Sterling struggles continue

The pound continued its struggle yesterday hit fresh new lows against both the dollar and the euro. With a relatively quiet day in terms of economic releases (the U.S markets were closed for a bank Holiday) the pound held its ground for most of the day but by mid afternoon the pattern that we have so far seen throughout 2013 re-emerged and the pound fell away.

Throughout 2012 the pound was very much seen as a safe haven currency but with developments towards the end of the year in Europe being positive and the U.S seemingly avoiding the dreaded fiscal cliff (at least for the time being) attention has returned to the state of the UK economy. There still seems to be a split view with regards to the effectiveness further QE would have, and with a raft of poor recent economic data we are in danger of slipping into a triple dip recession. This week we have BoE minute released which will give us an insight to the MPC’s views on further QE which to be honest are really the only views that count and also we have the first reading of Q4 GDP which will give us any clues to the dreaded ‘triple dip’ recession. Furthermore David Cameron is due to make his speech with regards to the UK’s position within the European Union and it will be interesting to see what he says. Whether we like it or not maintaining good relations with the rest of Europe is vital for our economy to recover so all analysts will be listening intently to see just where the government stands.

All in all it is a pretty rocky time for those of you needing to sell pounds for other currencies but anyone who has a foreign currency to convert back into pounds are currently at the best levels we have seen for months and months but don’t be fooled these markets can swing the other way very quickly. Do get in touch with your account manager at Currency Index to ensure you achieve the best possible rates whatever your requirement is.