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Sterling hits 9 month high against Euro

GBP – Break to the upside… finally

It’s been a long time coming but GBP/EUR finally broke out of its narrow trading range.

For the last 6 months GBP/EUR has been trapped between 1.11 to 1.14, but yesterday Sterling managed to bust through the ceiling.

It’s a result of a combination of things. Firstly, there’s been progress on Brexit with the EU and UK agreeing a transition deal on Monday. Secondly, the Bank of England (BoE) meeting yesterday saw two members vote to increase rates immediately.

However, after an initial burst Sterling gave up some of its gains as the BoE reiterated that rate hikes would be “gradual”.

For those that have been frustrated by the level of GBP/EUR, make sure you are registered and ready to take advantage of the improved exchange rate. We are watching rates continuously throughout the day and can target levels for you.
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Sterling riding high but for how long?
GBP – Will the Bank of England backtrack?
What a week so far and there’s more major news to come.

Brexit has taken another big leap forward. With a transition deal (loosely) agreed, it means negotiations can finally move on to the juicy bit - trade.

However, Sterling’s upward momentum took a knock yesterday after the latest UK inflation figures came in lower than expected. It seems the Bank of England might have called it right; inflation peaked at 3% a few months ago and is starting to subside.

Today we have jobs data out and then the Bank of England (BoE) meets tomorrow for a rate decision. A May rate hike still looks firmly on the cards, unless the BoE begin to backtrack.

EUR – Awaiting Euro Summit
As we expected, the latest ZEW economic sentiment surveys indicated that German confidence has begun to wane.

The Euro remained pretty stoic in response which suggests investors are instead focused on the upcoming Euro Summit. EU leaders set to meet for a chinwag in Brussels on Thursday and Friday.

USD - Rate rise expected
The new Chairman, Jerome Powell, will be in the spotlight later today as the Fed is expected to raise interest rates for the first time in 2018.

Investors will be listening closely for any indication of how many more hikes are likely this year.

While higher rates are positive for the Dollar, the growing threat of trade wars is weighing on USD.

Sterling to Euro rate currently sits at £1.00 = 1.1450 Euros, see below for more comparisons.
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