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After a week of slow but sure growth against the euro, sterling dropped a third of a cent yesterday, leaving GBP/EUR essentially unchanged over the month. Better news against the US dollar yesterday and GBP/USD reaches the end of the month 1.35% up.
Overall, the currency in the ascendancy yesterday was the euro, gaining against all-comers, albeit fairly modestly. This looks to have been simply a correction from the uncertainty that surrounded a forthcoming vote of confidence in the French government.
The big data news yesterday was the American economy, which grew by an annual rate of 3.3% in the second quarter of the year. This was quite the reversal from the first quarter, where growth was minimal, and driven by a decline in imports (which are taken off GDP) and a rise in Americans’ personal spending.
In the UK the only data of note was a strong rebound in car production, which rose by 5.6% last year to 69,000 vehicles. America is the largest national market for British cars (although it is dwarfed by the eurozone as a whole), emphasising the importance to the sector of the trade deal signed. Even so, British sports carmaker Lotus has just announced that it is cutting 40% of its British workforce.
On those tariffs, exemptions on small packages arriving in the USA have now stopped. Goods worth less than $800, previously exempt, will now be subject to tariffs regardless of their value. The change seems mainly aimed at Chinese exporters such as Shein and Temu.
We’ve just had inflation data from France and it continues to be good news for British people retiring there. While inflation in France is less than 1%, the UK pension triple lock increase next year will be 4.10%, based on the higher of CPI inflation in September, average earnings growth between May and July, and the 2.5% floor.
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: Sterling ends August quietly
After a desultory sort of month with barely a 1.5% swing against the euro and even less against the dollar for the past fortnight, next week appears to hold little excitement, at least on the data front. It’s all building towards the next interest rate decision in three weeks, and the autumn budget – will the chancellor raise taxes, and can she survive in office if she does?
GBP/USD past year
EUR: Inflation data out today
After a strong month overall for the euro, the economic readings continue to come thick and fast in the eurozone with implications for exchange rates. We’ve just had inflation readings from France, showing prices rising by just 0.9% over the past year. Italian and Spanish inflation numbers will be out soon.
EUR/USD past year
USD: More falls for dollar
It was another dim day for the dollar, falling just about everywhere as the markets look with disapproval at the potential end to Federal Reserve independence among other risks to America’s economic stability. Still, Americans have seemed as optimistic as ever on the various measures – will that continue with the Michigan Consumer Sentiment Index later this afternoon?
USD/GBP past year
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