Sterling benefitted from unexpectedly positive GDP numbers (plus a notably weaker US dollar) to end last week on a high. In just one week, GBP/USD gained almost two per cent while the euro also made gains against the US dollar.
The pound is still around its highest against the euro in more than a month. However, trading in this market has become markedly less predictable. With a key set of economic figures due to arrive this week, it is impossible to guarantee that sterling’s recent success will hold over the coming days.
To protect your budget from all this week has in store, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
The US dollar’s recent weakness has blindsided previously confident investors. The biggest contributor to this trend has been the belief that President Trump’s economic policies will prove harmful to the US economy. These fears only grew after US retail sales registered their largest monthly fall in the best part of two years.
Far from gloating, the pound faces up to the new week with a degree of anxiety. Wednesday’s inflation report is the headline event and markets will be watching closely to see if price increases have started to ramp again – something some economists are predicting.
Geopolitical events are providing a reminder of just how much a second Trump presidency will impact an already messy, fractured world. Vice president JD Vance used Friday’s Munich security conference as a platform to goad European leaders, who then spent the weekend scrambling to coordinate a defence policy without the implicit guarantee of American backing.
It’s hard to overstate how much this new transatlantic relationship could impact currencies. It now seems likely that Europe will have to dig deep to boost defence spending, which could hamper growth by siphoning funds away from investment in economic growth. An antagonistic relationship between two previously allied powerhouse regions is also a warning sign for future conflicts and division. Whatever happens, we’re here to help with everything you require.
