Sterling loses ground against the dollar

Monday saw the pound fall to a two week low against the dollar, as uncertainty surrounding the Greek bailout package continued. There was also a down turn for the pound as UK services sector data came back lower than expected.

This Thursday is the deadline for Greece to complete its bond exchange with private creditors and if a deal cannot be reached there is a chance it could affect the recently agreed bailout package. This could push Greece towards a catastrophic default and cause investors to head back towards the safe haven dollar.

The UK's service sector continued to grow in February, but not as quickly as had been forecast. Despite seeing a small drop, the latest data release confirmed the service sector is still moving in the right direction adding to signs that a double-dip recession will be avoided. This reduced the pound falling further but according to some analysts the outlook for the pound will be determined by the outlook of the Euro.

With all the uncertainty, the GBP/USD cross dropped into the $1.57 range early yesterday, it’s weakest since the 24th Feb before slowly recovering to the mid $1.58’s by the afternoon.

It shows how quickly the rates can move as only last week we saw the dollar rates hit their highest since November 2011. If you want to take advantage of the highs and protect yourself from adverse movement you can look at a Forward contract. A forward contract allows you to book rates of exchange for up to two years in advance and will give you the piece of mind that your money is safe. If you want to discuss forward contracts or the other options that are available click here to send me a direct email or complete the contact form on the home page of the blog.