Sterling drops in early morning trading…. interest rate expected to be on hold for 23rd month running however I feel an interesting day ahead

The Bank of England are expected to keep U.K interest rates on hold for the 23rd month running at midday today, however always be aware surprises may pop up.

For quite some time there has only been one member of the MPC (Monetary Policy Commitee) in favour of a rate hike, however in the minutes from todays meeting, usually announced on a Wednesday approximately two weeks from today should in my opinion show that a few more members are now in favour of the hike.

After reasonable indusrial and manufacturing data out today we are consistantly hearing mutterings of a potential rate hike, personally I think this may happen around March and for those of you that closely follow the markets you will be aware that an interest rate hike is gererally seen as positive for the currency concerned.

Markets move on rumour as well as fact so any mention of this potential hike by a member of the MPC may well lead to rapid Sterling gains, if you have a foreign currency to exchange into Pounds it may be prudent to consider your options or at least let someone who is constantly watching the markets know what you are looking to do.

I can do this for you and jump on the phone should we see any major market movements be it a great opportunity or the markets moving rapidly against you.

Also be aware of the current European bond sales….. It is Spains turn today so expect volatility from this too – Aidan has placed an explanation of this below but just get in touch for further information!

Personally I think we will be back above the 1.20 mark against the Euro and over 1.58 against the Dollar by the end of the week however as always you just never know!

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