Sterling exchange rates have started the year poorly having fallen against both the Euro and the US Dollar.
Since rallying just before Christmas the Pound has been on the back foot as uncertainty continues surrounding the issue of Brexit and the ‘will we won’t we’ impact of leaving the single market.
At the moment Prime Minister Theresa May is suggesting that if we are not able to have full control of our borders then she will look to leave the single market and this is one of the main reasons for Sterling’s recent demise against both the US Dollar and even more so against the Euro.
This week the Pound has continued to struggle even though both construction and services data have come out better than expected.
However, the fears continue to mount owing to the uncertainty caused by the Brexit vote which will affect how the Bank of England may react in the future.
Next Wednesday the UK will announce both Industrial and Manufacturing data which have in recent times caused big movements for Sterling exchange rates particularly vs the Euro.
Any signs of negative data could cause Sterling to fall and I think with the political uncertainty continuing this will clearly weigh heavily on the Pound over the next few weeks.
With the Supreme Court judgment due to come out later this month until we have some form of resolution I think the Pound could fall lower against both the Euro and the US Dollar.
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