Has Pound Sterling hit the top?

Last week we had an unexpected 0.5% rate hike from the Bank of England.

Usually news like that would give Pound Sterling a massive lift.

Instead, it provided only a short-lived bounce.

Since then, the Pound has been drifting sideways against the Euro and US Dollar.

Often it’s a sign of a top if a currency can’t sustain a rally. It literally fizzled out in an hour.

One thing’s for sure - currency markets are hyper-sensitive to inflation data right now.

Just look at what’s happening with GBP/AUD.

Today Australia announced inflation fell more than expected and the Aussie Dollar hit a 2-year low against the Pound.

We know the UK is battling higher inflation than peers, but should inflation relent, we would expect the Pound to give up its recent gains very quickly.

With that in mind, anyone looking to sell GBP and buy Dollars or Euros can still take advantage of current rates.

So what next, what should you do?

As always, we are on the look-out for the best opportunities.

To discuss your requirements, you can speak to us on 01872 487 500.

Click below to get the latest rates.

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Current rates:

Wednesday 28th June 2023 at 10:15

£1.00 GBP = 1.1602 EURO

£1.00 GBP = 1.2711 USD

£1.00 GBP = 1.9145 AUD

£1.00 GBP = 2.0854 NZD

£1.00 GBP = 1.6800 CAD

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Pound fluctuates as UK inflation bites

The message is "It’s still a good time for buyers of Euros or Dollars"

But for how long?

This morning the latest inflation data has been released.

UK inflation has come in at 8.7% - much higher than elsewhere.

By comparison, US inflation is down to 4.0% and the Eurozone down to 6.1%.

The Pound’s strength in recent months is because the Bank of England is going to have to remain very tight with monetary policy.

Tomorrow the Bank of England meets again and another interest rate hike is almost a done deal.

But there’s only so much the UK economy can take.

So the outlook for the Pound is less certain over the coming months.

Last week the Pound hit a 14-month high against the US Dollar and a 10-month high against the Euro.

It’s a run that may be hard to sustain.

Over time, the UK is likely to get in sync with its peers and the Pound’s advantage will end.