Sterling Crashes Against Every Major Currency after Bank of England Raises Interest Rates

The pound has crashed this afternoon against every single major currency after the Bank of England raised interest rates this afternoon for the first time in a decade. It is the worst day of trading for the pound since the Brexit vote last year.

The Bank of England have raised rates today by 0.25% to 0.5% taking levels back to where they were before the Brexit vote last June. What is unusual is that the pound has fallen so much across the board which has taken the markets by surprise.

GBP EUR has fallen from a high of 1.1404 to a low of 1.1187 in the space of just a few hours representing a market movement of around 1.8%. In real terms a €200,000 transfer from Euros into pounds will now generate an extra £3500 compared to this morning. Similarly GBP USD has fallen to 1.3060 from a high of almost 1.33 whilst GBP AUD exchange rates have dropped by 2% to just over 1.69.

This is a very unusual situation that is being observed as normally a rate increase is good news for the currency concerned. This time though sterling has come crashing down creating some seriously good opportunities for those clients looking to buy sterling. The pound has fallen as result of the accompanying minutes that were released from the Bank of England which were particularly dovish with no further rate increases expected anytime soon. The next interest rate increase is now not likely to be seen until August 2018 and the future direction of the pound will now be determined by progress, or lack of it in the Brexit negotiations.

For those clients looking to sell Euros or dollars for example there is a great short term window of opportunity to convert. Rates were not favourable a few days ago for buying pounds so please get in touch if you are in this position and need to move currency to take the risk out of it and maximise on the kind of levels that are available. This may prove to be a short term opportunity so please get in touch to discuss your specific requirement.

Selling Australian Dollars?

Clients with an Australian dollar requirement have seen a major shift in the rates this week. GBP AUD was heading towards 1.75 after the dovish set of minutes from the Reserve Bank of Australia continued to put pressure on the Aussie. That has all changed today though with buying prices below 1.69. There is an good opportunity to sell Australian dollars as a direct result of the news from the bank of England.

If you would like further information on sterling exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact myself James on 0044 1494 787 478. Alternatively, I can be emailed directly on jll@currencies.co.uk