Global stock markets fell across the world yesterday, taking sterling down with them to its lowest point against the euro for 10 weeks and against the euro for 6 months.
It wasn’t meant to be like this; with 19 July being the day that almost all Covid-19 restrictions were due to end, with nightclubs and theatres open to full capacity and social distancing and masks no longer officially mandated.
However, with hundreds of thousands of workers being forced to self-isolate due to rising Covid cases, the UK economy is still facing severe headwinds, and other safe haven currencies are gaining at the expense of sterling.
Yesterday we also heard from two Bank of England MPC members pouring cold water on any imminent increase in interest rates or cutting of QE. External policymaker Jonathan Haskel and new member Catherine Mann said, respectively “Tight policy is not the right policy” and [on worries over inflation] “you’ve got to see the whites of their eyes”.
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