Last week was positive on the whole for sterling, gaining over 1.5% against the US dollar and around 0.5% on the euro after a distinctly rocky Monday. However, GBP/EUR is a good 2% up on a month ago, and remains well above the post-referendum average.
This week the markets both here and abroad will be looking for clues as to what will happen with the interest rate decisions both here and in the EU and US on 14th and 15th December.
This morning the CBI said that the UK is going into a year-long recession, warning especially about a lack of business investment. We may get some evidence as to the state of the UK economy this week, with new car sales, retail sales and house prices over the next few days.
Changes abroad could affect the pound too. For example, a report in the FT highlights how Europe is successfully reducing its dependence on Russian gas, now using a quarter less gas overall than the five-year average.
There is a sense that various themes of the the year – such as inflation vs interest rates, or the war in Ukraine’s impact on European industry – could be coming to a head, and accounts will be settled. To ensure you don’t lose out to falling exchange rates, call your trader on 020 8108 5163 to lock in your rate for the year ahead.
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