Pound exchange rates have fallen to their lowest levels against the Euro since March. This comes following lower than expected inflation figures. The market was expecting a release of 2.6% but with a release of 2.4% this all but guarantees we will not see an interest rate rise at the Bank of England’s next meeting in August.
We were also to see significant falls against other major currencies, including the US dollar, with the pound falling to a low of 1.3010, its lowest in 10 months.
Will the GBP/USD fall below 1.30?
This now begs the question of whether GBP/USD could break through the 1.30 level. For me there is a real possibility. With on-going Brexit tensions and many of the Theresa May’s government losing faith in her leadership, the pound looks vulnerable. Yes you could argue the trade war between the US and China could dampen the mood for the dollar but for now it seems to be having little effect and the dollar is going from strength to strength.
The next focus for sterling will be tomorrows retail sales figures at 09:30. This reading is expected to be poor and could easily be the catalyst to push the be pound below 1.30.
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