Sterling loses ground on the back of BoE growth cut

Sterling fell by nearly half a percent against the U.S dollar on Wednesday despite official figures showing unemployment had fallen by nearly 49,00 for the months July-September. Cable fell from the days high of $1.5914 back to $1.5840 as BoE (Bank of England) Governor Sir Mervyn King announced that the central bank had cut the UK growth forecast for 2013 back to 1%. 


 







The positive news for the UK continued this morning (Wednesday) as the unemployment figures were released, The Office of National Statistics (ONS) announced that unemployment had fallen to 2.51 million largely thanks to a decline in youth unemployment. This latest data release  pushed the pound back over $1.59 mark early doors, but could not sustain the gains as Sir Mervyn presented the BoE quarterly inflation report.

Despite the recent UK GDP growth for the 3rd quarter the report said the UK could be stuck in a "low-growth" environment,  as  the continuing economic issues surrounding the euro zone and the rest of the world would continue to impact the United Kingdom.

Sir Mervyn indicated that growth would continue to zig-zag, and that the growth for the last quarter (July to September) was influenced by a number of one-off events, such as the Olympics and the Queens Jubilee. These events over inflated the figures and are not necessarily "a reliable guide to the future".

Later on today (Wednesday) we could see further movement for cable as The Federal Open Market Committee (FOMC) minutes are released from their latest meeting. The FOMC meet eight times a year  to review economic and financial conditions in the U.S. The minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

With the volatility set to continue it is important as ever to get the timing right on currency transfer. To put today's rate movements into perspective a £200,000 would have seen a difference of nearly $1500 between the high and low of the day. At Foremost Currency we have a number of different currency contracts that can protect you from adverse market movements or help you target a rate that is not currently achievable. To take next step click here to complete the contact form for a free, no obligation consultation to see how we can make your money go further.