Currency Note Sterling

Sterling stumbles, will it “collapse”

By Ricky Bean December 13th, 2013

Sterling has certainly stumbled against the euro losing over two cents in less than two weeks. This week had started well with sterling on the front foot with optimism in the markets helping to buoy the currency. Strong manufacturing production and house price data then helped push sterling higher, however, events from elsewhere then weakened sterling, bringing about a near perfect see-saw week against the US dollar to rest at similar levels to the start of the week, whilst ending down for the week against the euro. This weakness was compounded by words from a member of the Monetary Policy Committee (MPC), who stated that inflation had dropped sharply and unexpectedly, which will ease pressure on the Bank of England to reduce interest rates. Furthermore, the MPC member questioned the effectiveness of the central banks “Forward Guidance” policy. Today, another MPC member is due to speak, in what is the only scheduled UK event with cause to impact the markets. Call your trader now for the latest on sterling, after a roller coaster week and to discuss the likelihood of sterling’s fall turning into a “collapse”.