As the Pound continues to tumble and investors come to grips with Brexit – which hasn’t even happened yet, we ask what next for Pound Sterling this week?
Pound Sterling sensitive to economic releases
It’s worth noting that Pound Sterling will be more sensitive to economic releases going forward, as much of the blame seems to be pointed at Brexit, any signs of economic slowdown will be linked to the vote which gives investors more reason to be anxious about where they place their money. Whether this be in the form of consumer or business surveys, or growth forecasts from third party institutes, Sterling has very little room for improvement whilst the economy is being hammered with recession warnings.
Whereas before, data that would normally provide little volatility for the currency is now considered a huge indicator of economic health, and this week’s releases have the potential to weaken Sterling to range boundaries of 1.14-15.
If you need to buy Euros, today might be a good idea
Given the last round of PMI releases lead to the Bank of England cutting rates, I would not be surprised to see the manufacturing and industrial outputs on Tuesday to cause quite a stir, if the data is positive, it would likely be put down to pre-Brexit luck given that the data is for June. If its negative, the upcoming vote to leave the EU will be where the fingers point.
If I was buying Euros anytime soon, today could be your last opportunity to see rates as they are, I am expecting further weakness especially after the NIESR growth forecasts later on Tuesday. The release will look at the last 3 months up to the end of July, and will make predictions around growth based on analysis. The data is considered accurate, current forecasts of 0.6% were last predicted for June and I am expecting the NIESR to downgrade such predictions, based on the latest round of negative data.
If you have a large sum of Pounds to exchange, I would be considering doing it by the end of play today.