The pound was routed by virtually all major currencies yesterday, with losses across the week of over 1% against the euro, US dollar and Swiss franc.
The main reason for the decline is concern that the UK economy is unlikely to bounce back as quickly as hoped for by the (already priced in) “Freedom Day” rules’ relaxation, plus two MPC members coming out against tighter monetary control.
While yesterday’s fall, continuing this morning, is a reversal after two months of gradual gains, sterling remains 5% higher than this time last year against EUR and around 9% stronger than USD this time in July 2020.
A relatively quiet early part of the week for data continues, with no significant data releases today, but Public Sector Net Borrowing tomorrow and CBI Business Optimism on Thursday. Of much more interest will be Gfk Consumer Confidence overnight on Thursday followed by retail sales on Friday morning.
