By Simon Eastman
We saw the pound rally across its major peers yesterday as risk appetite in investors is slowly increasing.
We have seen stocks improve which is a sure sign of more buoyant risk appetite, that has seen the riskier pound benefit against its more risk averse favoured US counterparty. This saw GBP/EUR move up nearly a cent pushing through resistance ceilings and a two week high on cable (GBP-USD) as the dollar sell off saw the pound gain a cent and a half at the peak.
These rates for buying euros are testing those peaks we saw earlier in the year, which for those following markets, will know, we have only seen rate better once. This was when the Bank of England raised interest rates inn February and we saw a swift three cent sell off shortly after. So those out there with a purchase coming up in the coming months, may be prudent to take advantage whilst the going is good. It doesn’t take much to knock sentiment and with the Russian invasion of Ukraine now into its second month, uncertainty is still very much a factor to consider.
Eco stats were not favourable for the pound, so it was a good job traders paid little attention to the public sector borrowing figure released yesterday morning, which showed an expectation of £7.86 billion, up from last month’s negative £7.83 billion, which actually came out at a staggering £12.348 billion in February!
Today eyes might pay a little more attention to data released, as the UK welcomes inflation figures, with any dramatic increases likely to give rise to interest rate hike debate. Rishi Sunak gives his spring budget in the commons, whilst Fed Chairman Powell gives a speech after lunch.
Should be an interesting day so keep in touch with your dedicated consultant for some friendly guidance.