Currencies like sterling
and the US dollar faced pressure this week due to both unfavourable domestic data and global economic conditions. The euro was an exception, however, as it benefitted from weaknesses from the other two currencies.
Currency markets are still being driven by sentiment, which can change in an instant, depending on the circumstances.
Sterling has come under serious pressure this week, losing value across the board as fresh concerns emerged that the UK could vote to leave the EU in June’s referendum.
With Purchasing Managers’ Index (PMI) data from the construction and services industries failing to show strong growth at the start to the week, sterling found itself largely at the mercy of investor sentiment.
Added to these were a number of opinion polls suggesting a preference among voters to leave the EU.
Sterling found itself falling to its lowest level since June 2014 against the euro, while also falling to a five-week low versus the US dollar. When compared to a basket of currencies, sterling currently sits at a November 2013 low, and still remains vulnerable to further downward pressure