Exchange rates so far have been unmoved by the various events in US politics. Another presidential term for Donald Trump was probably priced in last week, but while Biden’s withdrawal from the race mixes matters up it has barely moved the dials, so far.
Compared to this time last week sterling is around 0.3% down on the US dollar and euro and over 1.3% down on the yen and Swiss franc. However, it is up on other currencies, such as the Australian and New Zealand dollars.
A more flattering comparison is over the past year, with GBP/EUR nearly 3% stronger than last July.
After a busy few days for data last week – inflation, employment and retail sales – there is less for the markets to chew on this week, as we head towards an interest rate decision on 1st August. But there is the Purchasing Managers’ Index (PMI) on Wednesday. This is a regular measure of business leaders’ optimism – or pessimism – about business.
What is particularly helpful about PMI is that all the main economies’ data is released on the same day, so one can make comparisons between, say, Germany, France and the UK. But what analysts look at most is shifting mood over time – is an economy on the way up or the way down?
PMI certainly has the power to move exchange rates, so if you are happy with the rate today and it enables you to fulfil your plans, why not lock it in?
As President Biden seems to have been discovering, the pain of missing out can obscure all the pleasure of winning in the first place. So it might be worth taking advantage of the 3% gain since this time last year.
You can do that with a call to your account manager on 020 8108 5163.
