Sterling fell to just below €1.13 yesterday, and the cause was, as you would probably expect, Brexit. Theresa May and her cabinet discussed Brexit and decided that they want a transition period with the same access to EU markets as currently. However, the EU Chief Negotiator Michel Barnier poured cold water on the chance of Financial Services being part of trade talks. As Financial services make up a large portion of the services sector, which in itself forms more than 75% of the UK's GDP, the news was taken as Sterling negative, and the Pound dropped away.
This morning worse than expected German inflation numbers weakened the Euros slightly helping to support the GBP/EUR pair at around 1.13. Later today, the BoE governor Mark Carney will be giving a speech, and regular readers will know that his comments often affect the Pound, usually negatively.
Elsewhere, the Pound/South African Rand pair has had a very volatile few days, due to the elections in South Africa. In the last few weeks the rate has dropped a staggering 10% falling from 19.00 to 17.00. This is due to the ZAR getting stronger due to optimism of a new political environment in the country, and the currency has therefore become more expensive to purchase.
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Labels: GBPEUR, GBPZAR