Sterling hit the high notes yesterday, reaching its strongest point against the euro since August last year. Indeed, it is stronger than a month ago, five years ago and even 1.5% stronger than 10 years ago, long before the Brexit vote.
The cause for sterling’s boost yesterday wasn’t entirely positive, as the employment data yesterday revealed that the British people are gaining inflationary wage increases even while unemployment reaches 4%, its highest rate for 18 months.
Against the US dollar sterling also reached its strongest of 2023 and indeed all the way back to spring 2022. However, here the long term picture is worse, with GBP/USD nearly 15% down on 10 years ago.
The current position of sterling against the euro doesn’t give any indication of long-term strength and it will be tested tomorrow when we hear the latest news on GDP. It is expected to dip into ‘negative growth’, as the economists term it, with a potential effect of weakening sterling.
To lock in today’s 2023 high with a forward contract, therefore, do call your trader on 020 7898 0541.
