A poor start to the week for sterling as it drifted lower across the board on a quiet day of trading and much lower trading volumes during the holiday period. We have seen first thing this morning a small pickup against the euro.
Sterling found itself under pressure after the British Chambers of Commerce warned that political uncertainty in the UK was unsettling investors in advance of the 2015 general election. In addition, it is looking increasingly likely that the Bank of England will not look to raise interest rates until early 2016, thanks in part to a cooling housing market and lower than expected inflation triggered by falling commodity prices. This saw sterling fall away from recent multi-year highs against the euro, and continue to struggle against the US dollar.
Another quiet day lies ahead, with housing inflation data set to be the only influential data release from the UK. Please call your trader to get a detailed update as exchange rates can move quickly.