Sterling/Euro rates have fallen back away from last weeks 2 month high of around €1.14. The BoE governor gave a speech and he was typically gloomy about the effects of Brexit on the economy, stating that any interest rate hikes that may come would be small and gradual. This took the wind out of the sails of the Pound and it dropped back away against other currencies.
Retail Sales pushed Pound back up
This morning, the latest UK Retail Sales figures were released. The figures showed sales rose by 1% on the month, against an expected 0.2% rise. The Annual figures were also much better than expected showing that consumers are still spending, and this has pushed GBP/EUR rates back above €1.13 again. With much coming this week that could push the Pound lower, those that want to fix a rate now while things are close to a 2 month high can click here to get a free quote.
Important end to the week for Pound/Euro rates
Tomorrow (Thursday) we have the latest UK mortgage approvals and Public Sector net borrowing figures that could affect the Pound. Of more importance however will be a speech by one of the ECB members. If they hint at ending their stimulus programme, the Euro could strengthen pulling GBP/EUR rates lower.
The most important event of the week however is a key speech by Theresa May on Friday, where she is expected to give further information about Brexit negotiations. It may be the case that some of her points are leaked beforehand, and I think there is real potential for the Pound to be affected between now and Friday depending on what is revealed.
If the markets take her words as positive for UK/EU negotiations, then the Pound is likely to rise and push rates higher. If however the markets don’t like what she says or it’s looking like a harder Brexit will be pursued, then the Pound could be in for a rough ride.