The pound has passed the first few days of March almost 1.5% stronger than this time last month against the euro and about level with the US dollar.
In terms of where it goes next, you will find plenty of analysts who conclude that this is as good as it gets for now. Therefore to lock the current rate in with a forward contract, call your trader on 020 8108 5163.
After a quiet month since the last interest rate decision in early February, we’re approaching another period of intense high-level data and interest rate action.
The story so far: while inflation has been falling in the UK it is proving more resilient in the eurozone. Moreover, while Spanish inflation accelerated to “just” 6.1% last month, in Estonia, for example, it’s 18.6% and also rising. Hence the European Central Bank looks likely to keep on raising interest rates – at the expense of GBP/EUR.
Sterling was boosted the previous week by economic data that showed a recession apparently being narrowly avoided and business optimism rising. The markets will be assessing the power of that positive data, and whether it will continue, against the fact that if interest rates are rising faster elsewhere they should be taking advantage of that and selling the pound.
Into that mix we have some lower-level data this week, including new car sales, retail sales, Halifax house prices and RICS’ (chartered surveyors) views on where house prices are going, before the big GDP announcement on Friday.
If this all seems like too many variables to cope with this early on a Monday morning, please have a chat with your trader/account manager. They will be fully on top of it all and ready to talk through your options.
