Blog

Sterling/Euro – 8 month low

• Posted by currencies in Bank of England, Brexit, Currency, Dollar, Economy, EUR, GBP, Sterling, UK, Uncategorised
• July 21, 2017
• No Comments

Sterling skidded to an eight-month low against the euro, trading close to 90 pence after the head of the European Central Bank said possible changes to policy would be discussed in the autumn.

Though Mario Draghi said no date had been set for discussing any changes to the programme and that ECB rate-setters had been unanimous in their decision not to change their guidance and monetary policy, investors reckoned discussions in the autumn would lead to monetary tightening next year.

The euro jumped as much as 1.5 percent against the pound EURGBP=D3, touching 89.765 pence, its strongest since early November.

Against the dollar, sterling dipped back below $1.30 on concern UK ministers are prepared to walk away from Brexit talks without a deal. That mood of uncertainty outweighed a slightly better-than-expected batch of retail sales numbers.

That briefly helped the pound recover some ground from a fall after Trade Minister Liam Fox said in a radio interview the country could get by without a Brexit trade deal – an outcome many economists have warned could cripple business activity.