A nervy day for sterling saw it lose close to half a cent against the euro soon after midday, before recovering most of the losses by the end of the afternoon.
On the other hand, it was all positive against the US dollar, with a gain of 1% on the day taking GBP/USD to around 3% stronger since the start of June.
So far this morning there has been some upward movement in sterling against both USD and EUR.
The prompt for the drop in value against the euro yesterday was the decision by the European Central Bank (ECB) to raise its headline interest rate by 0.25% to 4%, its highest level since 2001. There is more of that to come, said ECB President Christine Lagarde, with a further rise expected in July at least.
This is compared to the US Federal Reserve (“The Fed”) which kept rates on hold when they met earlier in the week. On the sterling side of the equation, there are strong hopes (for the markets, if not householders) that the Bank of England (BoE) will follow the lead of the ECB next week.
In business news, Foxconn, the company that manufactures around half of Apple’s products, has moved some production from China to the US as part of its “business continuity planning”. Boss of Foxconn Young Liu told the BBC that some overseas clients had pushed to move production out of China.
Next week will be exceptionally busy for data and events in the UK, with an interest rate decision and inflation data, so make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Personal Trader on 020 7898 0541 to get started.
