|Current market levels|
Chris Saint, Senior Analyst, HL Currency Service
"Sterling has jumped to its best level against the euro and US dollar for almost four-weeks this afternoon, reaching highs of US$1.2492 and €1.1285 soon after the Bank of England’s policy announcement. The Bank’s rate-setting committee voted 9-0 to keep interest rates on hold at 0.25%. Crucially, higher inflation and growth forecasts for 2017 mean the Bank has dropped its easing bias and now acknowledges that interest rates could move either way from here. The pound had already surged higher after the High Court ruled this morning that the UK government cannot begin the formal Brexit process without a parliamentary vote. This puts the intended timetable of triggering Article 50 by the end of next March under some doubt. More good news for sterling came in the form of a strong UK services PMI reading, which helped take October’s composite measure of overall activity growth to its highest level since January."
Nicholas Hyett, Equity Analyst, Hargreaves Lansdown:
"Today’s currency shifts are unravelling some of the movements we’ve been seeing since the referendum. RBS is a beneficiary, up 5.6%, as sterling strength helps assuage fears about the size of dollar denominated US conduct fines.
Dixons Carphone shares are also enjoying a currency charged boost, up 5%. Electronic goods are almost universally imported, so lower sterling threatens to dramatically increase the cost to UK consumers. Investors have been worried that would put many off spending"
The other side of the currency coin is the falling miners. Some disappointing results from Randgold this morning mean it is topping the fallers, down 7%, but other precious metal miners are joining the drop. Their dollar denominated earnings are worth less now, while the reduced chance of hard Brexit has also hit the price of gold and silver.”
NOTES TO EDITORS
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