Sterling hits 9 Month lows after Boe decision

Sterling suffered further severe blows yesterday following the Bank of England’s interest rate decision. The bank voted 6-2 to keep interest rates on hold at 0.25%. Although it was widely expected that the interest rate was to remain at 0.25% it was Mark Carneys dissecting the decision which dealt sterling the damaging blows. This year’s growth forecast is down to 1.7% from its previous forecast of 1.9% made in May. It also cut its forecast for 2018 from 1.7% to 1.6%. With the gloom of Brexit lurking bringing ongoing uncertainty this consequently is having an effect and weighing down on the UK’s economy thus the decision to freeze interest rates at this time. The last time interest rates were risen in the UK was back in July 2007. Within an hour of yesterday’s announcement the Pound plummeted by nearly 2 cents against the Euro. It is key to note that Sterling is now at 9 month lows against the Euro and in its current weakened state is more likely to continue this downward trend with sentiment heavily on the Euro. Should you have a requirement to purchase Euros coming up it may be prudent to get something in place sooner rather than later due to Sterlings fragile state.

Sterling had been making steady gains on the US dollar as of late but this has now been reversed as the Pound lost over a cent on the day’s trading. Yesterday afternoon the US posted important data which handed the Pound further woes. Jobless claims came in better than expected at 240K, 5K better than last month. Markit services PMI and factory orders later in the afternoon as they both posted positive figures handing the greenback further support.

Sterling could be in further trouble today with the US releasing more data which is likely to impact the rates. Non-farm payrolls is to be posted at 1.30pm and the unemployment rate is to be announced at the same time with the figure expected to fall by 0.1% to 4.3%, should this be the case then expect Sterling to fall against the Dollar, should you have a Dollar requirement imminent and aren’t much of a gambler it may be a good idea to purchase your currency before these data releases are announced.