Pressure piles on the pound

Niki Sehmbi8th November 2021

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Good morning,

The pound has continued losing ground in the new week, after the sudden drop post interest rate decision by the Bank of England last week. Markets had anticipated for an interest rate hike in the UK following comments from Governor Andrew Bailey throughout the month, where he signalled for changes to policy be made to slow inflation towards the 2% target rate. GBP-EUR is now trading over 2.1% lower from the October yearly high at 1.1901.

Brexit has also found its way into the headlines once again, putting more downside pressure on to the pound at the start of the week. Reports are mounting that the UK are preparing to trigger Article 16 of the Northern Ireland Protocol. In doing so, relationships will be damaged with analysts predicting the UK to be the more vulnerable of the two sides.

There is little in the way to guide prices today, apart from Andrew Bailey speaking at 5pm GMT. For the pound the next key data release will be on Thursday as GDP data is released early in the morning. Markets will be guided by any news headlines in regards to Brexit and any new developments.

Have a great day.

Author: Jack Nicholls, Senior Relationship Manager.

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