Good afternoon,
The last 36 hours has seen Sterling continue its recent trend and lose further ground against the U.S dollar, since my last post exchange rates have dropped half a per cent to a low of $1.5230 (the lowest we have seen for 10 days). We could see further losses tomorrow as the UK release it's retail sales figures for March and market expectations are for the sector to contract.
Today's decline was largely down to UK unemployment figures, the number of people out of work between December and February increased by 70,000 and prompted the pound to fall against a basket of currencies. Further losses for cable were limited from the news that the number of people now claiming Job-Seekers Allowance fell by 7,000 in March.
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I mentioned in Monday's post that the Bank of England (BoE) minutes were being released this morning and as expected there was little change to what was forecast. Interest rates remained on hold while the number of policymakers pushing for more Quantitative Easing (QE) also remained the same. The minutes showed that three out of the nine MPC members voted for further stimulus and once again the Governor of the BoE, Sir Mervyn King was one of them.
The BoE will meet again at the start of May and by that time we will know if the UK is back in recession. If the Gross Domestic Product (GDP) figures show that we are back in recession it will be interesting to see how the policymakers react, I wouldn't be surprised if more QE was on the agenda and if they were to add to the £375 billion that has already been pumped in the UK economy it will be a very testing time for the pound and exchange rates. It would be highly likely we will witness a drop in rates across the board with GBP/USD falling past the $1.4830 we witnessed a couple of weeks ago.
With so much uncertainty surrounding the currency markets it is important to know what options are available to you before the GDP figures are released. If you need to buy or sell any currency in the next few weeks I can help to take the risk element out of your transfer and protect you from any adverse market movements. I can offer exchange rates that are up to 5% better than what you would be able to achieve through the bank, so if you would like to discuss the options in more detail and find out how much money I can save you complete the contact form below for a free, no obligation consultation.
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