Fresh New Lows For Pound

Sterling slipped even lower today, as investors brushed off the finance minister’s budget statement the previous day as largely a “non-event” that would do little to boost growth in Britain as it prepares to leave the European Union.

While Philip Hammond announced a rise in official growth forecasts for this year and cut predicted rates of public debt from November estimates, he also cut growth forecasts for the coming years.

His statement was not enough to turn either the pound or the FTSE index positive on the day. More impactful for markets was a much stronger than expected ADP jobs report from the United States, which economists said made an interest rate hike from the Federal Reserve next week all but inevitable.

The U.S. data were released as Hammond delivered the last part of his speech, and sterling, which had ticked a little higher after growth forecasts for this year were revised, fell back to a eight-week low of $1.2139 as the dollar surged across the board on the jobs numbers.

The US economy will grow faster in 2017 than 2016, whereas the UK will not and the 2018 gap will be significant. It all continues to weigh on sterling, and $1.20 remains in our sights.

Markets are concerned by signs that the 12 percent fall in the pound in trade-weighted terms over the past year — which has driven up inflation — and uncertainty over how Britain negotiates its exit from the EU are finally having an impact on UK household spending.

The pound remains vulnerable when the markets focus shifts back to Brexit.

Leave a Reply

Your email address will not be published. Required fields are marked *

What's Going On?

Currencies 4 You Ltd is a company registered in England and Wales (registered no. 06866898). Registered office: Regus House Victory Way Admirals Park, Crossway, Dartford, Kent, DA2 6QD. Currencies 4 You Ltd Payment and Foreign Currency Exchange Services are provided by Currency Cloud Limited, Equals Connect Limited and Ebury Partners UK Limited. Currency Cloud Limited. Registered in England No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money. FCA registration number: 900199. Payment Services are provided by Equals Connect Limited, registered in England and Wales (registered no. 07131446). Registered Office: Vintners’ Place, 68 Upper Thames St, London, EC4V 3BJ. Equals Connect Limited are authorised by the Financial Conduct Authority to provide payment services (FRN: 671508). Currencies 4 You Ltd is partnered with Ebury Partners UK Limited as its Programme Mananger. Ebury Partners UK Limited are authorised and regulated by the Financial Conduct Authority as an Electronic Money Institution. (Reference Number 900797). Ebury Partners UK Ltd is registered with the information commissioners office with registration number: ZA345828. | Terms and Conditions | Privacy Statement | Careers