Tuesday, 16 February 2016

Pound continues to fall against Euro and USD

Despite a slight recovery in GBP/EUR rates this week, the downward trend has continued today. Inflationary concerns are weighing on the Pound, and this morning figures showed that inflation was lower than had been expected. This has weakened the Pound as it means an interest rate hike is now firmly off the cards for the foreseeable future.

Also pushing the Pound lower are the ongoing negotiations in Brussels, where David Cameron is currently trying to garner support for his EU reforms. You can read about these events in more detail elsewhere such as the BBC website. For the currency markets, what it means is continued uncertainty. Talks are very fragile to say the least, and currently it still looks 50/50 as to whether the UK will vote to remain in the EU.

Markets hate uncertainty, and this is reflected in today's fall for Sterling as you can see from the GBP/EUR chart below, showing the drop from €1.30 to €1.2835. I think the rate could continue falling for the rest of the week. 


Protecting your currency requirement


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