Currency Note Sterling

Sterling stumbles badly

By Smart Currency October 7th, 2013

Last week highlights how quickly sentiment can change as sterling lost significant ground against both the euro and US dollar on Friday. It appears that investors started to believe comments from the Bank of England who promised not to raise interest rates until the UK economy is showing clearer signs that the recovery is sustainable. Furthermore, sterling struggled as investors closed off positions before the weekend and locked in profit after sterling reached nine and ten month highs against the euro and the US dollar respectively last week especially in light of some key releases falling short of market estimates. The main event this week will be the Bank of England’s decision on monetary policy. No change is expected with regards to the base interest rate or to the level of quantitative easing. Other key releases this week includes the National Institute of Economic and Social Research estimate on the UK’s GDP which is expected to forecast growth at 0.9%, trade balance figures and data showing the current levels of manufacturing production. Call in now to see if sterling can recover from Fridays sell off.