There has been a slow but steady upward trend for sterling against the euro over the past week, albeit with some sharp movements along the way. GBP/EUR is at a two-week high and 0.65% up on the start of the month.
Given that currency markets react to world events we cannot predict stable exchange rates over the next two weeks. So if you have a major transaction coming up, why not lock in your rate now? Just give your account manager a call on 020 8003 4915. We are working as usual, apart from bank holidays, and will be open until 5pm on Christmas and New Year’s Eves.
Back to currency news, and after a run of dismal numbers throughout December that made it look like the Bank of England would have to step in with some serious stimulus, the reluctance of almost half of its interest rate setters to cut rates even now gave a boost to the pound last week.
Even so, the cut to 3.75% did go ahead. This morning GDP was confirmed at just 0.1% for the third quarter. Moreover, the Office for National Statistics (ONS) revised down its previous growth estimate for Q2 from 0.3% to 0.2%.
So far, so bad. However, there was good news too from the ONS this morning. Business investment in the UK rose by 1.5% in Q3, much better than expected.
On the commodity markets, gold and silver both hit record highs again this morning, as the markets look for safe havens away from the dollar with interest rate cuts likely in the US early next year.
The US blockade of Venezuelan oil exports is another geo-political risk worth watching, while the agreement of the EU to ‘loan’ Ukraine €90billion means that the war effort will continue.
