Looking back at the posts from other authors this week I hope their advice was heeded to use Sterling as a purchasing currency ahead of the events today. GBP/EUR, GBP/USD, GBP/AUD and a host of Sterling’s currency pairings fell sharply this afternoon as news for the UK interest rate hike timeline came in even worse than expected.
For the fourth consecutive month Sterling has suffered as a result of delays in an interest rate hike for the UK economy. This month, however, was worse than its predecessors, which explains why Sterling fell by more than a percent against most currency pairings today. As an example the day high and low for GBP/EUR was 1.42 and 1.39 respectively.
Mark Carney, the Governor of the Bank of England, had originally been hinting that rates could rise as early as Spring 2016. All of a sudden, after ending months of dodging questions, he has finally admitted that a hike was now firmly off the table until 2017.
Sterling will now be facing a difficult month ahead as investors unwind their current positions on the Pound and look elsewhere for greater short-term returns. One of the reasons Carney stated a hike was off the table was because he was expecting inflation to worsen. When this data comes out next week and confirms his fears Sterling’s value could face similar falls already experienced today against most of its currency pairings.
If not for news that the Volkwagen scandal doubled to include petrol powered cars as well as diesel on Wednesday, GBP/EUR should be even lower. The further loss of €3bn on the European stock-markets caused the Euro to weaken by two cents ahead of the events today. As such the fall this afternoon GBP/EUR could have hit as low as 1.37. A cushion for Euro buyers who did not move ahead of the announcement today.
I strongly recommend that anyone with Euros or various forms of Dollars to buy with Sterling over the next few months should contact me on [email protected] to discuss a strategy on your transfer and receive a competitive quote in order to maximise the value of the Pounds in your possession.
These current rates of exchange can be fixed to avoid future losses on your transfer.