EDITOR’S NOTE: A currency exchange specialist at forex brokers TorFX looks at the factors driving the pound’s exchange rate in the week gone by.
Pound Sterling was soft mid-week as traders decided to wait and see what Theresa May achieved on her trip to Brussels with her opening offer on the rights of EU citizens living in the UK.
Whilst waiting for May to go to Brussels traders reacted with indifference to new data from the Confederation of British Industry (CBI) showing that industry order books grew to a 29-year high in June, as markets know that economic surveys have been less reliable recently, rather like opinion polls. Official figures that come out later tend to tell a different story, often more downbeat.
On Friday the Pound rose in the morning against the Euro on news that May proposed a deal to guarantee the rights of EU citizens already living in the UK. However, it then fell back after the EU described the offer as “well below expectations.” This is just the beginning of a long and torturous negotiation process lasting years that markets will try to trade.
For its part the Euro had a directionless day after the ECB delivered both good and bad news in its latest Economic Bulletin. Overall, the bulletin concluded that loose monetary stimulus was still necessary for the Eurozone, giving markets little reason to change their outlook on the Euro.
This article is written by a foreign-currency broker working for TorFX, a forex broker established in 2004 to provide foreign exchange and international payments to both individuals and companies. TorFX is authorised by the Financial Conduct Authority under the Payment Service Regulations 2009 for the provision of payment services. Their FCA number is 517320. To verify their authorisation, you can visit the Financial Services Register and search the register using their FCA number. SPI is not responsible for the opinions of guest contributors.