After falling to eight-month lows against the US dollar on Tuesday, sterling managed to steady the ship yesterday. Concerns about the UK’s role in the European Union and the outcome of the Referendum vote likely to be in 2016 are casting a shadow over the currency and the outlook for the British economy. Combined with the fading chances of the Bank of England following in the footsteps of the US Federal Reserve and raising interest rates, there has been a slump in sentiment for sterling.
We expect another relatively quiet day in the markets in the run up to the start of January, with attention turning to the US for the release of Unemployment Claims data, while a Bank Holiday in Germany could result in reduced trade volumes.
Sterling is under pressure in the current market and this could continue into 2016. Contact your trader in the first week of January to get the latest rates and to discuss currency strategies.