What a week that was. Since last Monday sterling has lost significant ground against all of its top 19 rival currencies, including around 2% against the euro and US dollar.
The decline shows little sign of abating, so to lock the current rate in and protect yourself against further losses, do call your trader on 020 8108 5163.
The main reason was the rise in UK interest rates by only 0.25% when the markets had expected 0.50%, but comments from Bank of England rate-setters about inflation and the risk of recession have weighed heavily on the pound.
Where it goes from here is anybody’s guess. There are no significant data releases until quarterly GDP data on Thursday, and this is likely to be watched very closely, plus further speeches from members of the Bank’s Monetary Policy Committee.
While it’s good news for those selling overseas assets or those moving back to the UK, at least those buying euros can take comfort from sterling staying well above the average of the past two and five years.
However, any good news that might come out of the Ukraine war will strengthen the euro. So while we would all cheer a potential end to the war, anyone with a GBP-EUR trade will be exposed unless they lock it in with a forward contract
