The Pound touched year lows against the Dollar on Tuesday, trading below $1.2490. Sterling’s fall is explained by ongoing Brexit uncertainty and a slowdown in economic activity.
Construction and manufacturing activity contracted in June and a survey of economists point to a shrinking of the UK economy in Q2 2019, something that is happening for the first time since 2012. It is therefore very likely that the Bank of England will follow other major central banks and embark on a new programme of stimulus, which is likely to begin with a rate cut. The stars are aligned, and we should expect some rough times ahead, for the British Pound.
