By Ashley Finill
We are at the mid-point of the trading week and thus far we have seen Sterling fall over a cent on the Euro already. Although the UK has posted some positive economic figures as of late, it has not aided in providing the pound with a push against the Euro and early signs show that the stability Sterling had over the past few weeks seems to have fallen away. This drop of for Sterling could be due to The EU vaccine rollout which has been reported this week to have accelerated at some pace and as a result the Euro has been in a bullish state against the majors. As we already know the UK has had an impressive vaccine rollout over the past few months somewhat putting the EU to shame which put Sterling in a strong position against the Euro gaining nearly 6 cents since the vaccine programme commence in the UK. However, now with this news of a EU vaccine programme turnaround with doses being administered at a faster pace we may now see a twist of fortune on the currency front too. Although GBP is currently still at 2 month highs on the Euro these gains may be scuppered over the coming days/weeks. Should you have a GBP/EUR requirement it may be prudent to start assessing your options, we have a few currency contracts which can alleviate the risk and your exposure to the uncertain currency market. Speak to your account manager today on what these are.
Brexit Trading Backlash
Some news regarding further Brexit backlash with the UK’s and the EU diminishing relationship as yesterday the telegraph reported that China has replaced Germany as the UK’s biggest import market. Although this may be due to most of the PPE coming in from China it bears a warning going forward that the ongoing relationship with the EU may be strained. It’s reported that trade with the EU fell 23% from 2018, the downfall has been linked to both Brexit and Covid saga’s With the UK seeking more international trade this could be a sign of things to come as trading with the EU is proving to be difficult with more paperwork needed for imports/exports since the UK left the EU causing delays over the channel.
Little data out for the remainder of the week
For the rest of the week there is only a couple bits notable data coming out from the US tomorrow. Durable goods order will be posted at 1.30pm along with gross domestic product. With market sentiment being heavily led by the coronavirus most data released during this period is having little affect on the currency exchange rates. With the uncertainty of the virus and the potential of further lockdowns and variants appearing the market remains in a highly volatile and unpredictable. Should you have a currency requirement and are looking to minimize the risk of your budget being eaten into then it may be an idea to speak to the team to assess your options with some friendly guidance.