Sterling steadily fell against its counterparts throughout trading yesterday, falling 1 cent to €1.1650 vs the Euro. It started when the manufacturing figures I mentioned in yesterday's post came in below forecast showing this sector is not growing as fast as thought. You can view live interactive currency graphs for the last 3 months for all major Sterling pairs here.
The main reason for the fall in the pound however is simply sentiment. When US markets opened, traders continued to sell the Pound sending it lower and lower throughout the day. Sterling is very sensitive to political concerns at the moment, and as I have mentioned several times in the last few weeks, when Brexit negotiations start in the coming weeks there is a good chance that the Pound will come under further pressure pushing rates lower still.
The only thing I can see that could keep rates supported is political uncertainty in Europe due to upcoming Dutch and French elections. Once these are out of the way, the Pound will be firmly back in the spotlight and given how much it has fallen since last year purely on the uncertainty of what Brexit will mean for the economy, the reality of Brexit could easily cause the Pound to fall to lows of €1.13 or below that we saw in January.
Inflation data from Europe later this morning could provide some movement for GBP/EUR in the short term, and US jobless claims this afternoon will drive GBP/USD rates, along with an further hints of a US rate rise this month.
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Labels: Best Euro exchange rates, Brexit, Exchange Rate Forecast, FX, GBPEUR, GBPUSD, Pound, Pound falls, Sterling