Sterling fell to the lowest level against the US dollar for 14 months yesterday, hitting $1.5270/£1 against the US currency after the Bank of England surprised investors by announcing an additional £75bn of Quantitative Easing to help jump start economic growth. The scale of the additional QE was unexpected and highlighted the precarious state of the UK’s recovery as slowing global growth, tax hikes and spending cuts take effect. The flood of increased monetary supply is clearly negative for sterling, with many now expecting sterling to drop into the $1.40’s against the US dollar. Elsewhere this week, UK growth for the 2nd Quarter of this year was downgraded to a mere %. Out today there is wholesale price inflation, so ensure you protect yourself and speak to one of the team today.

In the euro zone, the euro held onto marginal gains overnight as the European Central Bank announced new lending measures to provide funding for banks well into next year. Whilst many investors were disappointed that the ECB didn’t cut interest rates, stock markets rallied. There is still a large amount of systemic risk in the region and the risk of large exchange rate movements remains. Get in touch for an exchange rate now.

In the USA, the US dollar made gains against sterling as investors sold the pound on the news over further Quantitative Easing. Many analysts are wary of growing friction between the USA and China over China’s currency peg against the US dollar. US lawmakers are set to bring in legislation to tackle what they feel is hugely undervalued Chinese yuan. Out today are non-farm payroll figures which can cause large amounts of volatility so call in now for a live price.

Elsewhere, Australia’s parliament looks set to join the USA in calling for an enquiry into Asian currency manipulation. Echoing the concerns felt in the USA, the Chinese are coming under pressure for keeping the yuan artificially low to ensure Chinese exports remain cheap. Call in now for a live exchange rate.

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