The pound has kicked off the new working week on the front foot, gaining against most major currencies throughout the Asian trading hours. The stand out pair to mention is GBP/EUR, which has pushed back towards the 1.2040 handle, last seen on the 20th January. Friday lunchtime saw the run fall just short, but current trading suggests a potential push towards the near 2 year high again. GBP/USD has also opened stronger, pushing north by over 0.5%.
This week will be a big one for central banks, as both the Bank of England and the European Central Bank announce their interest rate decisions this coming Thursday. It is expected for the BoE to raise interest rates again, following the rise in December, to move rates further away from the record lows which have been seen over the previous 2 years during the pandemic. With their European counterparts set to release their own decision about 15 minutes after, GBP/EUR could be caught in a short-term tug of war. Should the ECB decide this is not the right time, then the pound could run higher towards pre-Brexit referendum levels in 2016. The current level has failed to break higher than 1.2080 and has been at this cross road 8 times since that day in June 2016.
It is also a busy week on the data calendar, with Eurozone GDP data released this morning, Eurozone inflation data Wednesday and Non-farm Payroll numbers from the States on Friday. It is imperative to speak with your Relationship Manager to navigate the week should you be exposed to any of these currencies.
It is also Chinese New Year this week, from WorldFirst we wish all of our colleagues and clients celebrating a happy and healthy New Year.
Have a great day.
Author: Jack Nicholls, Senior 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 here.