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The Bank of England is seeking to warm up the economy
The pound has been flying high over the past few days, with a 1%-plus improvement against the euro and at a three-year high against the US dollar.
This is despite the increasing possibility of the Bank of England not just cutting interest rates by 25 basis points next week, but signalling that those cuts will be stepped up. This is likely to affect sterling pairs negatively.
Although we’re in a period of slow data for the UK, there is a mass of industrial data from the USA and eurozone. Yesterday we heard that the US employment market is loosening, with job openings down by nearly 300,000 in March.
The star of the recent European economy, Spain, recorded a small slackening off its economic growth, with annualised GDP slipping to 2.8% following the first quarter of 2025. Eurozone economic confidence slipped, with consumers at their most pessimistic since November 2023.
In business news, the big story was a spat breaking out between the Trump administration and Amazon yesterday, after reports that the online retailer would show the impact of tariffs alongside prices on the site. The plan – apparently mooted but never passed – was swiftly shelved.
There were reports from the World Bank that Commodity prices are likely to fall by 12% this year and even further in 2026. It predicts oil, for example, down to $64 per barrel. Good news for some, but the World Bank warns of serious effects for poorer countries relying on exports.
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 its place
A mixed day for sterling saw no great advance on this week’s 1% gain on the euro but the best for GBP/USD since early 2022. There are some mortgage numbers coming out tomorrow but we’re in a fallow period for data overall.
GBP/USD past year
EUR: Markets parse eurozone data
A calm day on the markets saw the single currency treading water. This was despite a slew of industrial data yesterday, which continues today with French and German inflation and GDP. If the markets are still where they are now by end of day it will be a surprise.
EUR/USD past year
USD: Dollar hits fresh low against pound
Yet more of a sinking feeling for the US dollar as it reached a three-year low against the pound yesterday. After evidence of further loosening of the US employment market yesterday with JOLTs job openings, attention will turn on Friday to Non-Farm Payrolls. Plenty to excite the markets before then though, with the affects of Trump tariffs predicted to feed through to industrial and confidence data this week.
USD/GBP past year
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