It’s been a prosperous afternoon for Sterling, which has made gains across the board.
GBP/EUR exchange rates touched a high of 1.1569, whilst GBP/USD rates reached 1.4246. This positive spike is a continuation of recent trends, with the Pound gaining value in line with an upturn in fortunes for the UK economy.
A strong run of positive economic data set the tone for Sterling improvement of late, along with the agreement made between the UK and the EU regarding the terms of a transitional period ahead of the UK’s final separation from the European Union. This seems to have alleviated some major concerns amongst investors who have piled funds back into Sterling following the announcement. It will give the UK Government an extended period of time to negotiate the terms of its Brexit, including what type of trading relationship we will have with our European neighbours following our final separation.
GBP/EUR rate has broken through 1.15
Looking at GBP/EUR exchange rates and the Pound has finally broken through the key resistance level of 1.15, which had provided so much protection for the single currency during the first quarter of 2018. Whether or not the Pound can sustain these levels, or indeed kick on again is debatable but there is no doubt that an air of confidence seems to have returned to the currency markets when the Pound is concerned.
Looking at Cable rates and the Pound now seems to have found firm foothold above 1.40, with the current trend for GBP/USD offering optimism that we might see the Pound make a run towards 1.45.
With the Bank of England (BoE) alluding to a prospective interest rate hike over the coming months, market conditions could change again, but for the time being I would be keen to take advantage of the current spike and remove any unnecessary risk from what is an increasingly unpredictable market.