There were small falls against the US dollar (and others) and a small rise against the euro yesterday, as the currency markets wait for firmer clues on where interest rates will go – essentially how far and how fast the Bank of England and US Federal Reserve will be cutting in their two more interest rate decisions before Christmas.
For the UK there is a lot of data coming down the line over the next week, with GDP, Inflation and employment – the big three in the data world. So, the pound may well be in a different place by next Wednesday.
Last week the pound had its biggest one-day fall in 18 months following comments from the Bank of England governor. GBP/EUR has slowly clambered back up again, close to its strongest, but the risk remains. Sterling tends to rise slowly and fall quickly, so to protect your money from those falls, fix your rate with a forward contract.
If we needed a metaphor for the economic and political look of the world on 9th October 2024, there is a category 5 one currently bearing down on the west coast of Florida.
At a political level, the governor of the Bank of England has said he is very concerned about events between Iran and Israel, while on the economy the markets in the UK are concerned with the chancellor Rachel Reeves’ budget at the end of October.
If you are looking to make your escape to the Continent, call your account manager on 020 7898 0541 to talk through your plans.
You can read more about Rachel Reeves and what her budget might mean for your currency transactions (as well as the small matter of the US election) in our latest Quarterly Forecast from tomorrow. Keep your eyes fixed on your inbox to learn how all this could affect your own budget before the year is out.
