Last week, Sterling fell by around 1% across the board and was the worst-performing currency of the week following negative rhetoric surrounding the UK-EU trade deal expected to be done this year.

The Pound has failed to go back to the 1.19 level a few times and now, technically speaking, is eying the 1.16 level on the next move lower.

Generally, this year, it is likely that GBPEUR exchange rates could continue to weaken- I think it is unlikely that the UK & EU will not need to extend the deadline for trade talks, which would have a negative impact on the Pound, so we could see GBPEUR exchange rates back down to the 1.14 area before we see another leg higher.

The main data release for clients trading GBP this week will be UK GDP on Tuesday morning. The consensus is a 0.2% increase in December which would be a weak end to 2019- if this transpires then the outlook would be relatively weak for Sterling moving forward as the economy would be growing at less than 1%, while inflation is still lower than the 2% target.

The short term view is that this could spur the BoE to look at an interest rate cut after the Budget this year, alongside more stimulus to help boost the economy, so if you are looking at your year’s exposure, this is worth keeping in mind.

As ever, if you would like to explore which options are available to you in regards to hedging off your exposure, especially while Sterling is still relatively high, please don’t hesitate to contact me.