The pound has been gradually strengthening following the decline in the first week of August, and remains a good two to three per cent above the levels of the early part of the year against the euro.
Will that continue? See what the major banks predicted for exchange rates this summer in our Quarterly Forecast.
Data-wise, there isn’t a lot coming from the Continental side of the equation right now, but on the UK side we have the quarterly Gross Domestic Product (GDP) reading coming up on Friday and which will certainly be of interest, possibly moving the pound, (or possibly not).
It being a quarterly reading, economists take a closer interest as, technically, a recession is defined as two consecutive quarters of falls. Most serious analysts look to a wider range of readings to define a genuine recession, and so far this week we have seen house prices and retail spending declining, but not as much as expected.
In the US, which also tends not to take all of August off, the big event is inflation data later today. The US continues to have an outsized effect on the global economy, and so their inflation reading could well affect your exchange rate. In China, incidentally, inflation is now falling. Prices dropped by 0.3% there in the past year as consumers have stopped spending so much.
While this may seem a quiet time for currencies, as we know, things can change quickly when they do. So to lock in your rate, please call your trader on 020 7898 0541.
