Sterling exchange rates posted losses against most major currencies today following the UK’s latest inflation figures. Levels fell to 1.9% and below the Bank of England’s target level of 2%. This has made chances of the bank raising interest rates even less likely in the short to medium term and would suggest the record low levels of 0.5% will remain for some time. This has put pressure on sterling with levels reaching a low of 1.2135 against the Euro and 1.6655 against the US dollar. This could be a real opportunity for buyers of sterling as with unemployment figures and the important Bank of England minutes released at 09:30 tomorrow morning the pound could easily see a reversal.
Looking at other data of note look out for inflation figures from the US at 13:30 tomorrow followed by the FOMC minutes at 19:00 from the FED’s interest rate decision earlier this month. As with their UK counterpart the FOMC minutes will give insight as to future monetary policy from the FED and in particular any changes to policy since Janet Yellen has taken over from Ben Bernanke as the head of the Federal Reserve. For me it is likely they will continue with their stance on QE and look at reducing levels by $10bn per month. This I am sure will lend support to the US dollar in the months to come and may also create a shift for currencies such as the AUD and NZD.
As a specialist foreign exchange broker we offer multiple contracts to help our private and corporate clients maximize their fx exposure. This can include the use of forward, stop/loss and limit orders to name a few. When making a decision about the timing of your exchange these contracts can prove invaluable, particularly during times of market volatility. Should you wish to discuss the currency service we provide in more detail then please call the office on 01494 787478 or email Mike using [email protected]