Sterling recovered some of Wednesday’s losses against the euro yesterday, while drifting further against most other currencies. This morning so far it appears to be tracking upwards again, with the confirmation that the UK economy avoided a recession during the winter, unlike Germany. However, both economies are smaller than pre-pandemic, while news from the US yesterday showed its economy leaping ahead.
So, the pound ends the week and month close to where it started both against the euro. It is around 1.6% stronger against the US dollar compared to the start of June, but some way off the 15-month high it reached mid-month.
Yesterday the US economy was shown to be growing faster than expected, at 2% rather than the predicted 1.4% annually. Jobless claims were also down, although we will get much more employment and earnings data next week, which will be of interest after US Federal Reserve chair Jerome Powell highlighted the tightness of the US labour market.
There was good news in Europe too, with inflation falling faster than expected. The preliminary numbers this week show Spanish inflation down to 1.9%, Germany’s and Italy’s at 6.4% and France’s at 4.5%, all but Germany’s having fallen.
Meanwhile, in the UK, the Bank of England reports that £4.6bn has been removed from savings accounts so people can weather the cost of living crisis – the largest level of withdrawal since records began.
In the business news, the UK faces another period of rail strike disruption next week, with drivers refusal to work overtime potentially affecting the network.
In the southern USA, during a heatwave with temperatures close to 40°C, Bud Light is being sold at prices cheaper than water, the New York Times reports. It follows complaints of an overly ‘woke’ marketing campaign that has upset its traditional market.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Personal Trader on 020 7898 0541 to get started.
