Good Morning. The pound had a torrid run last week, with rates steadily falling. Sterling fell further this morninig, hitting its lowest level in almost five months against the dollar on the view that UK interest rates will remain low and that the outlook for the British public finances remains bleak. Rates @ 08:30am are as follows:
- GBP/EUR 1.0719
- GBP/USD 1.5749
- GBP/AUD 1.7508
- GBP/NZD 2.1652
- GBP/CAD 1.6426
- GBP/JPY 142.30
- GBP/ZAR 11.730
Pound falls further
Sterling fell on Friday, hurt by a broadly firmer dollar after comments by U.S. Federal Reserve Chairman Ben Bernanke seen by market players as hawkish.
Those with Euros to sell have benefited by a week long run of poor UK data, bringing rates to the best they have been for around 5 to 6 months:
As you can see from the chart, rates have continued their downward trend after poor UK data outweighed the positive news.
Data on Friday showing UK output prices surprisingly turned positive and a slight narrowing in the trade deficit also failed to turn around the pound. Sterling was a big loser against the dollar because of expectations Britain will be among the last major countries to withdraw its extremely easy monetary policy due to its poor economic performance.
“Sterling remains most vulnerable against the dollar’s rise in the recent turn in global sentiment” spurred by the market’s reaction to Bernanke’s comments, said Ian Stannard, currency strategist at BNP Paribas.
Sterling had actually risen on Thursday after the BoE maintained its 175 billion pound asset buying programme and kept interest rates at a record low of 0.5 percent, as expected.
The focus is on the November meeting when the central bank will have new economic forecasts. Mo