The new week finds sterling holding on to most of the gains it has made on the euro over the past three weeks, leaving it still close to its three-month high.
Against the US dollar too, the pound is around 2.5% up on this time last month. However, GBP/USD did lose 1.5% over the past week and that could be the pattern for GBP/EUR too.
The dollar strengthened on Friday afternoon when the Non-Farm Payrolls data was released, showing a stronger jobs market in the USA than had been expected; 199,000 new jobs instead of the 180,000 predicted.
The coming week is packed with the highest levels of data – the most likely to move the markets – as well as an interest rate decision. That includes unemployment data tomorrow, Gross Domestic Product (GDP) on Wednesday and PMI on Friday. Between that is the Bank of England (BoE) making an interest rate decision, which will certainly be based on some of that data.
At the moment the markets are pricing in the BoE keeping interest rates higher for longer, but if all that data points to a severely slowing economy that could change very quickly.
Therefore, if you are committed to a major transaction, you will be taking a severe financial risk if you do not fix your rate at a level where you know you can fulfil your plans. We have seen it all too often, with clients who did not lock in their exchange rate suddenly needing to find thousands of pounds extra at the last minute.
Why not call your trader today on 020 8108 5163 and get that peace of mind before the big announcements this week?
