Sterling/dollar rate weekly overview.

Last week we saw the pound fall to its lowest rate against the dollar since March 2012. The week started off with sterling sitting around the 1.58 mark against the dollar, but with all the issues in the Euro zone and the UK we have seen sterling fall back against the strengthening greenback.

At present investors are in limbo as we wait for the Greek elections on the 17^th of June. The uncertainty surrounding the euro zone has caused investors to return to the safe haven US dollar, giving it strength and making it more expensive to purchase. This is one of the main factors as to why we have seen the rate fall by 4% in the last few weeks. Rates fell to a low of 1.5639 at the end of last week due to investor confidence and a run of poor data in the UK.

In the UK we had the Bank of England policy meeting minutes, showing  that the committee voted 8-1 against any QE, although the vote could have gone the other way as it was “finely balanced” which has left the door open for more monetary stimulus in the future, weakening the Pound.  Also weighing on Sterling was the revised GDP figures, that showed that the UK economy shrank by 0.3% which was not the 0.2% first thought; this was the second quarter in a row that the economy shrank, confirming that the UK has entered recession.

So in summary, the Pound is getting weaker while the Dollar is getting stronger, pulling rates down. With all of the problems in the euro zone and the uncertainty surrounding Greece, this could well continue. If you are thinking about buying or selling dollars in the coming months please contact me by clicking here to sent me a direct email or complete the contact form on the homepage of the blog,