The Pound is ending March on a good note, finishing higher against most currencies than where is began at the beginning of the month. The expectation is for the Pound to remain strong, and the progress that has been made during Brexit negotiations so far should help Sterling avoid any cliff edges. However, the lack of clarity on a final deal for Brexit or any firm confirmation of future interest rate rises from the Bank of England is holding the Pound back and could see some of the recent strength undone.
Against both the US Dollar and the Euro the Pound has lost ground from the absolute highs of last week, this is perhaps partly explained by the initial enthusiasm wearing off from last week’s news.
With much of the good news now priced into current Sterling exchange rates, it does seem a more likely outcome is a gentle softening in the recent strength of the Pound. The progress that has been made should help Sterling to keep its head above water but I would not be expecting any major surprises in the near future, we will need to see much better data being released to really trigger a sharp move higher.
The next piece of key news for the Pound is tomorrow, with the latest GDP (Gross Domestic Product) data released at 09:30 UK time. There are no significant changes to the figures expected, this would probably see the Pound remain within the recent ranges. This is the last estimate from Q4 of 2017 so will give us the final figures for economic growth in 2017 for the UK.
Growth in the UK has been nowhere near as low as was believed it might have been following the Brexit vote, which is helping support the Pound and is also a key factor for the Bank of England to be considering in their estimates for the future.
The Pound is enjoying buoyancy at present but this could quickly change in the coming weeks as wider concerns over the final EU trade deal the UK gets come to surface and capture headlines.