Pound Strengthens Whilst US Dollar Takes a FallNovember 13, 2015 12:32 pm
The Pound has had a volatile week but has continued to steadily gain strength against the Euro. We’ve ended the week with a rise to a little above 1.41 after the head of the ECD, Mario Draghi, warned that price inflation, a key measure of economic health, was slowing which caused the GBP to gain against the EUR.
The Bank of England is delaying any rise in interest rates until at least the end of 2016. Many argue that this will cause the Pound to suffer further losses against major currencies such as the USD. The rates have remained low for the last 6 years.
Although the Euro has continued to remain weak, it actually traded at its highest level in a week on Thursday. This came after US Federal Reserve Chairwoman, Janet Yellen, chose not to discuss the Central Bank’s interest rate outlook, making traders nervous. The market wants them to talk about an interest rate hike which is not completely off the table in December, but it has yet to be enforced.
The good news for the Eurozone is that if their currency remains weak, their products will be cheaper to buy. Over time, this should start to increase the economy and assist with growth as countries will be keen to keep purchasing products from Europe.
The Sterling started off weak against the US Dollar this week after positive US non-farm payroll data was released. We expected to hear news of an interest hike before the end of 2015 but this issue was side-stepped by the US this week. If the interest rates do increase this year, we can expect the Dollar to start the New Year in an even stronger position.
Tags: dollar weakens, pounds to dollars, sell us dollars
Categorised in: News
This post was written by Kayleigh Driscoll