Sterling decline continues

Yesterday we saw the pound lose ground across the board for a second day after the Bank of England cut the growth forecast on Wednesday.

Investors were cautious over the worries in Europe as fears more countries will be drawn into the ever widening crisis. Greece has no government and more problems in Spain arose, with shares in Spanish banks taking major losses and there were some reports of people withdrawing money from them in panic. The Euro underperformed against all currencies except against the pound as investors took onboard the Bank of England’s inflation report and warnings of further QE. The single currency, maybe due to being over sold against sterling over the past week, gained nearly a cent against the Pound. The US dollar seemed to be the safe haven, gaining over a cent against the Pound, giving the lowest trading levels since March.

Today will be another day led by investor sentiment and the European crisis with little data releases. We have German producer price index in the morning followed by Canadian consumer price index after lunch. So will sterling make back some losses or will the slide continue?

We are still trading a cent off a 3 ½ year high so trading levels are still very attractive compared to a few months ago. If you have a currency requirement coming up do get in touch with us here at Currency Index and discuss the options available to you for minimising your exposure to these volatile markets.