Sterling fell sharply yesterday, by close to 2% against the US dollar and back to its lowest position since mid-November last year. Is there worse to come for sterling? Maybe, maybe not, but prudence would suggest to guard against it.
Against the euro the drop was smaller and indeed has picked up a little overnight. However, there is a feeling of GBP/EUR hanging on to a resistance level by its fingernails, so to protect your position if you have a major transaction coming up, do call us asap on 020 7898 0541.
The culprit in the pound’s demise was sitting 3,000 miles away in front of a Washington DC Senate committee room. Jerome Powell, chair of the US Federal Reserve, told the banking committee that “the ultimate level of interest rates is likely to be higher than previously anticipated” and said recent economic data was “stronger than expected”. That supported the dollar, damaged stocks and took the pound down with it.
On the economic news, something similar could be said of the UK, because slipping out with little fanfare has been a host of positive economic news this week. On Monday new car sales and construction PMI both shot up. Yesterday retail sales for February jumped nearly 5% year on year and the Halifax House Price Index turned the corner, much to analysts’ surprise, rising by 1.1% in a month.
The acid test comes on Friday with the GDP data, and then the following week is a busy one, including the Budget.
Much can happen between now and the end of next week. With Smart Currency, unlike some banks and FX apps, you can talk through your options with your experienced account manager. There many be several ways of organising your transfers to minimise risk. So if you have a friend, colleague or family member who is making a payment overseas, or receiving money from abroad, why not recommend us?
Do that before 31st March and if they make a trade we’ll credit you both with £50. Just click the link here.
