By Luke Dyson
For the week to date we have seen sterling hold its ground against the euro, with it still trading in a 1 cent rangebound market towards the top of the current market range. Which is very positive given the current situation with inflation bordering 10% in the UK, the fuel and energy crisis but also unemployment figures being worse than expected recently.
For Sterling-Dollar we have seen a drastic recovery with sterling making a multiple cent jump since market open on Sunday night, this sudden strength for sterling to maintain against the euro but also make gains on the dollar is off the back of Andrew Bailey’s announcement earlier this week.
It was stated that a 50 basis point rate hike will indeed be very likely in August, although not 100% confirmed this has given sterling the boost it has needed to generate a solid foundation for further gains in the near future.
The Bank of England has also come forward and mentioned they will be releasing a strategy to sell Gilts in the region of 50BN-100BN in the next 12 months.
Although sterling is holding its ground against the euro we did see a temporary sharp drop yesterday following the ECB announcing they may look to raise interest rates by 50 basis points instead of the 25 initially proposed. this will be finalised on Thursday at the ECB interest rate decision. Depending on the outcome we could see sterling drop against the euro if hiked by 50BP.
If you have have an up and coming currency requirement please get in touch to discuss a strategy and take advantage of sterling’s current strength, this could be very short lived with the state of the UK’s current financial situation but also the European central Bank’s rate hike vote.