Sterling had a mixed start to the working week, with small gains against the US dollar and slightly larger losses against the euro.
For GBP/EUR, while the pound is clinging on close to the highs it reached at the start of summer, the past week has seen losses of around 1%. For anyone with a major transaction coming up, that must make one nervous that it is starting a general decline as happened this time last year, with a 7%-or-so drop. If that prospect does make you nervous, you can lock in today’s rate with a forward contract. Just call your trader on 020 7898 0541.
Looking back at yesterday, with a lack of high-impact UK data this week, the pound was buffeted lightly by data from the other side of the equation.
In the US, that was employment data that showed a falling availability of new jobs. ‘JOLTS’ job openings showed that there were 338,000 fewer jobs available in the US last month than expected. This sort of data suggests that the US Federal Reserve can now ease up on interest rate increases, and hence the dollar weakened.
For GBP/EUR, although sterling has lost 1% from its peak last week, it is still a good 4% above where it was languishing in the springtime.
There is a flurry of data coming out of the eurozone right now. This morning we heard that Spanish inflation has risen slightly, to 2.6%.
Later we will hear German inflation, which had been sparing the UK’s blushes by also being very high, at 6.2%. The expectation is that it will just fall slightly to 6%, but any serious departure from those expectations could see some movement in the pound-to-euro exchange rate.
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