Remember, remember the 5th of November.
6 November, 2015
The 5th of November really did bring fireworks to the currency markets with a big bang in the afternoon as The Bank of England governor Mark Carney announced that interest rates are not to rise next year as previously planned. The Bank’s Monetary Policy Committee, led by governor Mark Carney, voted 8-1 to keep rates unchanged. It’s been over 8 years since interest rates have risen and now looks to be at least 9. As a result this caused the pound to spiral into decline against major currencies across the board losing around 2 cents on the euro and over 1 ½ cents on the US Dollar sending the gains in previous weeks up in smoke.
Before Thursday it had been a relatively good week for Sterling as it reached highs of over 1.41 on the euro for the first time in around 12 weeks creating a frenzy for euro buyers to secure currency on a attractive rate with the pound also gaining just over a cent on the Dollar before today’s damaging statement. With 2015 swiftly drawing to a close the Pound may find itself on a downward trend until some positive data comes out of the UK so it may be a good time to secure Euros or Dollars in the coming days to avoid losing out on what is to be a sliding Pound.
Some notable data releases today, the first coming from across the pond in the US with non-farm pay roll at 13.30pm which is expected to be positive figure to 180k from the previous 142k which would further strengthen the Dollar, anything negative may breathe some life into the weakened Pound. At the same time in the US the unemployment rate will be disclosed which isn’t expected to change from the last announcement but as we know anything can happen and any change will see volatility in the market in either direction depending on the figure. Later on in the UK at 15.00 is the National Institute of Economic and Social Research GDP estimate, if yesterday is anything to go by and the research was to be negative it would cause Sterling to deteriorate further, something to look out for.
If you are looking to purchase Euros in the coming months it may be a good idea to get in touch with your account manager here at Currency Index to take advantage of the current rate after yesterday’s news and with more to follow could send the Pound into limbo and would see the other currencies benefit from these unfortunate circumstances for Sterling sellers.
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