Another fall for Sterling | Euro trading at great levels against Sterling

The British prime minister Theresa May has set out a timeline for the UK’s withdrawal from the European Union (EU) – a story that has dominated the currency markets in the last day.
 
Meanwhile, the euro is trading well against the pound but has lost some value against the US dollar. Investors are awaiting Manufacturing PMI data for both the pound and the dollar, which could potentially see rises to both currencies.
 
Elsewhere, the Chinese yuan has been added to the International Monetary Fund’s basket of reserve currencies.
 
Another fall for Sterling
 
The pound has fallen since the prime minister said Britain would trigger Article 50 – the process of officially leaving the EU – by the end of March 2017. Sterling lost value against the US dollar, the euro and the Japanese yen since Ms May made the announcement.
 
There is also concern around the Bank of England (BoE) potentially introducing further stimulus to boost the economy. There have been suggestions that interest rates will be cut further in the coming months.
 
Investors will be awaiting the release of today’s Manufacturing PMI data. Analysts have said that it may be enough to see Sterling rise slightly.
 
Euro trading at great levels against Sterling
 
The euro is capitalising on the pound’s drop in value. It is trading against Sterling at levels close to a three-year best.
 
The euro has also dropped slightly in value against the US dollar. It is thought that this is an effect of the concerns around the Deutsche Bank crisis, which has seen US authorities impose a huge fine on the bank.
 
However, worries have eased slightly after it was reported that the bank may be settling the fine at a lower sum than originally asked for.
 
No change in value for the US dollar
 
The US dollar has not seen a great change in value in the last few days and analysts expect it to remain at these levels.
 
Manufacturing PMI data for the US is predicted to be strong enough to either keep the dollar where it currently is or to perhaps give it a slight boost.
 
Analysts have said that if manufacturing figures are positive, it may increase the chance of an interest rate rise by the Federal Reserve. This would then give the dollar a boost in trading against other currencies.
 
Eventful last few days for the Chinese yuan
 
The Chinese yuan has had an eventful last few days, with International Monetary Fund (IMF) adding it to its basket of reserve currencies. It joins the pound, the euro, the US dollar and the Japanese yen as special currencies that the IMF can use to give countries loans.
 
Analysts expect the Chinese authorities to now keep the yuan stable in an attempt to maintain a positive image of the currency.
 
It follows a decision last year by China to devalue its currency. This has led to the yuan falling to almost six-year lows.