24th February 2016
Sterling fell to a fresh 7-year low against the Dollar on Wednesday as polls remained tight over the outcome of June’s EU referendum.
The pound was at 1.3918 against the dollar at the time of writing. Andy Scott, economist at HiFX, the currency specialist, says the 1.4 mark “psychologically important” threshold for sterling to fall beneath.
Scott says: “With investor sentiment souring again after oil prices retraced gains made at the beginning of the week, Sterling once again came under pressure due to the risk of a ‘Brexit’. Risks now exist for GBP/USD to test towards 1.35, the low we saw after the financial crisis in 2009 and a historically important level.
“We’re continuing to highlight the risks to clients of this referendum which, if results in the UK voting to leave the EU, could see a further, sharp depreciation in Sterling of 10-15%. This recent movement once again highlights the need for corporates to undertake some form of hedging, to avoid being caught out by significant swings that can eat away at profit margins or even lead to losses.”