Sterling was the winner and the US dollar the loser from another round of “who’s going to cut interest rates first?” yesterday, after unemployment rose in the UK and inflation expectations rose in the USA.
The Bank of England’s chief economist Huw Pill confirmed that a summer interest rate cut remains on the cards. We will hear the US inflation rate later today, but Producer Price Inflation (PPI), which is a good indicator of what is to come, rose yesterday.
You may have noticed in the news that inflation also rose in Argentina. It hit a 33-year high of 289.4%.
Argentina was the sixth richest country in the world at the start of the 20th century, with higher Gross Domestic Product (GDP) than France or Germany. A country’s economy can collapse fast or slow, and it is that kind of news which can give one pause for thought, perhaps, rather than trying to decipher the latest comments from a Bank of England official.
Looking over the past 20 years that Smart Currency has been operating, we have seen “black swan” events (unexpected, until they happen, then kind of obvious) occurring with increased frequency. For anyone with a large currency transaction coming up, there is always the worry that things can go very wrong for their exchange rate.
Which is why we suggest a consultative, safety-first currency plan that ensures you can always fulfil your plans. So please do speak to your account manager, on 020 7898 0541.
Less dramatically, we hope, we have to wait for another week for the UK’s inflation figures but there is plenty to move the market in the meantime. That includes the eurozone’s employment and GDP data coming up very soon, and the aforementioned US inflation (which can also impact the pound and euro).
