Yesterday was a tough day for sterling overall, as it retreated from Monday’s two-week high against the US dollar, and lost ground against the majority of its trading partners as Bank of England (BoE) Governor Mark Carney spoke to parliament. Sterling fell across the board as Mr Carney warned of the risks to UK growth should the nation vote to leave the European Union (EU) in June. Describing the possibility as the ‘biggest domestic risk to financial stability’ Carney assured members of Parliament that the BoE would make extra liquidity available to banks in the run-up to the referendum.
Despite this, sterling found support throughout the afternoon with many investors viewing a British exit from the EU as an unlikely scenario. Carney also maintained during his testimony that the BoE will not take sides, but will work to ensure financial stability, whatever the result of the Referendum vote.
Today sees the release of manufacturing production figures from the UK, which are forecast to show an increase of 0.2% throughout February. Following 3 months of contraction within the industry, this could provide sterling with welcome support.
If you are looking to buy or sell sterling, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.