Despite a brief recovery over the past 48 hours Sterling again dropped against the dollar following the release of the Bank of England minutes. GBP/USD fell from $1.7092 to a low of $1.7023, the lowest we have seen the currency pair since July 27th.
For a free currency consultation click here.
Why did exchange rates drop?
The Bank of England minutes which were released at 9.30 (GMT) this morning showed there had been no change in stance by the MPC members. Over the past few weeks a number of the nine committee members had indicated that the UK recovery was becoming more balanced which could prompt a rise in interest rates.
However, this mornings release showed that all nine members had voted in favour of keeping rates at 0.5% for the time being and caused the pound to weaken slightly. The minutes went on to show that despite UK unemployment falling well below the central banks target rate of 7%, the MPC members are still concerned about the fragility of the UK recovery and surprisingly weak wage growth.
It looks like a number of investors were anticipating at least one member of the committee to vote in favour of rate rise but the news of a 9-0 vote has taken some of the wind out of Sterling's sails and caused the pound to drop across the board.
What could impact rates over the next couple of days?
Tomorrow sees some key releases from both sides of the pond. In the UK we will get the latest retail sales figures, while the U.S release their latest unemployment claim numbers and existing home sales figures. All have the potential to have an impact on the FX markets so if you are thinking of buying or selling dollars it is important to know the best way of securing your rate of exchange.
As a specialist currency broker I have a range of currency contracts at my disposal, for more information on the different types of contracts or to find out what rates I can offer, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.
Click here to complete the contact form.
