Sterling falls against Dollar & Euro
- Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Inflation, Mark Carney, Sterling, UK, Uncategorised
- April 4, 2017
- No Comments
Sterling slipped against the dollar, euro and yen today, kept under pressure by uncertainty over the terms of Britain’s exit from the European Union and by doubts over how soon the Bank of England will start raising interest rates.
For sterling, political risk has been in the driving seat for nine months, with the currency losing around 17 percent against the dollar since Britain’s vote to leave the European Union last June.
U.K. economic data may be showing “the first signs of cracking” The pound is now a bit of a currency that when risk appetite declines, so traders club together and say ‘with geopolitical risk, economic risk, Brexit risk, what do we do? We sell the pound.
BoE Governor Mark Carney is set to give a speech on Friday, while fellow Monetary Policy Committee (MPC) member Gertjan Vlieghe speaks on Wednesday.
Markets moved to price in a chance of an interest rate rise in the next year last month, after outgoing MPC member Kristen Forbes unexpectedly voted for a hike.
But many economists say that despite accelerating inflation, the central bank is unlikely to tighten monetary policy while Britain is negotiating its exit from the EU in talks over the next two years.
Sterling has fallen over 11 percent against the euro since the vote for Brexit, with banks split over its likely direction in the coming months.
Leave a Reply