Foreign Exchange markets
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It seems that Sterling is proving extremely resilient in the Foreign Exchange markets. There was a little blip to the low 1.19s last week only to finish near the 1.21 mark on Friday. UK Economic figures have been rather muted of late. The Balance of payments widened, consumer confidence slowed and as the dark nights approach, negative talk has been the norm. It does not however seem to have a bearing impact on Sterling, especially against the EURO.
It’s true that the Eurozone will still have its own share of bad economic news, but the only thing on the horizon that could weaken the pound is if the Bank of England introduces further quantitative easing to stimulate the economy. This may well be needed as pressure again comes on the economic situation in the UK. Therefore Sterling at these levels is still good value. It does not seem to want to break out on the topside and head towards 1.25 and also has struggled to go down through 1.19.
The last quarter of the year will be difficult for the pound, with the possibility of negative economic news and also the Quantitative easing issue. If we do see the Pound through 1.19 against the Euro then it’s possible its short term retracement will be as much as 1.15 followed by 1.10. Yes there are more negative vibes so it’s important to keep current levels in mind. These may prove excellent value in a few months!!
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Anticipated range this week STG/EUR 1.1900 to 1.2300
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Bank of England leaves rates unchanged.
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USD could weaken against Pound and Euro.
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Asset purchase scheme remains the same.
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Published in: Money