As we reach the midweek mark, an ongoing selloff in global stock markets, along with a dip in inflation figures, is weighing on the pound.
This global selloff is largely being driven by worse-than-expected data from the ‘powerhouse’ that is the Chinese economy, as well as news that the Chinese government is starting to crack down on regulating its Big Tech firms.
Despite positive UK employment data – which showed that job vacancies had hit a record high between May and July – a ‘risk-off’ dynamic persists amongst investors, something that does not favour the pound.
This is nothing new: the pound often feels the brunt of a stock market decline. The good news, though, is that sterling is still supported above 1.17 and has held on to a lot of its recent gains, meaning that you will still get approximately 6% more euros for your pounds than last August.
What’s next for sterling really depends on market mood and the Bank of England’s next steps following the recent inflation data.
All this uncertainty can be easily avoided, however, by locking in today’s rate with a forward contract. Your trader will be more than happy to do this for you, as well as answer any questions you might have. Just give them a ring on 020 8003 4915.
