After its rapid strengthening on Friday, sterling had a steady Monday, with little UK economic data to spark any dramatic currency movements at the start of the week. The house price index from Smart Currency partner Rightmove has shown that asking prices had risen by 1% for homes in England and Wales. This gave sterling a slight boost, allowing the currency to reach, momentarily, a one-week high against the euro.
Sterling dropped from this level, however, thanks to speculation over upcoming data. With the Bank of England (BoE)’s meeting votes due, investors’ belief in a change in the BoE’s threshold for reviewing when to start increasing interest rates (i.e. the belief that the BoE may drop their target unemployment rate) caused sterling to lose a little of its strength. The only data scheduled for release today is the Industrial Order Expectations from the Confederation of British Industry, which is not viewed as a highly significant economic measure.
Difficult time for businesses and how to budget and forecast exchange rates. Will we see sterling appreciate back to levels last seen in July 2012 against the euro or will it slip away slowly as the likelihood of interest rate rises in the near term recede. The key drivers to move sterling either way are finally balanced.
Call your trader now for the latest sterling rates and a detailed discussion on your requirements and how best to manage your risks.