Following Wednesday’s improved UK unemployment figures, the Pound has continued on a march upwards as we head to the end of the week, with Bank of England Governor Mark Carney using his Mansion House speech last night to suggest that UK interest rates could go up later this year.
In contrast to the Eurozone, which has recently cut deposit rates below zero, Carney said interest rates could go up “sooner than markets expect”. Since higher interest rates would make the Pound a more attractive investment, and more so given the paltry rates in the Eurozone, the comments have pushed the value of the Pound higher, giving better exchange rates for sending money abroad.
Mark Carney had until yesterday been more cautious about interest rate rises, citing risks to the economic recovery, so there is a clear policy change here although he reiterated that there is “no pre-set course” on when rates would start to increase.
The Euro is now at its cheapest price since September 2012, and across other majors we have also seen improvements: the US Dollar is nearly at its best rate since 2009, and rates for buying Australian, Canadian and New Zealand Dollars are all up overnight.
There is no other major data due out today, apart from Eurozone trade balance at 10am UK time, so today could prove to be an excellent time to secure that exchange rate for your upcoming money transfer. Don’t forget you can secure a rate up to 2 years ahead to take advantage of the rates that Mr Carney’s comments have produced.