The Pound has traded favourably on the news that Rishi Sunak looks to be nailed on to be the next Prime Minister. Boris Johnson ruled out his candidacy yesterday evening. This led to strong, positive moves for Pound rates in early trading. The belief is that Mr Sunak could potentially be made PM as early as today if no other candidates can muster the 100 votes they need to stand.
GBP/EUR has jumped back into the bottom of the longer term range and GBP/USD has returned to a more positive note than the trend it was in towards the latter half of last week.
The outlook for the Pound will surely be governed by both which MP gets to become the next PM and the Chancellors economic plans being revealed on Monday 31st October. In an interview yesterday the ex head of the Bank of England, Mervyn King, suggested that instead of taxes being cut they may need to be increased to cover Government spending. On the face of it this sounds quite dire. However it could lead to a flattening of interest rate rises and would be positive for the Pound.
Looking ahead there's not much in the way of scheduled news to affect things today. There's global manufacturing and services purchasing managers indices out, but this has had little effect on rates in recent months.
Today’s Economic Calendar
EUR: 09:00 S&P Global Composite PMI
UK: 09:30 S&P Global Composite PMI
US: 14:45 S&P Global Composite PMI
As ever we look forward to keeping you in the loop and look out for our next update.
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