Further woes for the pound

Yesterday saw a continuation of the Pounds frail state as it lost nearly a cent on the Euro. The reasoning for this could be due to the ongoing poor data releases from the UK and the somewhat political uncertainty still in the air. With Theresa May reaching a year as prime minister, she is still on thin ice as leader of the conservatives following a miserable campaign in the recent elections. Various reports suggest there are some members of the party that do not think she is fit to be the leader of the conservatives, as well as calls from the opposition for her to step down.

This may be the reason for Sterling’s poor performance as of late, and with Brexit negotiations in full swing, there does not seem to be any light at the end of the tunnel. With this in mind, it may be prudent if you have a currency requirement that is either imminent or a little further down the line to get something in place sooner rather than later so there are no nasty surprises in the future as the Pound edges closer towards the sub 1.10 levels. To find out more on how to get something locked in place in advance then please contact your currency account manager to take advantage of our forward contract option.

Today there a few important data releases to take note of which could shake the rates and see Sterling fall further. Starting in the UK at 9.30am is there Unemployment rate and average earnings to be announced. The unemployment rate is expected to remain at last month’s reading of 4.6%, however, should this figure come in higher than expected then Sterling will more than likely react negatively to this. Average earnings will be released at the same time with a negative figure expected of 1.8% from the previous 2.1%. During these release’s the market will be highly volatile and should you have a requirement today it is best to get something in place before 9.30am.

At 10 am the euro zone release industrial production, the figure is expected to rise from last month’s figure by 0.6% to 1.1%, should this be the case then the Euro will gain further strength against the majors. At 2 pm the Bank of Canada will give their interest rate decision with a statement following. At 6 pm in the US, The Beige Book reports on the current US economic situation. In the late evening, business PMI is released in New Zealand and finally back in the UK as RICS housing price balance is announced.