Sterling is once again on the back foot. Followings its resurgence from 1.07 to 1.14 in just over a month, sterling is once again is falling due to political uncertainty within the Conservative Party and on-going issues surrounding Brexit.
We have now seen a near 4 cent slide with GBP/EUR sitting at 1.1150, a 4 week low. We are continuing to hear of unrest in the Conservative Party, with some senior Tory members looking to oust PM Theresa May following her difficulties at the political party conference last week.
To compound this the on-going Brexit scenario will undoubtedly remain as a focus for any investors looking at sterling. Earlier this week Chancellor Philip Hammond said taxpayers money should not be spent on preparing for a "no-deal" in an attempt to deflect away from the government plans for a Brexit scenario without a trade deal.
For me the only ray of light for sterling in the short term will be whether the Bank of England decide to raise interest rates. Mark Carney has been fairly coy surrounding Monetary Policy in recent weeks and for me it is too early for the Central Bank to consider raising due to stagnating wage growth. For this reason I don't think we can rely on sterling seeing any positive gains from interest rate movements in the short to medium term.
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Labels: Bank of England, Brexit, GBP/EUR, monetary policy, Philip Hammond, Sterling, Theresa May