Sterling continues to suffer

Yesterday saw another day where sterling lost ground, following on from the beginning of the week where sentiment led trading saw the pound lose further ground against all its major pairings. Tuesday was no different, apart from there was some UK data to contend with in the shape of trade balance but despite from posting better than expected results, the pound didn’t yield the benefit. Even with German trade balance coming in under the analyst forecasts, the pound managed to lose a cent and a half against the single currency and a cent against the greenback. Even against commodity led currencies it lost ground, as the AUD gained nearly 3 cents, the Kiwi took 2 cents and the Loonie over 1 cent, while the crumbling South African Rand gained over 1.5 percent.

This of course is down to investor sentiment yet again being away from the pound as concerns over a so called Brexit increase daily as time ticks on to the expected referendum in June. That is a long time for the pound to keep declining if that is the trend we seemingly appear to be in and those with a transfer, not only near term, but longer term, might be wise to consider locking in their exchange rate sooner rather than later to avoid disappointment and ultimately being priced out of their purchase. Bear in mind the last time rates were this low we were on an upward trend from 1.20, so we can see the potential downside risk and where it may end up.

So onto today and we have a fairly quiet day yet again, with only a couple of low key releases this morning. The real action comes this afternoon with a key speech from Fed chief Janet Yellen and the NIESR UK GDP estimate, both coming at 3pm. Overnight the US release their monthly budget statement and down under the NZ business PMI comes out. So again, likely to be sentiment led and potentially another day of downside risk. Probably worth calling one of the Currency Index team first thing to discuss your requirements and get some friendly guidance for one of our experienced team.