Be wary of hoping for further gains for Sterling – BOE monetary policy forecast is bleak
The pound is struggling of late after striking a near six month high in October of 1.1450 against the Euro. Many who are unaware the market moves on rumour as well as fact thought the recent rate hike from the Bank of England (BOE) would give Sterling a much needed boost and in fact the opposite occurred. The hike was factored into GBP/EUR before it took place, Reuters put it at an 83% chance it would occur. It was when the governor of the BOE, Mark Carney spoke and stated the forecast was for only two further rate hikes in the next three years, below expectations that the pound fell in value. Personally I am of the opinion even this is optimistic, remember this was the first rate hike in over a decade and we have been in much better positions in terms of economic health and hikes did not materialise.
Recent Sterling gains down to Euro weakness rather than Sterling strength
The reason for The rise to 1.1450 was due to Euro weakness not Sterling strength. It was the combination of tapering to the Eurozone Quantitative Easing (QE) program and the situation in Catalonia. Unless something completely unpredicted comes to the forefront I believe the pound will anchored within the last six months buoyancy levels, 1.08-1.1450. There needs to be a stable government in place and some form of clarity over Brexit in order for the pound to make significant gains. The recent resignations of Fallon and Patel have done little to help the political situation and have been a catalyst to the decline in Sterling value.
If you have to move short to medium term I would be looking to move if the market strikes the high 1.13s – 1.14, although in all honesty I think further decline for sterling is more likely.
If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at firstname.lastname@example.org . (Daniel Johnson) Thank you for reading.