Sterling exchange rates took another bashing today, breaking through the range that we have been stuck in for the past month and leading the GBP/EUR rates hitting the lowest levels we have seen since the U.S election (8th November 2016).
For anyone selling foreign currency to buy Pounds this may be another fantastic opportunity and for those looking to buy foreign currency in the near future, the fact we have now broken through this level of resistance would be a bit of a concern.
Today the markets listened closely to Bank of England MPC member David Broadbent speak, and had hoped for comments on his thoughts on an interest rate hike. Unfortunately he didn’t feed the markets with what they wanted and spoke fairly negatively about the economy as a whole, leading a sell off for the Pound.
Interest rates are one of the key points of focus at the moment and anyone who has hopes of a Sterling recovery will need positive comments about an interest rate hike being something that could happen this year. Today’s comments bought the expectation of a hike this year down so did quite the opposite.
For a long time now, major economists and analysts have been warning that the Pound may face a huge drop off due to brexit and how it will impact the economy , and there is a worry that this could be starting to come true.
After the issues we saw with the recent election and the uncertainty that that caused we were hoping that economic data over the past week or so would start to back the Pound up but so far all we have seen is negative after negative and signs that although the economy isn’t totally falling through the floor it certainly isn’t doing that well compared to expectations.
Tomorrow morning we have the release of unemployment figures and average earnings figures. Average earnings are expected to drop off a little which again would be negative for Sterling as inflation is on the up. This means goods and services are costing more but people are earning less, a very bad sign for things to come.
If you have the need to buy or sell foreign currency in the coming days, weeks or months then this is the most important time to have a proactive and efficient broker on your side.
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