Sterling found some traction yesterday afternoon, which provided some badly needed respite in the face of unfavourable market conditions. GBP/EUR and GBP/USD were both little changed over the course of the day, representing a pretty good outcome after recent turmoil.
There has no such drama for the US dollar. In fact, the US dollar index (a measure of its relative strength against a basket of key currencies) moved close to its strongest in two years, as recent jobs data continues to support the view that the Federal Reserve will not be in any rush to slash interest rates.
Without much in the way of data to focus on, bond markets were again in the spotlight. Their well-publicised concerns may have been eased by Keir Starmer’s refusal to rule out further spending cuts. The prime minister promised his government would be “ruthless” in cutting costs as part of a broad spending review, while also attempting to return focus to growth with a string of AI policies.
In news that could impact a large number of expats, Spain’s prime minister Pedro Sánchez yesterday announced a plan to impose a 100% tax on real estate sales by non-EU buyers. The move comes amid growing public anger at the housing crisis and overtourism in certain regions. “The west faces a decisive challenge: to not become a society divided into two classes, the rich landlords and the poor tenants”, Sánchez said.
Chinese exports increased by a massive annualised rate of 10.7% in December. That helped China’s trade surplus to widen to almost $105bn last month.
If you’re looking for a document that can help you make sense of these developments, make sure to secure your copy of our January-March Quarterly Forecast. Keep an eye on your inbox as the first of these will be arriving hot off the press later today.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract or call your account manager on 020 7898 0541 to get started.
