Sterling exchange rates continue to slide?
The value of the Pound has been undermined so far in 2016 due to the uncertainty surrounding the forthcoming EU referendum, leaving the Pound outperformed by most major currencies since the turn of the year. A weaker GDP forecast, dovish comments from the Bank of England along with a widening trade gap between the UK and the rest of the world have taken their toll on Sterling, and anyone looking to sell Sterling may wish to do so sooner rather than later as the UK’s continued membership within the EU is at threat to the Pound’s strength and the global downturn and European bank stress apply pressure to the ‘open economy’ of the UK.
Personally I cannot see Sterling improving in the short term future as the currency is being weighed down by both problems at home and abroad, although should we see an upturn in global markets I believe the Pound will receive that news positively and we could see a return to levels we saw at the end of last year.
In other news… Yen Surges as US Dollar wanes
Yesterday we saw financial markets dominate the headlines once again as fears over the global downturn created further volatility in equity markets and foreign exchange rates. Arguably the most notable movements yesterday occurred over in Japan as the Nikkei plunged 5% as the US Dollar slid to 15-month low versus the Japanese Yen. This has been the greenback’s worst week against the Japanese Yen since 2008 as concern within the banking systems coupled with fears over the global economic slowdown have caused investors to seek safe havens, with the Yen traditionally being considered safe territory along with the Swiss Franc and Gold for example, with the precious metal strengthening by 5% yesterday and hit a one year high.