020 7898 0500
The data suggests that consumers are being more careful
Sterling climbed close to its best level for over two weeks against the euro in early trading this morning as GBP/EUR continues a slow but unsteady recovery from the precipitate falls at the start of the month.
It is being buffeted by a set of downbeat consumer and business confidence readings. Yesterday the CBI’s business confidence index showed continuing pessimism in the UK’s manufacturing sector amidst lower demand from both home and abroad.
Overnight we had the view from consumers, and this was also negative. The GfK Consumer Confidence Index fell to minus 25 in April, it’s lowest for 18 months.
However, we have just had a reading for UK retail sales for March, and while they declined from the previous month, there was still growth of 0.4% which was above expectations.
There was little movement for sterling against the US dollar, but GBP/USD remains close to its best for three years and 6.5% stronger than this time last year.
In business news, the Chinese government said that trade talks with the US would only start if all tariffs were removed first. They appear to be calling President Trump’s bluff, as the US side has suggested that talks had already progressed. ‘Fake news’, said China’s spokesperson.
The UK chancellor Rachel Reeves is in Washington DC and both she and Bank of England governor Andrew Bailey said yesterday that they “understood” the issues that Trump is attempting to address with tariffs – the great imbalance of global trade with China. Reeves said she was “working flat out” to achieve a trade deal with the US.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Business Account manager on 020 3918 7255 to get started.
GBP: Pound picks up
The pound had a positive day, gaining up to half a percent on leading currencies as the slow recovery continued. We’ve just had retail sales and consumer confidence, but the steady supply of data reduces to a trickle next week. Does that mean no movement for GBP? Recent history suggests not.
GBP/USD past year
EUR: A patchy week for euro
Gains for the euro on USD, yen and Swiss franc yesterday suggest an increasing appetite for risk among investors. It’s a quiet end to the week for eurozone data, but next week sees plenty of interesting business and consumer confidence data.
EUR/USD past year
USD: Losses slow for dollar
There were relatively minor losses for USD yesterday against most currencies, but overall it’s a better week against the euro, albeit something of a dead cat bounce taking the month’s losses to just below 5%. Coming up today, a final result for Michigan Consumer Sentiment – will the huge fall in the preliminary reading be confirmed?
USD/GBP past year
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business account manager on 020 3918 7255 or your Private Client account manager on 020 7898 0541.
