Sterling went into reverse gear yesterday, weakening by half a cent against the US dollar and as much as 0.8% against the Japanese yen. This doesn’t appear to be based on any particular market data, more about a slightly decreased attitude to risk that is supporting the US dollar.
At least sterling was stable against the euro, despite Spanish inflation picking up unexpectedly. Inflation in Spain hit 2.8% year-on-year, above expectation of 2.6% and well up on last month’s 2.4%. It’s the highest since July and the fourth monthly rise in a row. Bad news for the European Central Bank and its interest rate cutting plan? We’ll hear German and eurozone inflation next week.
In business news, there was a jump of nearly a quarter in British people admitting not to have paid tax on their overseas assets in 2023-24, according to data from HMRC. The tax office was given the funding for an extra 5,000 compliance officers in the recent budget.
Trouble in the drinks industry on the eve of “Dry January” as the number of British pubs dropped below 39,000 for the first time, and Mexico reported that it has a 500-milion-litre tequila lake due to ebbing demand. A similar problem apparently faces Scottish whisky distillers.
If you’re intending to make your contribution to drying up that lake this evening, or even if you are not, we wish you a very happy New Year.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your account manager on 020 7898 0541 to get started.
