Pound remains stable, Oil prices affecting commodity currencies

Sterling remains suck at just below €1.16 vs the Euro and a little below the $1.30 mark vs the US Dollar. Yesterday one of the Bank of England policy makers hinted that there may well be the case for a further increase in monetary stimulus, which has kept the Pound in check.

Tomorrow will be quite important for Sterling, as we see the latest Gross Domestic Product figures, services sector data, and deficit figures. The UK has a huge deficit, one of the largest in the western world, and if this widens further the Pound is likely to weaken further. I read forecasts this morning from a Senior Currency strategist at Rabobank saying that they expect GBP/EUR rates to fall to 1.13 and GBP/USD to $1.25. Ongoing Brexit concerns are weighing heavily on the Pound and while there is uncertainty on what the UK will look like next year, it’s unlikely that the Pound will recover.

Elsewhere, Oil prices are affecting other currencies. The price of oil has been very low recently, but yesterday Opec agreed to cut production, sending the price of oil surging higher. Commodity currencies like the NOK, CAD, NZD, AUD all gained strength and became more expensive to purchase.

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