Sterling ended yesterday close to its lowest level against the US dollar since late summer 2020, while making no serious gains against the euro following Friday’s drop.
Movements yesterday were not due to anything much happening in the UK, although what data there was would have disappointed the markets. Two releases from the Confederation for British Industry (CBI) were poorer than expected, covering business optimism (weakest since April 2020) and industrial order books. More positively, this morning’s Public Sector Net Borrowing report showed government debt falling.
The US dollar goes from strength to strength, riding the hawkish comments from the US Federal Reserve which are diverging from the Bank of England’s more dovish stance. US interest rates look likely to rise sharply, but the dollar is also likely being supported by a risk-off sentiment.
There is a blizzard of data coming along at the end of the week, but until then it may well be comments from central bank ratesetters that govern the currency markets.
In the business news, the world’s richest man is closing in on a bid to buy Twitter.
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