Published: 22 Sep at 10 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Japan,
The Pound (GBP) continued to fall against most of the majors yesterday amid continuing â€˜Brexitâ€™ fears. Sterling came under pressure amid concerns that UK growth could be hit by a perceived â€˜hard Brexitâ€™, as the government appears to be indicating that it will pursue tighter immigration controls over access to the single market.
Further pressure has been placed on Sterling as a survey released by the Federation of Small Businesses (FSB) suggested that the outlook among small and medium sized business is decidedly pessimistic, with confidence falling due to the uncertainty over â€˜Brexitâ€™.
The Pound to Euro exchange rate continues to weaken despite news that public spending in August was lower than the predicted Â£10.4b at Â£10.1b.
Exacerbating the problems with GBP/EUR is news that London could lose its status as the de facto leader of European trading as a result of â€˜Brexitâ€™ as European business leaders continue to rebuff claims by London banks that the continent doesnâ€™t have the capacity or skills to manage without the city.
The Federal Reserve has voted to hold out against an interest rate hike during its September meeting yesterday, but was hawkish towards a rate increase later on in the year.
Fed Chairwoman Janet Yellen was defiant against calls to tighten monetary policy despite the dissent of three voters in the Federal Open Market Committee. During a press conference on Wednesday Yellen stated that, â€˜The economy has a little more room to run than might have been previously thoughtâ€™.
Most markets now forecast that the Fed will hike interest rates by 0.25 to 0.75% in December, meaning there will be only one rate hike in 2016 instead of the four projected at the beginning of the year.
As predicted both the Pound and the Euro made gains on the back of the Fed announcement as the Dollar fell.
The Pound continued to slide by around a cent against the Canadian Dollar (CAD) as the â€˜Loonieâ€™ saw traders seeking an alternative to the weakened US Dollar. CAD gained further strength thanks to a slight boom in oil prices.
Sterling dropped to a new monthly low against the Australian Dollar (AUD) yesterday as investors sought out riskier currencies in the wake of the Fed announcement. The changes to the Bank of Japanâ€™s (BoJ) monetary policy also had a positive effect on the commodity based â€˜Aussieâ€™.
The GBP/NZD exchange rate recovered slightly yesterday after falling to an all-time low, thanks to positive prices in the New Zealand Dairy Auction and increased demand due to the Fedâ€™s decision to maintain current interest rates .
As of Thursday, 22nd September 2016, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1667, GBP USD exchange rate was 1.3079, GBP AUD exchange rate was 1.71, GBP NZD exchange rate was 1.789, GBP CAD exchange rate was 1.7061, and GBP JPY exchange rate was 131.8652.