Pound Sterling exchange rates have seen another positive day ahead of important UK Gross Domestic Product (GDP) numbers released tomorrow. The GBP/EUR rate has broken over 1.14 this afternoon whilst the GBP/USD exchange rate has also gained with levels sitting at 1.3450.
Tomorrow’s GDP numbers could create substantial volatility for the Pound during tomorrow’s trading session and a weak data release could see a drop in the exchange rates. GDP is expected to arrive at 0.3% but any softening could see the Pound tumble. Although unemployment in the UK is at the lowest level for 42 years there are concerns over UK economic growth. Any move closer to zero growth would likely make the headlines and would prove to be an easy excuse to sell the Pound. At a time when the Bank of England is seriously considering raising interest rates from these record lows then any wobbles on the economic data could see troubles for the British economy and hence the Pound.
Potential conflict with North Korea could affect currency markets
Developments in North Korea are also likely to have a sizeable impact on all the currency markets. China this afternoon has ordered all North Korean businesses based in China to be shut down as part of UN sanctions against North Korea’s nuclear and missile programs. It also includes partnerships between the two nations. If military action is seriously being considered by the US then this in my view would also be a precursor to such action. If you are looking to buy US Dollars with Pounds you may wish to consider securing the attractive levels that are currently available as any heightening of tensions could see a flight to the safety of the US Dollar.