020 7898 0500
After marching reliably upwards over the past month the pound did something of a doubletake over the past 36 hours and has slipped backwards. Even so, you’re getting close to 2% more euros and dollars than a month ago for your sterling.
Is this the end of the line for increases then? Not according to some of the predictions in our Quarterly Forecast, free to download and read here. It’s good to be in the know on economics and politics and the forecast is a timely and readable analysis.
With disappointment over our World Cup exits still raw, the nation’s attention can at least be diverted by Britain’s other spectator sport – new prime ministers. The big question for the currency markets is who will be the next chancellor? Choices of chancellors are vital and there could be one or two percentage points for sterling exchange rates riding on the decision. So if you have a transaction coming up this week and wish to take the risk out of that, speak to your account manager TODAY.
A positive spin to the outgoing Starmer-Reeves partnership is that the UK economy grew in May, by 0.1%, according to yesterday’s Gross Domestic Product (GDP) results. However, while such sectors as services and advertising strengthened, production and construction continued to fall. Next week we start getting the kind of data that influences currency markets – inflation, unemployment and market surveys (PMI) – so do keep reading our updates.
If you have lost track of the Straits of Hormuz recently, the picture is not pretty, with continued severe delays to shipping and blockages as the missiles fly again. No surprise then that the oil price is up again too. The US dollar has not made any ‘risk off’ gains though, or at least these have been overwhelmed by other negatives. In his first testimony to Congress, new chair of the US Federal Reserve Kevin Warsh sounded serious about inflation, but refused to validate expectations of an imminent rate rise. That left the dollar without a decisive policy signal.
So, changing times and regimes, but whatever the news Smart Currency will be here to help you make sense of it all and be proactive about your currency plans.
GBP: Froth comes off sterling’s week
The pound retreated from its month of gains against the euro and US dollar yesterday – or at least had a rethink on Wednesday’s optimism. After yesterday’s GDP the high-level data comes thick and fast next week, with unemployment and earnings on Tuesday and inflation on Wednesday. Plus there is the not insignificant business of a new prime minister.GBP/USD: the past year
EUR: ECB gathers data for next week’s decision
The euro has gained on the US dollar but lost to the pound again this week, although not by as much as it you might have feared midweek. Coming up shortly is a final result for June’s inflation ahead of next week’s ECB interest rate decision. There is also a mass of survey data next week, including business plans in the PMI results and customer mood in the authoritative ZEW Economic Sentiment Index.GBP/EUR: the past year
USD: Markets wait for clearer picture
It’s been a mildly negative week for the US dollar, although the markets appeared to be in ‘wait and see’ mode for both the war in Iran and the future of interest rates. With the Fed’s decision still almost two weeks away there is a slight dearth of data next week, so the Straits of Hormuz may be leading the running once again.USD/GBP: the 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.
