Foreign Exchange Daily Market Update 21/12/2016

Wed, December 21, 2016

Pound Falls & UK Price Hikes Expected

U.K. companies are more inclined to increase prices next year rather than swallow the impact of higher import costs caused by the Brexit-induced drop in the pound.

Around 80% of firms surveyed expect prices to increase by more than 1% next year, based on information from a network of central bank representatives across Britain. That compares with about half saying they had seen prices climb over the past year.

The expected rise in inflation is largely due to the pound, which has plunged 17% since the U.K. voted to remove itself from the EU. Higher prices will crumble Britons’ real incomes and hurt consumer spending next year, and a too-strong acceleration in inflation could push the BOE to respond.

The Pound fell 0.2% against the Dollar to 1.2341. The currency has declined 2.5% since the Fed increased interest rates and signalled a faster path of rate hikes in 2017. Sterling fell 0.3% against the Euro to 1.1868.

Data to look out for today.

Not Much Data Out Today

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 

Data Releases