UK Political Drama Inspires Sterling Volatility
Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…
Latest currency news
The past couple of weeks saw a volatile Pound react to a flurry of UK political news, with the GBP/EUR exchange rate trading between 1.09 and 1.11 and EUR/GBP retreating to 0.89.
Meanwhile, GBP/USD climbed from 1.22 to 1.23 after striking a three-year low of 1.19 and EUR/USD slipped from 1.11 to 1.10.
What’s been happening?
The pound put on the most dramatic performance over the last couple of weeks, initially slumping as Prime Minister Boris Johnson moved to prorogue parliament in September, then roaring back to life as a series of blows derailed Johnson’s plans and decreased the odds of a no-deal Brexit.
Meanwhile, the Euro struggled to find support as an increasingly gloomy outlook for the Eurozone economy limited the appeal of the single currency.
Finally, the US Dollar faced a sell-off in September, with investors responding to worrying data which hinted at the prospect of a US recession.
What do you need to look out for?
UK political news will act as the main catalyst for Pound movement in the coming weeks, with recent events suggesting a general election may now be inevitable.
Meanwhile, the Euro should maintain a downside bias as the European Central Bank looks set to announce a ‘substantial’ stimulus package this month.
For USD investors the focus will be on the Federal Reserve which is widely expected to deliver another rate cut this month, potentially exerting pressure on the US Dollar.
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