020 7898 0500
It was a day of two halves for sterling yesterday as recent losses were reversed in the afternoon session. There was no obvious reason for that rise, which was almost across on the board, although against the euro the pound continues to benefit from political and financial troubles in France.
On the data front it’s been rather slim pickings for anything powerful enough to move the currency markets. But filling the vacuum have been various central bankers in the US and Europe.
Hawkish comments on inflation from a member of the US interest-rate setting committee, the FOMC, helped to strengthen the dollar yesterday. More members of that committee – under serious pressure to cut the costs of borrowing by the Trump administration – will be talking publicly today, as the minutes of their most recent meeting are published.
Also in the US, there was evidence of falling optimism among consumers as the RCM/TIPP Economic Optimism Index declined to its weakest since May, just as we head to the Christmas shopping season. There is good and bad news for shoppers today, depending on your gift-giving profile, with gold hitting over $4,000 per ounce for the first time ever, but cocoa at its lowest for nearly two years.
In business news, Jaguar Land Rover (JLR) said it was restarting production at some factories following the cyber-attack outage at the end of August, which itself came on top of the ill-effects of Trump tariffs.
Supporting ‘the Availability Heuristic’ in marketing, in this case making it impossible to avoid tripping over your product littering the streets, Lime bikes have reported a 75% rise in turnover in the UK, to £111million. Profits, however, are down by 40%.
It’s been a period of relative stability for the pound, with minimal movement for GBP/EUR since the beginning of July, and no trend emerging for GBP/USD since May. Will that equilibrium continue into 2026? See what the experts say in our new Quarterly Forecast, out tomorrow.
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 holds on to gains
Despite a brief slump yesterday lunchtime, GBP/EUR held on to the 0.5% or so that it gained after the French prime minister (the new one) resigned on Monday. A quiet period for UK data continues, but today the Chief Economist at the Bank of England – Huw Pill – will be speaking, which could interest the markets.
GBP/USD past year
EUR: Losses continue
The euro continued to lose ground yesterday after the French prime ministerial resignation. However, the losses are modest as government crises go, at least for now, and the only obvious point of interest in a week with little for the markets to chew on, other than Germany’s Balance of Trade tomorrow morning.
EUR/USD past year
USD: Dollar in the green
The US dollar posted good results yesterday, following hawkish comments on Monday evening from one of the Fed’s monetary policymakers Jeff Schmid, who insisted that interest rates must stay high to see off inflation. We’ve got more Fed policymakers speaking today, after the release of the FOMC’s last interest-rate decision meeting minutes.
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.
