Sterling and euro falling against dollar

Story link: Sterling and euro falling against dollar

Sterling lost value to the dollar as it stood at $1.7504 on Tuesday, its lowest level in over a year.

The latest retreat comes in anticipation of a 2-day meeting of the Bank of England which begins on Wednesday.

Although the UK is not expected to cut interest rates during this meeting, a rate cut could come next month.

The euro fell in value as well on Tuesday, to its lowest point in relation to the US dollar in fourteen months as it reached $1.1869 against the greenback.

One factor in the euro’s continuing weakness is the continuing speculation that the eurozone could break up, or that a few nations might decide to leave.

A second factor in the weakness of both the euro and sterling is the contrast between last week’s ninth consecutive hike in US interest rates by the Federal Reserve and talk in the UK and the eurozone concerning possible interest rate cuts as a method to strengthen European economies.

The European parliament has added to pressure on the European Central Bank to cut interest rates there by turning down a report that praised the ECB’s monetary policy by saying that central bank is too focused on stability while not taking into consideration the importance of economic growth.

The ECB has not raised interest rates in two years.