Sterling continues to perform poorly

14 October, 2016

Grace Rae

News headlines this week have continued to focused on last week’s ‘Flash Crash’ which snowballed the pounds weakness and Teresa May’s comments at PM’s question time where she commented that she is intending to hold ambitious negotiations to gain maximum possible access to the single market and deliver on the public’s vote to better control the movement of people. It’s fairly certain that the furture will bring some heightened uncertainty around the Pound and this view of a ‘Hard Brexit’ is likely to see sterling weaken further.

A majority of investors don’t like what they’re hearing from the UK government just now about the manner of Brexit the country is going to go through, and as a result they’re selling off the pound. Its known that investors tend to move quite drastically when big events like last week’s ‘Flash crash’ happen and usually we would see the rates recover overtime. However, it does looks like these low rates are set to stay, with many banks and analyst predicting the Pound to fall as low as 1.10 against the US Dollar and parity against the euro. Some holiday makers planning to visit Europe may have had a nasty shock this week as some airport currency providers have been offering as low as €0.88 for £1.

Yesterday traded fairly flat throughout the day with no key data release out to move markets, and the pound continued to trade at the same levels against the Euro and Dollar throughout the day. Today however we have a few data release due. This morning at 10:00 EUR Trade Balance figures for August are due then this afternoon US Retail Sales for September due at 13:30 , Reuters Consumer Sentiment Index at 15:00 and then Fed President Janet Yellen speaks at 17:00 and the Bank of England’s Governor Mark Carney is also due to speak today at 14:00. We may see some movementS in the rates so if you have an upcoming requirement do get in touch with your Currency Index account Manager for some friendly guidance on how we can help you secure your foreign currency.

Remember, you don’t have to part with your funds straight away to secure your currency. Our forward contracts allow you to lock in a rate up to a year ahead with just a 10% deposit, a great tool to protect you against the current market trend.