Qualified advisers answering your
Financial Questions
call 0800 092 1245

Is the recovery in the pound to be short lived?

As the pound this week posted its largest weekly gain since 1999 and its largest five day advance against the dollar since 1989 some experts are warning against undue short to medium-term optimism. While some may see this short-term bounce as the start of a recovery from a very oversold position, there are suggestions that the move is something of a technical adjustment after the Bank of England reduced rates by less than expected. So what next?

The problem for currency markets is the fact that neither the Bank of England nor the UK government has suggested that the UK base rate cycle has bottomed out leaving further scope for more reductions. If this is the case, then we will see the UK currency come under serious pressure as the return on the pound moves closer to 0%. Some believe that the last few weeks have seen the creation of a substantially oversold position for the currency against the likes of the euro and the dollar and many traders have been closing their positions to crystallise their profits.

The UK currency appears to be the last thing on the minds of the UK government and the Bank of England at present as they are more interested in refloating and replenishing an ailing economy and ensuring a firm base for the future.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details