Those following the Pound’s performance recently will be aware that it’s been coming under some pressure recently, especially against the US Dollar.
The headline from yesterday’s trading session was that Sterling has hit a two-month low against the US Dollar, and this has coincided with a new headache for the UK government.
It was announced in the early hours of this morning that Amber Rudd, the Foreign Secretary at the time has decided to step down owing to external pressures relating to the ‘Windrush Scandal’ as it’s being labelled. It turns out that she wasn’t entirely truthful during last week’s investigations and now Sajid Javid will step into the role.
This latest controversy hasn’t done the Pound any benefits which has added to the weakening of the Pounds value. Last week the headlines towards the end of the week consisted of how the UK economy is slowing and that GDP data had dropped off to a 5-year low. Many expect this to be down to the poor weather faced by the UK after the Beast from the East wreaked havoc.
The poor GDP figures resulted in a weakening to Sterling’s value which has continued this week so far due to the political update this morning.
The slower economy is also likely to weaken the chances of a rate hike from the Bank of England, which is another reason for the Pound losing value.
In terms of economic data for the rest of this week, there will be some forward looking indicators in the form of Purchasing Managers Index (PMI) figures for the Construction sector and also the Services sector which is arguably the most important.
The data will be released at 9.30am tomorrow and also Thursday so expect to see some movement potentially if the data deviates from the expected figure.