GBP weakenes to a 4 and a half month low against the USD and rocks against the Euro!!
Sterling exchange rates have had an extremely bumpy ride today. The pound fell to over a 4 and a half month low against the USD and witnessed losses down to 1.2370 against the Euro.
The reason for sterling dropping across the board was down to more negative data to come out of the UK economy. UK manufacturing showed that activity shrunk at its fastest pace in three years. With the UK economy already under massive stress showing that we are officially in a recession, this latest data release has put a lot of stress on the exchange rate.
Every time that we see negative data for the UK the markets are interpreting it that we will see the Bank of England initiate more QE and this makes the pound fall even further. After all we all know what the mere mention of QE does for the pound.
If you are a seller of Euros to buy sterling then this morning brought a small glimmer of hope where you could have capitalised on the Euro spike. The bad news is that the pound has marginally recovered and it is unlikely that we will see any further major declines for the pound against the Euro as I feel that the major issues in Europe outweigh those of the UK economy.
Against the USD the pound has had its worst week since November last year. The Bank of England has stated that as issues persist in the Euro zone, the UK economy will be under pressure and sterling will more than likely fall.
We have a very long bank holiday weekend for the golden jubilee. Because the UK will be closed for business the currency market will still be moving around so you may be wise to get any limits in the market prior to close of business. You can email me with your requirement and details at bma@currencies.co.uk so we can discuss the best options that are available to you.
