Sterling has continued to weaken against the Euro throughout this week, with it’s low point so far coming yesterday as the pair returned to their lowest level since August down at 1.1589.
The reasons behind the weakness are mainly investor dovishness as expectations of further monetary easing from the Bank of England heat up. If economic data releases continue to disappoint there’s a likelihood that an additional interest rate cut could occur and the BoE has alluded to this previously. Those with a Sterling currency exchange requirement should be aware of this this as interest rate cuts usually weaken the currency in question.
Sterling exchange rates had previously been boosted by hopes of what’s known as a ‘Soft Brexit’ but those hopes have been dampened, as it’s now likely that the UK Prime Minister will invoke Article 50 in the early months of next year and this has also weakened Sterling.
This week there has been little fightback by the Pound. The only economic statistic released this week was the Public Sector Net Borrowing figure which came out slightly better than expected, in so much that the deficit didn’t widen by quite as much as many analysts had expected. Despite this markets remained relatively unchanged which indicates a negative bias towards Sterling at the moment.
The key news within financial markets at the moment is that the US FED Reserve has chosen to keep rates on hold. GBP/EUR has barely reacted with the pair down 0.2% at the time of writing and trading at 1.1622.
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