Things were muted in the world of foreign exchange yesterday, primarily the result of scarce economic data. Sterling treaded water against the euro and the US dollar, while EUR/USD lost a measly 0.1% over the course of Monday.
One place that certainly wasn’t quiet was our Hammersmith office. Over the weekend, Smart Currency Group won Finance Company of the Year at the West London Business Awards 2024, an achievement we are immensely proud of given the strength of competition and the crowded West London field. After all, West London has a higher economic output than Birmingham and Leeds combined, so being recognised in this category for the fourth consecutive year is a major honour. But anyway, enough about us and back to our scheduled programming.
Israel’s economy has shrunk by 20% since the beginning of its war with Hamas. GDP plummeted as Israel diverted funds to its military operations, as well as the country calling up 300,000 reservists. The Israeli shekel lost 0.8% against the US dollar yesterday as markets digested the news.
Former Bank of England chief economist Andy Haldane waded into the discussion on interest rates yesterday. Current governor Andrew Bailey may not exactly be thanking his former colleague for the intervention though, as Haldane said holding interest rates for much longer might “crush the economy”.
In its monthly report, Germany’s Bundesbank warned that the German economy would shrink in the first quarter of 2024. Germany was already the G7’s worst performing economy in 2023 and the latest news is another blow moving forward.
In a development that may yet shift the dial in the price of oil, Houthi militants have launched a damaging attack on a cargo ship in the Red Sea. The crew of the Bulgaria-bound vessel were forced to abandon ship after being struck.
Attention shifts today to a speech by Andrew Bailey (and potentially a rebuttal to Andy Haldane’s comments), along with some intriguing figures out of Japan. Things really start to get going towards the middle of the week, so it might be worth thinking about locking in your next transaction before the next wave of uncertainty hits markets.
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 account manager on 020 7898 0541 to get started.
