After all the political excitement last week, sterling starts at its highest point since early May against the euro but close to historic lows against the US dollar.
Last week GBP/USD hit its lowest since March 2020, but that doesn’t really tell the whole story. March 2020 was the start of a global pandemic the effects of which were unknown but likely to be the biggest for the global economy for a hundred years. The weakness of sterling now is, arguably, down to something more chronic – a general lack of growth, investment and optimism about the UK economy.
Can a new Prime Minister turn that around? We won’t know for a while, and 2022’s summer of a lame-duck PM is unlikely to impress the markets.
In the meantime, the pound is well above the five-year average, especially for summertime, against the euro and well worth locking in with a forward contract.
Do that with a call to your trader on 020 8108 5163.
