Sterling maintained its position at close to a six-month high against the euro and a 4½ year high on the US dollar. Sterling maintained its position at close to a six-month high against the euro and a 4½ year high on the US dollar. However, it was knocked off the heights it reached against the dollar earlier this week and floundered against currencies like the Swiss franc, Australian dollar and the Norwegian krone.
Against the euro, the pound was steadier. With the UK data calendar relatively light, sterling is taking its cue from overseas headlines. The US dollar had been weakening as the threat of a US government shutdown grew. (Not for the usual reason – Congress refusing to ratify a continuing government debt – but the Democrats refusing to finance the Immigration and Customs Enforcement – ICE). But that’s a fast-moving situation and can change any time.
There are various other influences at play. The first was the Fed’s interest rate decision on Wednesday, holding rates steady in the teeth of President Trump’s ire. There is also the rise in oil prices as the US naval ‘armada’ steams towards Iran. There are also trade deals – although so far the one that Europe has signed with India looks much more impressive than anything coming from Keir Starmer’s visit to China so far.
This morning the eurozone is all about the economic growth, or lack of it. France’s gross domestic product (GDP) for the past year has just been revealed as growing at 1.1%, which was a little below market expectations and mid-range for the G7. Spain’s is at 2.6%, also slightly below expectactions, but the star of the eurozone nonetheless. We’ll get the German result at 9am.
For next week, the Bank of England’s decision on Thursday is the obvious focal point, although no-one expects any interest rate change, especially with shop price inflation on the rise again. According to the British Retail Consortium (BRC) prices rose by 1.5% just this month.
In business news, shares in Saga rose by another 15% after the insurance and cruises for the over-50s company saw growing demand for its ocean and river cruises.
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