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July 2016

Sterling skids to a new 31-year low

Published: Tuesday 05 July 2016

Sterling had a terrible day today in the currency markets.  It fell to its lowest level in 31 years against USD, exceeding the lows reached on 24th June – the day Britain voted to leave EU.  It fell to 1.1703 vs Euro, its lowest since 2013.  This comes on the back of a disappointing report on UK services sector.  UK Services PMI came out worse than expected at 52.3, from forecast 53.1.  This is the lowest since April and could perhaps reflect some of the effects of Brexit. The falling pound today has been linked to a falling in investor confidence.  Standard Life Investments earlier suspended trading in its GBP2.9billion fund this week.
 
Carney, giving a speech in London, out-layed his concerns that we’re now starting to see the effects of Brexit on the Pound yet the weaker currency should help exporters.  Carney said the central bank’s post-Brexit plan is going to plan but cautioned that it’ll be very tough to offset the volatility triggered by the referendum.
 
It looks like until we have some sort of stability in government and economic data exceeds its target levels, the pound will continue its downwards trend.  
 
Latest FX news by Joe De Berniere