Foreign Exchange Daily Market Update 06/07/2016

Wed, July 06, 2016

Pound falls below 1.28 in the aftermath of Bretxit  

The Pound sank to a fresh 31-year low as the fallout from Britain’s vote to leave the European Union continued to echo through the financial markets.

Sterling dropped through $1.28 this morning, which is more than 4 U.S. cents below levels reached the day after the U.K.’s referendum.  

The pound has plummeted amid mounting evidence the Brexit vote is hurting confidence in the U.K. economy. M&G Investments suspended a 4.4 billion-pound ($5.7 billion) real-estate fund on Tuesday, following on the heels of Aviva Investors and Standard Life Investments after a flurry of redemption requests. With the real estate tremors echoing the last financial crisis, there is increasing concern a failure to control the aftershocks from the referendum will propel the nation into a recession.

Sterling has fallen 0.7% to $1.2931 against the Dollar this morning, after reaching $1.2798, the lowest since 1985. The Euro fell 0.1% to €1.1769 after touching €1.1610.

The pound has been among the biggest losers from Britain’s decision to leave the EU, and almost all the analysts who have changed their forecasts since the referendum are expecting the currency to remain weak. We could see sterling end the year at or below $1.30, with some saying it could even go as low as $1.16.

While a weaker currency is a good for exporters, which may cushion some of the effect of Brexit on the economy, sterling’s continued slide may be a signal of a loss of confidence in the U.K. since the vote.  

Data to look out today.   

15:00 USD Non- Manufacturing Composite expected to come better.

CURRENCY PAYMENTS MADE SIMPLE  

PRESS RELEASE

KBRFX was mentioned in the Essex Chronicle for the top 100 companies by turnover in Essex http://www.essexchronicle.co.uk/100-Essex-businesses-revealed-annual-survey/story-25140555-detail/story.html

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