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Daily Forecast: 20th Apr 2018
Sterling exchange rates fell off a cliff edge this week as weak inflation figures led to investors altering their expectations for a rate hike from the Bank of England (BoE) next month. Fuel was added to that fire yesterday morning with a drop in UK Retail Sales. What seems like one of the final nails in the May Interest rate-hike coffin, the BoE governor last night said in an interview with the BBC, that a rate hike was still likely to happen this year but warned that it might not come next month. The market has now gone from 80% chance of a May rate hike to 50%!
The UK government suffered a defeat on Wednesday in the House of Lords, where the peers passed an amendment seeking to retain the option for EU customs union membership. The vote is not considered to be binding, but it may be a sign of difficulties ahead. The government is looking at solutions to avoid a hard border in Northern Ireland while also leaving the customs union. More reports have come out today suggesting that the EU have rejected all of the UK’s solutions to the Northern Ireland boarder.
Next week will see plenty of data from the UK and Euro zone along with the ECB’s Interest Rate meeting. More on that next week.
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The contents of this report are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The author(s) cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.