The game of he said, she said between the United States and Iran has currency markets on the back foot heading into the weekend. President Trump on Thursday claimed Iran was “begging” to make a deal that would end the war, although both the Iranian government and oil markets didn’t appear to agree. The president’s decision to extend his ultimatum to reopen the strait of Hormuz was at least a small ray of light heading into Friday.
We just heard that sales in Britain’s retail sector fell by 0.4% in February from the previous month, which was actually a slightly less extreme fall than expected. That news came after the Organisation for Economic Co-operation and Development (OECD) yesterday issued a stark warning for the UK economy.
According to the OECD, Britain will suffer a larger economic hit than any other G20 nation should the war drag on. This nightmare scenario would send inflation back above 4% and leave the Bank of England in an unenviable bind.
In truth, the effect is already being felt in offices, supermarkets and shops up and down the country. February’s inflation report – which was unchanged from the month prior at 3% – quickly became old news. What matters more than anything is fresh data from March and how this could move the dial for the Bank of England.
The pound has ranged by only around half a cent against the euro this week. Most of the more volatile action has been against traditional safe-havens like the US dollar. As of Friday morning, the sterling to US dollar rate is essentially back to where it started the week, but having moved by two cents this week, there is a good chance of more turmoil today.
NS&I (National Savings & Investments) customers will be owed millions of pounds after the government-backed institution misplaced almost £500mn in customer savings. NS&I’s chief executive, Dax Harkins, resigned yesterday as it emerged the Treasury was working to external experts to calculate compensation.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract or call your account manager on 020 7898 0541 to get started.
