Sterling has edged lower against the Euro overnight, as uncertainty returned to UK politics following the sacking of Cabinet minister Damien Green. Also pushing the Pound lower was a report by the IMF that downgraded UK growth forecasts, stating that Brexit uncertainty was causing firms to delay investment plans.
The IMF said that “Sterling has depreciated, inflation has gone up, wages have been squeezed as a result, and investments have been slowed down and are certainly lower than where we would expect them to be.”
Pound/Euro has fallen to around €1.1255, and with a long road ahead in terms of UK/EU trade negotiations, in my view significant downside risks remain for the Pound.
What could move exchange rates today?
UK Consumer confidence figures have already been released and the number was slightly lower than forecasts. At 09:30am we’ll see the latest Public Sector net borrowing figures; analysts expect the deficit to have widened, and Sterling may fall if that’s the case. Elsewhere, US jobless numbers could affect GBP/USD. Canadian Inflation numbers and Retail Sales could move the GBP/CAD pair.
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