Investors head back to the safe haven dollar before BoE decision

Sterling slipped below $1.61 on Wednesday as the issues in the euro-zone push investors back towards the safe haven U.S dollar. Rates slipped from $1.6160 to $1.6070 (their lowest for two weeks) amid the uncertainty surrounding Greece and the Bank of England interest rate and Quantitative Easing programme due out tomorrow.

Any talk of the BoE extending their asset purchasing scheme could see rates continue to fall away from the 8 month highs we saw at the start of last week. The run of poor UK data seen over the last few days may prompt policymakers to add to the existing 325 billion pounds already pumped into the UK economy.  

If unchanged there is room for sterling to claw back the losses seen over the last few days and potentially push back towards the $1.6304 seen a week last Monday.

As I have said before trying to predict which way the market is going to move can be risky, looking for the market to move a fraction in your favour could end up costing you thousands of pounds. If you are thinking of buying or selling dollars in the coming months you can click here to send me a direct email or complete the contact form on the homepage of the blog. We can then discuss the different options available to protect yourself from any adverse market movements.