The pound starts the week still with no recovery in sight after the past week where it fell against EUR and USD by around 2%.
Against the euro at least it has only returned to the levels of early October, so hardly a catastrophic reversal. You can still get around 5% more euros for your pounds than this time last year and 3% more than the 5-year average.
It’s a similar pattern against the US dollar too, but for those with a trade coming up, losing out on the over-$1.40 rates available over the early summer may feel painful.
“Loss aversion” is that strange mental quirk where we feel the loss of losing out on a brilliant rate more than enjoying the benefit of also missing the truly dreadful rates.
Today’s GBP/EUR is still excellent in terms of recent history and well worth considering locking in with a forward contract via a call to your trader on 020 8108 5337.
The reason for the rapid rise and fall in sterling over the past month is entirely down to speculation over interest rates. Having been led up to the top of the hill and then down again looking a little sheepish, currency traders may be looking more closely at the data for the next month or two for more accurate clues.
The Bank’s interest rate setters say they are looking for clearer data on economic performance post-furlough before committing to changing monetary policy. Do follow our daily currency notes where we keep you up to date on those. You could do that with a quick email to your trader, or for registering for an account if you haven’t done so yet, via the button below.
For this week’s big news we will have to wait for GDP and industrial and manufacturing data on Thursday morning.
