By Grace Smyth
This week we have seen the Pound make some nice gains against the Euro and USD, and with no major significant economic events out to cause the uplift its likely down to a combination of things. The UK has paved the way with the vaccine rollout with those aged 18+ now being able to receive the vaccine, no scary rises in hospital admissions and the new positive sentiment surrounding the easing of restrictions in July; all giving sterling a boost particularly against the Euro pushing rate back to highs not seen since March.
Against the Dollar we have seen rate fall from the highs in May and early June. The Dollar has gained back confidence after the Fed suggested interest rate rises may happen sooner then initially expected. Although not the best news for those looking to buy USD, it has come as a relief for our USD sellers looking to repatriate funds back to the UK.
Today there are a few data release out to note. Eurozone Markit Services and Manufacturing PMI out first thing at 9am, followed by the UK half an hour later. Eurozone Markit PMI is expected to improve and if results match expectation we could see some gains. The UK has projected Services PMI to retract slightly, so any change here could also cause some market movements so again worth keeping an eye on. This afternoon Canada release their retail sales figures at lunch time and the US also post Services and Manufacturing PMI this afternoon at 14:45.
Tomorrow’s data releases are more likely to cause a stir though as the Bank of England shares its latest monetary policy statement. Previously the Bank signalled no interest rises before 2023 but will they follow the Fed and hint at possible changes to this? Albeit worth noting the change may not be as positive as our US friends.
The UK is still under a fair amount of strain and we do need to be careful to not get caught up in thinking the rates will continue to improve. Our eurozone neighbours are catching up to us with vaccines rollouts improving and restrictions easing. A large contributing factor holding Sterling back is the limitation on travel with many countries still on the red and amber list. Travel is an import driver for economic growth and the lack of it is likely going to hold the pound in limbo.
Lots to keep on top of and if you have an upcoming requirement do get in touch with us to be kept informed of any market movements which could affect your transfers. We do offer a number of ways to help you secure your funds so speak to one of our friendly team to see if any of our contract options might be suitable for you.