Sterling stayed strong yesterday, returning close to Wednesday’s highs against the euro and exceeding them against the US dollar.
The pound is now 10% stronger against the dollar than this time last year. Sterling has been strengthening on the back of stocks – they usually move in tandem – as the S&P 500 hit yet another record.
The FTSE also strengthened after hopes rose of an economic stimulus in China, and the US economy was confirmed as growing at 3% per year. However, the FTSE has been pegged back by falling oil company stocks, as Saudi Arabia abandoned a hope to curb production until the oil price hits $100 per barrel.
While the US economy grows, Germany’s looks to be shrinking. The Joint Economic Forecast Project Group believes that Germany’s GDP will decline by 0.1% during 2024.
Several central bankers were speaking yesterday, and most were supporting continued large interest rate cuts. Markets are pricing another 50 basis point rate cut from the US Federal Reserve in November at 61%.
European Central Bank (ECB) president Christine Lagarde was also speaking, but refusing to answer calls from Italian ministers to cut more quickly. ECB policymakers have been clear on having no particular path right now, but seeing where the data takes them.
In UK business, Rightmove rejected a £6million takeover offer from the Australian REA group. Rightmove has 86% of the UK house search market.
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