UK Parliament Pound Exchange Rates

Upbeat Carney and a Parliamentary Majority Sees Pound Exchange Rates Finish Week on a High

After much speculation that the Conservatives and the Democratic Unionist Party were seemingly at logger heads over a muted two-billion-pound infrastructure investment into Northern Ireland, it would seemingly appear a figure of half that has been approved by both parties and now the Tories find themselves in the position of being able to push through Brexit negotiations with the needed majority, whilst also potentially warding off another snap general election. Pound exchange rates have remained relatively consistent only really falling victim to Draghi comments mid-week.

Euro Optimism Spurred by ECB President Draghi

Tuesday saw the turn of Mario Draghi to fuel speculation of a eurozone raising interest rates. Although not completely dismissing the areas inflationary pressures he stated-

‘’At present, they (inflationary pressures) are mainly temporary factors that the central bank can look through’’

Markets naturally clung to the positive comments of the normally down beat ECB president and this in turn saw the Euro gain ground against the majority of the majors. With EUR/USD now at a year high.

EUR/USD Year High

The comments saw GBP/EUR plummet to 1.1265 before being spurred on Mark Carneys speech just a day later reversing the GBP/EUR gains.

 

Mark Carney Spoke in Portugal

Just a day later Mark Carney reversed any gains enjoyed by the Euro. In his latest Statement the Bank of England president confirmed that the Monetary Policy committee would be debating issues surrounding rate rises. He also insinuated that taper would likely be in the near future saying –

“Some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional.”

The comments and quiet confidence seeing Pound Exchange Rates accelerate dramatically.

 

The Pound Exchange Rates Reaction Over The Week

GBP/EUR has traded within a very tight range over the last month only briefly breaching the 1.15 mark in early June. Currently the GBP/EUR sit at around the early 1.14 mark. It will be interesting to hear Carney next statement to see if he pursues the prospect of rate rises and potential tapering especially with the challenges the UK economy faces, and the Frankenstein and fractious government that now leads the UK’s Brexit negotiations.

 

Meanwhile the GBP/USD continued the strong trend throughout the week.  And GBP/USD now finds itself relatively comfortably above the 1.30 mark. It will be interesting to see in tomorrow’s trading whether this particular pair will be sold off now they have hit this crucial level.

Pound Exchange Rates GBPUSD

 

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