The last week was fairly quiet for Sterling exchange rates, with both GBPEUR and GBPUSD moving within a 1% range for the whole week. The main focus was on Fed Chair Powell pretty much confirming an interest rate cut in the U.S at the end of this month, which will begin to weaken the U.S Dollar, I am unsure if we will see much of an effect against the Pound due to political circumstances in the UK.
Moving onto UK Politics, it seems that Boris Johnson has already won the vote with the votes already cast, even if Jeremy Hunt wins 100% of the rest of the ballot he still will not have enough to win the vote overall. So what does this mean? As Boris Johnson has a very bullish view on leaving Europe in October, I think Sterling may weaken further once it is confirmed that he is the next PM of the UK, due to the fact that he is happy to leave the EU without a deal.
The main economic figures to look out for this week are Average earnings numbers on Tuesday, which are expected to come in a little higher, and Inflation numbers on Wednesday which is expected to stay on par to last month.
The two main events this month are the US Fed cut and the announcement of the new PM, both of which may weaken exchange rates moving forward, if you have FX exposure that you feel could be affected by these events, please don’t hesitate to contact me.