020 7898 0500Sterling made some gains against the dollar on Friday, but lost ground against the euro following some significant strengthening the day before. With no major releases coming out from the UK, the moves were likely down to events elsewhere.
It is a very quiet start to the week for UK economic data, with no releases scheduled for today or tomorrow. On Wednesday, we’ll see the CBI industrial trends orders for June, but the main highlight of the week is on Thursday, when the BoE will announce its interest rate decision. We will also see the public sector net borrowing figures that day.
The chart below shows the pound’s movements against the euro over the past month. As you can see, it has been a quiet period when compared to the last six months, no doubt influenced by the similar economic data flow from the UK and the eurozone, with growth slowing, as well as the ECB’s comments regarding interest rates in the eurozone. The chart worries us and we have to expect a breakout sometime very soon, but which way is impossible to predict and should help demonstrate the reasons why it is always best to protect your exposure to foreign currency through risk mitigation strategies.
