Since my post on Thursday the pound has continued to fall against the U.S. dollar leaving the cross hovering around $1.5650. The Bank of England's inflation report last week is still having an impact on Sterling's value and it could get worse tomorrow morning when the UK's latest inflation figures are released.
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At 9:30 GMT tomorrow the office of National Statistics will release the latest CPI (Consumer Price Index) year on year figures. Over the past few months inflation in the UK has been steadily declining, putting an end to any chance of an interest rate rise from the BoE in the immediate future. All eyes will be on tomorrow's inflation number and the UK will be looking to avoid a decline for the fourth straight month.
Inflation in the UK currently stands at 1.2%, 0.8% off of the BoE target figure of 2% and if we see a drop tomorrow the value of pound is going to be seriously affected. Last week BoE Governor Mark Carney hinted the central bank are anticipating that inflation will drop below 1% in the next six months so a drop could be partly priced into the market already. The danger for Sterling though is if we see inflation below 1% less than a week after Mr Carney's comments, the pound could easily go into free fall.
If you are thinking of buying or selling dollars in the coming weeks and are worried about economic events impacting the value of your transfer get in touch today for a free, no-obligation consultation. We can then put in place a strategy to protect you against adverse market movements and target a rate that might not be currently available.
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