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 Englandâ€™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.
â€śGoing into the inflation report tomorrow youâ€™ve seen some people taking off some of the long cable positions,â€ť said Peter Kinsella, a currency strategist at Commerzbank AG referring to bets the pound will rise against the dollar. â€śPeople 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.â€ť
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 UKâ€™s membership of the European Union rising investor concerns over the increase in the amount of political risk in the nation.
â€śPolitical risk is undoubtedly rising in the U.K.,â€ť said an economist at Standard Bank Plc in London. â€śThereâ€™s the vote on Scottish independence next year, which will definitely go ahead, and thereâ€™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.â€ť
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,