The pound remains above €1.19 this morning, despite a wobble yesterday that could be a warning of a bigger drop to come.
Yesterday’s Purchasing Managers’ Indexes (PMI, read more about that here) showed that British businesses are slightly more optimistic than Europe’s with a UK reading of around 58, while Germany’s was 53 and France’s 56.
Anything over 50 means that businesses are optimistic about trade over the next month. However, Europe’s was above what the markets had predicted and the UK’s below, which in the weird world of finance means that the euro would be strengthened and the pound weakened.
And that’s what happened, with the pound dropping around 0.4% yesterday. Sterling has recovered a little this morning, but Barclays Bank have released their predictions that this is as high as sterling will get until the second half of 2022. You can still read a wider analysis of where GBP, EUR and USD will be by the end of the year in our latest Quarterly Forecast here.
If you agree with Barclays and are planning on making a significant purchase before August 2022, why not call your trader on 020 8003 4915 to lock in the rate with a forward contract?
