Further fall for the Pound
8 August, 2016
Last week the market finally saw some significant movements as the Bank of England cut interest rates on Thursday from 0.5% to 0.25% – a record low and the first cut since 2009. The Bank also increased their QE program which sent the pound 1.75% down against the Euro and 1.6% down against the Dollar.
On Friday the focus turned to the US as unemployment figures, and non-farm payrolls data was announced. July’s payroll figures excelled estimates as the economy added 255,000 positions. 75k over the 180k estimate. This data gave the Dollar over a cent boost against both the Pound and the Single currency. Now that the Dollar is looking more positive, GBP-USD rates are likely to continue to fall as these positive figure has caused some speculation that the FED could introduce a rate hike sooner than expected.
All in all, not a great outlook for the pound as analysts predict GBP-USD rate could fall as low as 1.20 and GBP-EUR as low as 1.10 by the end of the year. So for those of you who have an upcoming requirement to buy currency it would be valuable to call in and speak to one of or friendly brokers to discuss the best options to secure your currency. Our forward contracts are a great tool to secure your currency ahead of time with just a 10% deposit and avoid any losses against a downward trending market.
The Week Ahead:
USD 15:00 Labour Market Conditions Index (Jul)
GBP 09:30 Industrial Production (MoM) (YoY)June
GBP 09:30 Manufacturing Production (MoM) (YoY)June
GBP 09:30 Goods Trade Balance (Jun)
CAD 13:45 Housing Starts s.a (YoY) (Jul)
GBP 15:00 NIESR GDP Estimate
AUD 01:30 Westpac Consumer Confidence
AUD 02:30 Investment Lending for Homes
AUD 02:30 Home Loans
AUD 04:05 RBA’s Governor Glenn Stevens Speech
USD 18:00 10 Year Note Auction
USD 19:00 Monthly Budget Statement
NZD 22:00 RBNZ Interest Rate Decision, Monetary Policy Statement and Press Conference.
USD 13:30 Initial Jobless Claims, Import and Export Price Index.
NZD 23:30 Business NZ PMI
NZD 23:45 Retail Sales and Retail Sales ex Autos
EUR 10:00 Gross Domestic Product
EUR 10:00 Industrial Production
USD 13:30 Retail Sales and Retail Sales ex Autos
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