The wet
weather disappeared on Monday and so did the gains for sterling against the U.S
dollar. Rates slipped to their lowest levels for a week as the growing concerns
in the Euro-zone debt meant investors looked for alternative safe haven
currencies.
The pound
lost ground against the greenback after the markets reacted to news that the
yield on Spanish 10 year bonds increased to the highest level since the euro
was created, adding to speculation that the country will seek further aid in the
form of a bailout.
Cable
fell by nearly 0.8% to $1.5486 falling from the $1.57 seen last week. It is
another indication of just how volatile the currency markets can be and with more
talk of Greece
leaving the single currency it is possible we could see rates fall even further.
Let’s not
forget that UK
is not much better. In recent weeks we have seen a run of poor data that has
lead to further monetary stimulus from the Bank of England (BoE) and the possibilities
of another interest rate cut. If the BoE decide that a interest rate cut is
needed we could see sterling fall against a number of currencies, not just the
dollar. So the results of the BoE meeting in August will be eagerly
anticipated.
Later
this week could also have a bearing on exchange rates, GDP data released on Thursday
will show if the UK
has contracted for a third consecutive quarter and could lend further support
to the dollar.
With so
many conflicting opinions on where markets are headed, it’s more important than
ever to know your options and the tools available so you can achieve the best
possible exchange rate. Click here to complete the contact form and take the
next step to making the most of your currency.
