After hitting an 8-year low against the Euro in early August the GBP/EUR rate is now trading back in the same trading range it’s found itself it for long periods of time since the Brexit vote.
Sterling has also recovered roughly 50% of its losses against the US Dollar since the Brexit, and it’s even recovered all of its post-Brexit vote losses against some major currency pairs such as the New Zealand Dollar.
UK GDP data weakens the Pound
Earlier this morning the UK GDP figure for the year came out worse than expected by 0.2%, and this resulted in a weakening of the currency. The Governor of the Bank of England, Mark Carney on the other hand has offered the markets some positivity after once again hinting at an interest rate hike in the UK as soon as November. This is generally considered to be a positive and I expect to see the Pound climb higher if this talk materialises into reality.
Will the Pound’s value continue to rise?
Those hoping that the Pound will continue to climb should be weary that the Pound could drop suddenly should negative news emerge surrounding the Brexit, as this has the potential to negatively impact sentiment surrounding the UK economy moving forward.
Next week Manufacturing, Construction and Services data will all be released out of the UK, as well as a proposed Inflation Report hearing. All have the potential to move markets should the figures either impress or disappoint so these are worth following closely.
UK property prices
It’s worth watching property prices as this morning it emerged that London property prices fell for the first time since 2009. They fell by 0.6% and London property prices are the worst performing in the UK. It will be interesting to see whether this continues and how it impacts the Pound’s value. With a interest rate hike potentially on the cards falling property prices could be worrying for home owners, and may give the Bank of England some food for thought.