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The Bank of England
The start of a pivotal week for the pound and US dollar has started very much in sterling’s favour. GBP/USD gained 0.25% in early trading, with GBP/EUR not far behind.
This may come as a surprise bearing in mind the endlessly negative headlines around the government and the UK economy, with hundreds of thousands marching in the capital at the weekend and threats to topple the prime minister from within his own party.
However, the markets seem to be looking at the financial side of things and the only game in town this week is interest rates – with the Bank of England deciding on Thursday and the US Federal Reserve the day before.
For the UK we have a welter of data before all that, with earnings and employment tomorrow and inflation on Wednesday.
You might think that the British public would be happier, given their recent pay rises which have been averaging nearly 5%. The issue was highlighted by the Financial Times this morning, which pointed out that average pay rising at this rate is not helping the Bank of England to reach its 2% inflation target. These earnings rises also feed through into similar pension and benefits increases too.
The government will be desperate to change the narrative, and they were not helped by last week’s GDP result which showed a flatlining economy in July.
So, it’s a hectic week for sterling, and it has never been more essential to 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 surges to welcome busy week
The pound started the weekly strongly this morning as the markets look ahead to a week full of high-level data and with an interest rate decision on Thursday. Trading may have been positive so far, but there is no guarantee of that continuing.
GBP/USD past year
EUR: Single currency under pressure
It’s a sea of red on the charts for the euro this morning, but the good news for those selling euros is that the losses are minor. It’s been a quiet period for the euro, and with relatively little data coming up this week the euro may be in passive mode.
EUR/USD past year
USD: All downhill for the dollar, again
The euro and US dollar are fighting it out for title of worst-performing currency right now. With the most eagerly awaited Federal Reserve interest rate decision for a long while on Wednesday, it could be a week to be proactive with currency decisions.
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.
