After a stable week the pound has taken a dive this morning, largely prompted by poor retail sales data just released.
The week had been going well, with some stability against both the euro and US dollar following the losses of last Friday.
Also released last night, the Gfk Consumer confidence reading for the UK came in at -30. While this is an improvement – and is close to levels of Germany and the Euro Area as a whole – it still shows that the cost of living crisis and higher interest rates are putting people off buying. As the Office for National Statistics (ONS) pointed out, all that rain in March didn’t help, either.
Nevertheless, sterling has got through a tricky 10 days for data relatively unscathed at just 0.5% down on the month against EUR and up over 1% against the US dollar.
Will that last? Call your Personal Trader on 020 7898 0541 to talk through your options. Also check out our brand new Quarterly Forecast, with in-depth analysis and predictions for GBP/EUR, GBP/USD and EUR/USD, plus some news on the Australian dollar, Japanese yen and Swiss franc.
On interest rates, yesterday a former member of the Bank of England’s policymaking committee – Michael Saunders – suggested that one more rate hike would be required next month but that inflation would then start to fall rapidly.
In business news, President Biden’s Treasury Secretary Janet Yellen has warned against ‘decoupling’ from China, saying “A full separation of our economies would be disastrous for both countries. It would be destabilising for the rest of the world.”
Facebook and Instagram’s parent company Meta is making nearly 700 UK staff redundant, mainly in London (although apparently some will have the blow softened by a transfer to WhatsApp’s New York office).
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