Pound Slumping Before Interest Rate Decision This Week

The Pound has fallen yet further against the Euro since yesterday with new data indicating that the recovery in the UK is still patchy in the run up to this week’s UK interest rate decision on Thursday. House prices continued to fall and retail sales continued to drop throughout February. This kind of data is unlikely to make the Bank of England policy makers look much more favorably upon the prospect of an early interest rate rise when they discuss the issue in Thursday’s meeting. Initial figures suggest that the economy is under-prepared to withstand a rate hike. Several UK policy members are known for erring on the side of caution in stark contrast to the hawkish rhetoric that is coming from Europe suggesting a rate rise will come in the near future in the Euro zone. If you have Euros to transfer back into Sterling, it is worth speaking to your broker about catching the current rates.

Pound Sterling – UK Markets

The Pound has slumped further against the Euro and the Dollar in the last twenty four hours with new data not helping to bring much optimism to the state of the recovery. Although today’s survey from the Royal Institute of Chartered Surveyors (RICS) has shown that house prices fell at their slowest pace since last July, the prices still fell once more none the less. The reading of the RICS survey moved up to – 26 from -31. This reflects a gap of 26 percent between the proportion of surveyors that saw prices falling with those that saw prices rising. Increasing speculation that the European Central Bank will raise interest rates sooner than in the UK is also continuing to aggregate further Sterling’s drop against the Euro.

US Dollar – US Markets

The US Dollar gained on the Euro and Pound over the last twenty four hours although it also registered losses against some other currencies such as the Japanese Yen. The movement from lows against the Euro can be attributed to speculation in Europe about the state of Greek debt following Moody’s downgrade yesterday. With the US itself, not part of the interest rate speculation running rife between Europe and the UK, the currency is somewhat caught in the middle of the cross fire. Jobless claims on Thursday and retail sales on Friday are likely to see the US and the Dollar move back in the spotlight towards the end of the week.

Euro – European Markets

The Euro may potentially come up against uncertainty. Whilst last week’s discussions on a potential interest rate rise from the European Central Bank is still pushing the Euro up against the Pound, further doubts over the state of debt in some nations has caused a drop against some other major currencies. Not only did ratings agency Moody’s downgrade Greece yesterday – but issues of sovereign debt and whether there is any chance for nations to default on debts – or at the very least ask for a restructure of the debt – are beginning to circulate in the financial press. The Greek Ministry yesterday said that the downgrade was completely unjustified.

Other Currencies – Highlights

The Canadian Dollar has strengthened against most other currencies once again as the price of crude oil, which is the nation’s biggest export, has reached new highs as violence in Libya bolsters demand that there may be disruption to supplies. The Canadian Dollar has gained 0.13 percent on Sterling over the past seven days.