Sterling hits Wednesday nearly 2% above this time last week against EUR but still down on yesterday. The cause of yesterday’s slide was the Bank of England governor suggesting he was leaving the door open on negative interest rates.
The final round of Brexit talks is the background to sterling’s jittery movements for the time being, but until we get real news from the trade talks it is still the economy and the potential for a further lockdown and/or negative interest rates that will determine which way the pound moves.
It’s hard not to get the feeling that a big movement in sterling is approaching. But which way? It’s all too possible for a cognitive bias to creep in when considering this and assume that everything will be alright in the end.
However, there is no real reason to believe that! There is still nothing tangible to suggest we will get a trade deal with the EU in time or that the UK can buck the trend and avoid yet more restrictions as the second wave continues to take a hold.
Therefore the most sensible course of action is to lock in today’s exchange rate for the year ahead. Please do that by calling your trader on 020 8108 5337.
