The pound is looking strong against the euro and the dollar this morning, still benefiting from a more positive outlook after the Bank of England’s monetary policy meeting last week.
Whilst officials expressed concerns over unemployment and acknowledged that the growth outlook is “unusually uncertain”, they said that the UK’s economic recovery had been “earlier and more rapid” than it had assumed in May. They also voted unanimously to keep interest rates on hold.
There’s still plenty for the pound to contend with this week, however. UK GDP data will be released on Wednesday, which will tell us how the economy fared in the second quarter of this year. Due to lockdown restrictions, we can expect to see that the economy shrank considerably. If the figure shows a larger contraction than predicted, then sterling could be affected. However, many will be looking for signs that the economy recovered in June after the reopening of businesses.
Brexit remains a major driver for the pound and talks are due to resume next week between the UK and EU. As we know, after leaving the EU back in January, the UK is now attempting to forge trade deals with other countries.
The UK and Japan held two days of talks in London at the end of last week and are reportedly making good progress. Both sides are hoping to get a deal before the end of this year – many will be hopeful that the UK and EU can achieve the same!
As usual, there’s plenty of uncertainty on the horizon for sterling. So, to ensure that your money is protected with a forward contract, why not take advantage of today’s rate and call your trader on 020 8108 5337
