WorldFirst 2020 Currency Outlook has been published with Currency Specialist Jack Cincotta providing highlights for the year ahead in currency markets. Naturally our first concern in the UK is for the 2020 currency outlook for The Pound and how this could impact online merchants.
Extensions, negotiations and elections have dragged out the uncertainty of Brexit for longer than anticipated. Extensions are no-more, the 31st of January has been and gone and the UK has left the European Union. The Pound has strengthened significantly on the back of this event, but with 11 months of trade negotiations ahead, the end is far from near.
In the month of January no interest rate cut was decided but expectations are still high that a cut will be needed in 2020. Any pending rate cuts subsequently tend to lead to a depreciation of the Pound against major currencies. This decision, however, will most likely occur in the first half of the year as the Bank of England will be under pressure to act if GDP, retail sales and inflation doesn’t start to improve.
The Pound could find itself under real pressure. As we saw in the GBP sell-off after the General Election, if Brexit is placed on the back burner and the poor state of the economy is highlighted it is likely that the depreciation of the Pound will be the trend for 2020.
If The Pound weakens, that’s good for exports and effectively signals to the world that the Brits have a sale on. Everything we ship overseas will be relatively cheaper whilst you get to still keep your margins high with no need to discount. Conversely, when you come to replenish stock it’s likely to be more expensive – even products sourced within the UK invariably contain materials imported from overseas and that’s if the whole product isn’t an import.
You can download the WorldFirst 2020 Currency Outlook which also includes an overview of the Euro, US Dollar, Australian Dollar and New Zealand Dollar and how they are likely to perform in 2020.
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