Sterling had looked to be on an upward trajectory over the past month, on Monday coming close to its strongest level, again, since the start of the year. However over the past 24 hours or so it has drifted against the euro and US dollar.
As pointed out by a number of analysts, the latest data on employment and earnings yesterday suggests that the Bank of England’s interest rate rises have done their job, slowing the economy and it can now pause its rate-rising policy and wait for the effects to kick in. Nothing is guaranteed, but if proved true it means that sterling may well have already seen its best position against the euro.
To lock in that rate, therefore, still around 1.5% better than last month, call your trader on 020 7898 0541.
There’s not a great deal to excite the markets this week, although Bank of England governor Andrew Bailey will be talking shortly to the British Chambers of Commerce and may give some hints on monetary policy. Then tomorrow his counterpart at the European Central Bank, Christine Lagarde, will be offering her own opinions and on Friday the US Federal Reserve’s chair Jerome Powell. So by the end of the week we should have a better understanding of how each stands.
Could this move the currency markets? It certainly did in December, when a similar scenario saw sterling lose 3% in the space of a few days.
However, it doesn’t sound like the most comfortable position to be in, waiting for the opinions of someone in Brussels and another in Washington before acting. So why not make that call to your trader today, at least to review your position.
