Good morning,

Yesterday saw the Bank of England’s Monetary Policy Committee vote 7-2 in favour of holding interest rates at 0.75%, giving Sterling a boost to weekly highs across the board.  At the time of writing, GBP/EUR is holding above the 1.19 level. Mark Carney’s final speech as Governor of the BoE was not one to fill the market with confidence, however he is quoted as saying “It is less of a case of so far, so good, than so far, good enough”.

Growth has slowed in the UK, meaning that the central bank is still missing the mark of their 2% inflation target. Although they see inflation staying below the 2% level this year, they still expect the economy to pick up which lead to the interest rate remaining fixed.

The MPC meeting minutes cite that it is uncertainty around Brexit that could be dampening investment in UK companies. However, today is the day, after much delay, that the UK officially leaves the European Union. As of 23:00 GMT this evening, the UK will enter the transition period until the end of December this year. This will push the spotlight firmly on Brexit negotiations, with markets looking for guidance on how we will leave the trading bloc in 11 months’ time and what the future will hold for the UK.

This morning at 10:00 GMT, we see key data releases for the Eurozone, GDP and inflation. Year-on-year the data is expected to reflect a slight improvement, which could potentially give the EUR some strength with signs of the economy picking up. This has the potential to tip GBP/EUR from the weekly high and back towards the ranges which we have seen this week.

As always, your account manager is here to assist with navigating this tricky period. Please get in touch to see how you can capitalise on the current rates.

Have a good weekend.

Author: Jack Nicholls, Relationship Manager

 

Whilst every effort is made to ensure the information published here is accurate, you should confirm the latest exchange rates with WorldFirst prior to making a decision. The information published is general in nature only and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available online.