Caxton FX: Outlook for sterling may get brighter

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Caxton FX: Outlook for sterling may get brighter

Fri 17th Apr 2009

Caxton FX, a foreign exchange services provider, has claimed that the outlook for the UK pound may brighten in the not-too-distant future.

Earlier this year, the sterling was severely weakened against key currencies such as the dollar and the euro as the UK economy reeled from a series of shocks, but Caxton predicts that there may be brighter times ahead.

It explained that the dollar and the euro are likely to weaken in the future, as the European Central Bank cuts interest rates and risk appetites return to the markets.

Alex Dunn, Senior Analyst at CaxtonFX, said: "Our view is that the UK recession may be bottoming out and the Bank of England has reached the end of the rate cutting cycle."

"As a result we are now looking for sterling to rise in the medium term even if next week is volatile."

Earlier this year, some airport bureaus de change were charging travellers more than one pound for every euro they bought.

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