The pound has pulled back a little against the US dollar, gaining close to 0.5% this morning. However, this does have something of the dead cat bounce about it, coming as it does after roughly a 5% fall from its height in mid-summer.
GBP/USD’s drop has been a combination of the dollar strengthening, due to the hope that the Feferal Reserve will continue raising interest rates, and the pound falling due to weakening economic data. But for GBP/EUR there has been no such clear direction, and since the beginning of June there has been plenty of movement but nothing decisive. Is that about to change, to the downside for sterling?
We make no predictions for exchange rates, given their dependence on future events that we cannot predict either. However, the general feeling in the markets appears to be that this would be a good time to be proactive and protect your budget from any change in the weather re exchange rates.
There is a lot of data coming down the wires this week, starting tomorrow with employment and earnings, then Gross Domestic Product (GDP) on Wednesday. But there is also plenty from the US side (including inflation on Wednesday) and the eurozone, with an interest rate decision on Thursday.
Your sterling could, therefore, be worth a very different amount in euros by the end of the week. To lock in today’s GBP/EUR rate, roughly 2% above where it was last year, call your trader on 020 8108 5163.
