18 by the end of next week.