‘Backstop is dead’ and Sterling is lowest performing currency

We saw a mixed bag of data yesterday for the UK with a rise in wage growth which moved up from 3.4% to 3.6% and unemployment rate remaining steady at 3.8%. While these statistics are good, Sterling still lost ground and fell to its lowest level for 10 weeks against the Euro, and fell by a cent against the Dollar. Under normal ‘pre-Brexit’ circumstances these positive results would have strengthened the pound, as better wage growth leads to rising inflation which in turn provokes the Bank of England to raise Interest rates and this lifts the currency. However the ongoing Brexit drama coupled with fresh news earlier in the week that both Boris and Jeremy seem to want to reject the Northern Irish backstop completely and opening the door to a ‘no deal’ exit from the EU has meant the pressure on Sterling is building and positive economic data is having little effect.

Today there are more data releases, kicking off with the UK posting Retail, Producer and Consumer Price Index all at 09:30, followed by Eurozone Consumer Price Index at 10:00. At 13:30 the US post Housing data and Canada also post Core Consumer Price Index at the same time.

For those looking to purchase sterling back, these low rates are welcomed and its recommended you take advantage while they are here. Although, the road ahead is still set to be a bumpy one, it’s likely that the path will continue to be flat at least for the next few weeks, so these current levels could be sitting at the better side of low.

The Pound continues to tinker on the edge of a cliff as politicians dance around Brexit, and as we draw closer to the October deadline negotiations could grow more hostile. So if you do have an upcoming requirement to switch your Sterling for other currencies then get in touch with us. Our currency consultants will be able to monitor rates more effectively to help you mitigate your risk and navigate the current uncertain market to help you maximise your saving.