Last week was very rocky for the GBP, with a sharp dip in sterling rates before the BoE’s announcement which was then followed by a surge after the decision to keep interest rates steady was announced.
With the decision from the Bank of England (BoE) holding rates, the GBP restored its previously held gains and pushed forward heading into this week.
With that being said, the GBP was back under pressure again as EU-UK Brexit negotiations restarted. Meanwhile, the US dollar built strength to start the week after the ISM manufacturing index surprised the market by jumping up to 50.9 from 47.8 in December, the highest figure since July, spelling more trouble for the pound.
With Brexit showing no signs of going away soon and constantly providing a headache for investors, it looks like it could have an influential effect on the GBP’s fortunes for quite some time. Negotiations between the EU and the UK began this week, with both parties laying out their intentions before starting the talks. Boris Johnson has been firm in his stance that the UK will not abide by any EU laws, causing friction across the continent and unrest amongst investors whose profits have waned due to the climate of uncertainty this has created.
With this stance bringing back fears of a no deal Brexit, it looks like the GBP may continue to suffer heading into next week. Based on previous data showing the drop in value from the last time a no-deal Brexit was touted as a possibility, investors could steer well clear of a repeat if they are to regain any sort of consistency.
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I decided to use this company after reading many blogs by Daniel Wright on the forecast of Sterling. He always seemed to get his predictions right and also seemed to have not only very good knowledge but a passion for the industry he is in. Daniel was not only informative but patient and gave us options on the lead up to our currency exchange.
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