Yesterday sterling gained against the US dollar and lost against the euro. While that ultimately ended in little change overall over the week, GBP/EUR remains close to a three-month high.
There was a large loss against the Japanese yen, but no more than any other currency, as JPY made gains of 3% to 4% against its major pairs. The reason for the yen’s strength is the fact that the Bank of Japan looks set to raise interest rates just as the US Federal Reserve in particular is about to lower them.
There was plenty of data to keep the markets interested yesterday. On the European side, eurozone GDP fell in the third quarter by 0.1%, leaving it flatlining across the year. Germany’s industrial production fell by 0.4% in the month, when growth had been expected.
In the UK, house prices were revealed by the Halifax to have grown by 0.5% in the past month, cutting the annual decline to around 1%.
There was little movement for the dollar, as the markets await November’s Non-Farm Payrolls reading, out today at 1.30pm UK time.
On British high streets, the British Retail Consortium (BRC) noted a rise in the use of cash, as opposed to debit and credit cards. Cash was used in 19% of transactions last year, compared to 15% the previous year. Also bouncing back from the pandemic, the Nationwide Building Society has told all staff that they must be in the office for 40% of their working time (two days per week). This might have been noticed less had the Nationwide not previously championed a “Work from Anywhere” policy just two years ago.
A reminder that next week is a big one for data, and with interest rate decisions too, so if you are currently exposed to currency risk, make sure you are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Personal Trader on 020 7898 0541 to get started.
