- Posted by currencies in Rate Alerts
- July 12, 2019
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Please see this morning’s exchange rates listed at the bottom of the article. The rates are there for indicational purposes only. For live accurate prices please contact us.
The Pound continues to weaken against the Euro on a daily basis, we have never seen this type of losing trend for the currency pair since records began.
We saw a brief recovery by the pound reaching 1.1162 yesterday afternoon, however that was short lived, and Sterling lost 0.3% by the end of the day.
Overall fears for the pound are that the current position could get worse and we could see GBP continue losses in the lead up to Britain’s exit from the EU on October 31st.
There is a 72% chance that Boris Johnson will be the next PM. However, the prospect of Britain leaving the European Union without a deal has grown after both candidates to become Britain’s next prime minister said they would be prepared to lead the country into a no-deal Brexit if necessary.
There is a chance of a UK General Election in 2019 and this is something to keep an eye on, especially as Sterling drops off and becomes very volatile in the run-up to major votes.
Also, the fact that the Corbyn-lead Labour Party could gain control is an additional fear for markets.
The dollar edged lower for a third consecutive day as stronger-than-expected U.S. inflation data failed to shake convictions that the Federal Reserve will start cutting interest rates at a policy meeting later this month.
Against a basket of other currencies, the dollar fell and was on track for its biggest weekly drop in three weeks.
The Bank of England might need to cut interest rates almost all the way down to zero in the event of a no-deal Brexit and it is not clear how long it would take for them to rise again, senior BoE official Gertjan Vlieghe said.
Vlieghe’s comments, in a speech at Thomson Reuters in London, went further than those of other BoE policymakers who have said rates would probably need to be cut after a no-deal Brexit shock to the economy, but have not been explicit about the size of such a move.
On the other hand, if Britain can ease its way out of the EU with a deal, the BoE could raise rates to 1.0% in one year, 1.25% in two years and 1.75% in three years’ time, he said.