Good morning,

In what seems to be a never-ending sense of déjà vu, GBP once again posted new lows against both the USD and EUR.

Upon the opening of the Asian trading session, on Sunday at 10 pm GMT, the pound plummeted to lows of 1.0638 on the EUR, levels not seen since 05/10/2009 – yes you are reading that correctly, 10-year lows. Against the dollar, the dip extended to lows not tested since 16/02/2017, from two years to two and a half year lows. As far as what caused the heavy selling on market open, essentially nothing new: a shrinking economy, no-deal pressure and general election fears all point towards sustained pound suppression, which currently, is in its 14th week of losses.

With regards to what to do next with GBP, many of my sterling holding clients have asked “How low will it go?” to which I usually answer with the question of “Why are you letting it fall lower against you?”

Whilst it is tempting to try to play the market and hope for a rate rebound back to the seeming glorious days of 1.10 – the fact of the matter is, however, hoping for a recovery in sterling has never been a worse strategy.

On top of the unholy trinity mentioned above, a cluster of data releases at 9.30am GMT Tuesday, Wednesday and Thursday this week could all have the potential to push the pound towards the 1.0560 range, which would be 10 and a half year lows; beyond that is the lowest the pound has ever been against the single currency, 1.0208. After that, the question becomes, technically speaking, impossible to answer – as the pound would enter uncharted territory, with no further historical data available to consult.

Off a cliff in every sense of the term.

If you are currently considering a GBP transfer, there has never been a more critical time to get in touch with your account manager to discuss the affordability of your exchange. There are multiple strategies that can be employed to ensure we make the best of the falling market, but it is critical you reach out to get the process started as soon as possible.

Have a great week ahead.

Author: Joshua Haden-Jones, Private Dealing Account Manager.