Sterling sank by half a per cent against the euro and US dollar early yesterday morning, very much against the trend of recent weeks, although it recovered some of those losses later in the day and hits Tuesday slightly down against the euro only.
The catalyst for the loss appears to be jitters about the “final” end to most domestic lockdown procedures by 21 June – with health experts apparently urging a month or two delay to see off the Indian coronavirus variant first.
A “long read” in the Financial Times today suggests that the dominance of the US dollar could be ending over the long term, hastened by President Biden’s $1.9tn stimulus package. In the shorter term the dollar is struggling too, as investors feel confident enough to buy riskier assets. The euro hit a three-month high against the US dollar and was very close to overtaking January’s level to achieve a three-year record.
A quiet day for UK data means that traders will be looking across the Atlantic and Channel for guidance, alongside any new hints on lockdown ends, both in the UK and eurozone.
The Bank of England governor Andrew Bailey offered his opinion on cryptocurrencies, telling the UK parliament yesterday “I’m going to say this very bluntly again: buy them only if you’re prepared to lose all your money.”
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 Personal Trader on 020 7898 0541 to get started.
