Sterling exchange rates have taken another hit today. It broke through the range that it has been stuck in for the last month. The GBP/EUR exchange rates are nearing the lowest levels they have ever been at since November 8th, when the elections in the U.S. concluded.
If you sell currency to buy Pounds, then this may be the time to do it. If you’re looking to buy foreign currency sometime in the future, then you will probably be a bit concerned. This is because of the level of resistance being shown.
The markets have listened to David Broadbent, who is an MPC member at the Bank of England. People were hoping that he would provide his thoughts on interest rates hikes, but he spoke negatively about the economy. He also spoke about a sell off for the Pound.
At the moment, the markets are paying close attention to interest rates and people are hoping that the Sterling will recover. People will need to hear some positive comments about interest rates hikes, which many thought would happen soon. However, the expectation of an increase in interest rates were brought down after today’s comments.
After what happen with the election and the uncertainty that the election caused lead people to think the Pound would recover. That has yet to be the case and so far it has been one negative sign after one negative sign, but it is worth pointing out that the economy hasn’t hit rock bottom. It just isn’t doing as good as what people expected it to be doing.
Consumer confidence and wage growth are linked together, and if inflation levels are higher than wage growth, then this would mean consumers would probably tighten their belts. The report on average wage growth will be released shortly. As of now, the growth sits at 1.7% and many people speculate it will rise to 1.9%, and if it doesn’t, there’s a good chance the Sterling will become weaker.
If the Pound is going to show improvement, then a stable government is needed and not a government that is going to be threatening the position of the PM on a constant basis. Currencies generally become weaker when there is political uncertainty and currently that is what we are watching with the Sterling Pound. Not only that, but a stable government is needed for Brexit negotiations to proceed. These are some of the most important talks that the country will have ever had to take part in.
Major economists and analysts have warned that the Pound could become much weaker due to Brexit. They have been predicting this for a long time. They also have been warning that this could impact the economy.