Sterling continues to struggle
By David Lamb – Head of Treasury Services
A relatively quiet week in the markets with few data releases of note. The BoE interest rate decision on Thursday will see the main event risk of the week. Rates are almost certainly to be kept at 0.5% but attention will focus on whether they expand their asset buying program. If they do then it is likely that sterling will come under further pressure.
While sterling continues to struggle, there are signs that we are seeing signs of recovery in the UK economy. Manufacturing and investor confidence data both surprised on the upside this week and this may auger well for stronger mid-term performance for the embattled pound.
The commodity currencies continue to perform well as sterling as hit multi year lows against the NZD and AUD. They have no doubt been buoyed by the improvement in equity markets and higher commodity prices. However there is now a belief that they are over-priced and correction looks increasingly possible in the weeks ahead.
For more information please contact David Lamb, Head of Treasury Services at No1 Currency on 0131 561 8416
