Published: 14 May at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA,
The British Pound has dropped to a two-week low against the US Dollar due to speculation that investors will offload their holdings of the currency ahead of the Bank of the England’s inflation forecast release tomorrow.
Against the Euro, Sterling slumped to its weakest level in a month versus the Euro despite data released earlier in the day showed that UK house prices climbed to their highest levels since June 2010.
“Going into the inflation report tomorrow you’ve seen some people taking off some of the long cable positions,” said Peter Kinsella, a currency strategist at Commerzbank AG referring to bets the pound will rise against the dollar. “People who are looking at price action would look at the failure to breach $1.56 over the past two weeks as being a sign that upside in cable from here is rather capped.”
The Pound was also weighed down by comments made by UK Prime Minister David Cameron yesterday. The PM offered to support a bill authorizing a referendum on the UK’s membership of the European Union rising investor concerns over the increase in the amount of political risk in the nation.
“Political risk is undoubtedly rising in the U.K.,” said an economist at Standard Bank Plc in London. “There’s the vote on Scottish independence next year, which will definitely go ahead, and there’s a possible U.K. referendum on EU membership. It could mean a rocky few years but, in our view, neither will significantly undermine the Pound.”
As of Tuesday, 14th May 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1767, GBP USD exchange rate was 1.5219,