Pound Sterling Forecast to fall further vs the Euro hitting 1.30? (Tom Holian)

Sterling has continued to fall against the Euro this morning as confidence in the Pound keeps dropping.

The Bank of England confirmed again yesterday that it will keep interest rates on hold which they have done since 2009.

In my opinion as inflation has struggled in the UK and is likely to carry on owing to the huge fall in oil prices this will keep inflation low and therefore it will be difficult for the central bank to increase interest rates in the future.

Indeed, low prices are having negative effects on the North Sea oil industry which is a big revenue stream for the British economy.

There are increasing fears of a Brexit coming and if we look at two big political events in the UK over the last 2 years including both the Scottish Referendum and the UK general election Sterling fell by as much as 5 cents in the run up to both announcements.

Recent UK economic data including Industrial and Manufacturing data has come out at the lowest level in 4 years so things are not looking very positive for the UK at the moment.

Since the start of December Sterling Euro exchange rates have fallen by 12 cents and if economic data continues to get worse we could see rates fall even further.

In order to remove this risk when buying Euros you may wish to look at purchasing a Forward Contract which allows you to fix an exchange rate for a future date for a small deposit.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

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