GBP/EUR rates have fallen once again during Thursday’s trading, following poor UK Retail Sales figures released this morning.
The Pound has fallen below 1.12 against its Euro counterpart, hitting 1.1182 earlier this afternoon.
Apart from a similar dip in March, these are the lowest levels seen since November 2017 as investors continue to shy away from Sterling as concerns over Brexit negotiations intensify.
Whilst there had been an expectation that the Bank of England (BoE) may look to raise interest rates next month, this morning’s poor Retail Sales figures, coupled with yesterday’s negative inflation data has heaped further pressure on Sterling.
It truth, it’s been a miserable week for the Pound with the markets still reacting to last week’s resignations of the now former Foreign Secretary Boris Johnson and chief Brexit negotiator David Davis. UK Prime Minster Theresa May seems to be facing a losing battle, trying to form a cohesive Brexit strategy, with key members of her Government ready to criticize here at almost every turn. This scenario is unlikely to help drive investor confidence in the Pound, which has struggled to make any sustainable impact against the Euro in recent weeks.
Comments from BoE Governor Mark Carney this week, where he indicated that a no deal scenario with the EU would cause the Central Bank to re-think their current interest rate strategy; comments which have seemingly diluted the chance of a rate hike next month, add to the pressures currently impacting on Sterling.
The slight silver lining is that the Pound does seem to be finding some support around 1.12, and with so much negativity surrounding the UK economy this week, any positive economic data releases or reports of a softer type Brexit approach may help to alleviate some pressure on the Pound.
During a testing time for Sterling, it’s key to stay in the loop about factors that could impact GBP rates negatively. To speak to Matt and discuss your requirements and get further insight into the potential outlook for the Pound, call on 01494 725 353 or email Matt using [email protected].