It’s a case of groundhog day for sterling this Monday morning as once again the pound has dropped 1-2% in early trading, with the markets reacting to bad news – or no news – over the weekend.
Bearing in mind the waves of problems coming from so many directions – health, business, travel, EU, Christmas… – you may be surprised that it hasn’t dropped further. After all, we are still nearly 4% above the lowest point of the year against EUR and more than 15% against the lowest point of USD
Perhaps sterling’s resilience is due to the markets taking a more robust attitude to the country’s health. Most of us are now hearing that elderly relatives are being vaccinated, or at least have their appointments booked.
How will the country’s mood change by early February, in just a few weeks’ time, when the streets are full of gallivanting octogenarians, freed from a year of fear and lockdown? That, after all, is where the vast majority of fatalities has occurred so far.
On Brexit negotiations, according to the BBC this morning the talks are now about “tying up loose ends and fish”. If the story of Covid in the UK is about the government eventually facing up to harsh reality and ditching the “freedom” rhetoric, then it may well follow the same approach with EU negotiations.
In the meantime, we should prepare for the worst, and that means no trade deal – still the likeliest option according to the actual government – with the expected decline in sterling.
Therefore, to lock in today’s rate, do call your trader on 020 8108 5337.
