While the UK enjoyed four days of street parties and beer tents for the Jubilee, sterling obviously didn’t get the memo about pride in Britain and weakened to a three-week low against the euro and a two-week low against the US dollar.
However, it has been boosted this morning, possibly by the surprise news of a confidence vote on Boris Johnson’s leadership today.
There was no data from the GBP side during the two Bank Holidays, but plenty in the US and eurozone, and much of it supported the possibility of interest rate hikes.
Germany’s balance of trade surplus hit its lowest since 1992, but there was a mixed picture for US industrial data, with non-farm payrolls beating expectations.
There are no big economic data releases scheduled this week (inflation, GDP etc) but plenty of intriguing clues to consumer activity, including new car sales today, which showed the worst May figures for 30 years. Tomorrow it’s retail sales and on Wednesday house price data.
Of greater interest will be the European Central Bank’s interest rate decision on Thursday, where record inflation may well force the reluctant hand of interest rate setters to increase rates.
For anyone planning a property viewing trip to Europe, I imagine that of more pressing interest than exchange rates is whether you can get away at all, given the parlous state of airlines today.
However, there are severe risks for sterling right now and mitigating them in advance could save you thousands, so why wait, or take a quite unnecessary risk?
Against the euro, sterling remains stronger than this time last year and several percentage points above the average of the past five years. Well worth locking in with a forward contract with a call to your trader on 020 8108 5163.
