To round off a week that has been focused primarily on the US rate hike (and consequent dollar rally), market interest lay on the potential ‘Brexit’ on Friday. David Cameron hinted that the UK may hold an In-Out vote on membership to the European Union (EU) in 2016, rather than in 2017, as originally anticipated. This move has shaken trader confidence and as a result, sterling finds itself at 0.2% weaker against the euro.
The ongoing outlook for sterling is increased volatility against its major pairings, as a result of outstanding questions on the UK’s relationship with the EU and indecision surrounding a UK interest rate hike, combined with another possible increase in interest rates in the US.
Given the major political events on the horizon, we may be looking at a volatile sterling in the New Year – contact your trader now to discuss suitable currency purchasing strategies.