By James Caley
Last week kicked off with a relatively subdued performance for Sterling against the Euro, but witnessed a mid-week surge, nearly reaching a monthly peak. However, this momentum was short-lived as Sterling retreated on Friday afternoon, reverting to its lowest level in a week.
Conversely, the dollar initially displayed resilience following the Federal Reserve’s decision to maintain interest rates, only to plunge after the release of lower-than-expected Non-Farm Payrolls data. Remarkably, the dollar recovered within an hour of this news and continued to strengthen after the week on a high against the pound – not great news for those who left their Dollar buys to the end of the week.
Looking Ahead
Today marks VE Day, leading to closures in some European banks. If you’re awaiting payments in France, it’s advisable to check back in when the banks reopen. Additionally, tomorrow is Ascension Day, a public holiday in some European countries, potentially causing delays in currency payments.
While the beginning of the week appears quiet in terms of economic data, it may soon become eventful, presenting uncertainty for holders of Sterling. The looming Bank of England interest rate decision on Thursday is our focal point. While economists largely predict no change, any unexpected deviation could significantly impact the pound’s strength, potentially affecting purchasing power for those looking to buy Euros, Dollars, or other major currencies.
On Friday, the UK’s quarterly GDP figures are likely to influence the pound’s performance. A stronger-than-expected result could strengthen the pound, while an underperformance is likely to have the opposite effect.
For those concerned about adverse market movements, our team of currency consultants is available to assist. Whether you seek risk mitigation strategies or ways to optimise your Sterling holdings, a conversation with your account manager can provide tailored solutions to meet your needs.
Notable Data out this week
Tuesday
RBA interest rate decision
VE Day – Banks Closed
Wednesday
Ascension Day – Banks Closed
Thursday
BoE interest rate decision followed by Andrew Bailey’s speech – Consensus: no change at 5.25% with a view to reduce rates later in the year
Friday
GB Gross Domestic Product QoQ & YoY
Canada – Net Change in Employment / Unemployment Rate
US Michigan Consumer Sentiment Index