Good news for the UK – but Pound still down

Having opened the day on new lows for GBPEUR the day’s trading didn’t improve the current trend, with the Pound still down and out. Even poor data from Germany, ZEW economic sentiment coming in lower than expected did nothing to change the current poor state of the Pound. Even compared to the USD, which is weak in its own right, Sterling dropped half a cent during the day’s trading, further demonstrating the current weakness we have with the GBP. With analysts predicting parity come new year against the Euro this downward trend could be here to stay for a while yet and the current levels could be the best for the next few months. Should the rate drop further how will that affect your international transactions? Is it still something you can afford to do?

Following the barrage of bad news for the UK, yesterday we finally had some good news for the UK. The UK government recorded a surplus in July of £0.2bn due to tax receipts from the self employed, for the first time since 2002 and highest since records began, compared to a deficit of £0.3bn this time last year. This slight positive news however did nothing to uplift the current lows in the market. It should however be pointed out that public borrowing is still 9% higher this year and that the squeeze to pockets is still very much there. (full report can be found here).

In the day’s other data Canadian retail sales came in 0.7% better than predicted, for those of you needing to sell CAD back to GBP this is the perfect opportunity to take advantage of that.

 

Today’s data

We have already had a large majority of today’s data with German Flash Manufacturing PMI and French Flash Manufacturing PMI both coming out better than predicted, already strengthen the Euro and sending the Pound to further lows.

The rest of today is a quiet day on the markets with no major data out. No news however is equally as bad as we have seen with sentiment heavily favouring Euro clawing closer to GBP. With some airports already below one Euro to the Pound, how long before we see banks offering the same?

Speak to your account manager at Currency index today to stay updated and explore your best options.