By Luke Dyson
For the week to date we have seen sterling recover slightly against the euro; although not back to new highs territory as of yet, but making a slow and steady recovery on its way.
We saw the change of market structure earlier this week on Monday, following on from German PMI data.
With services PMI coming in with a disappointing level and manufacturing PMI at a questionable one, resulting in a weaker euro.
On the flip side, we saw UK service PMI significantly beat expectations, as the private sector recovered to a 6 month best.
For sterling to dollar we have seen quite an aggressive recovery in price since the start of 2025, with Trump’s new tariffs in place since the 3rd of March it’s boosted this rally further.
Although, this gain could be short lived as the tariffs are very inflationary and could cause a rise in costs very soon and so in turn resulting in a higher interest rate and stronger dollar down the line.
As of this morning we have had UK CPI data released, results coming in lower than expected for core CPI for year on year at 3.5%, down from 3.7% and CPI at 2.8% down from 3%. Both very good figures for consumer prices, however not very supportive of a stronger pound moving forward as interest rates are likely to be cut further.
Later today at 12:30pm we have chancellor Rachel Reeves’ Spring Statement.
Following on from the inflation figures ,it’s been said there will be some big changes made as the UK needs to move fast in this current war threat climate.
With large cuts on welfare spending and a £2.2 billion increase on defence spending, overall a lot of this data has not been positive for sterling and gives off a significant amount of uncertainty moving forward. However at present sterling is performing well and is perhaps a good buying opportunity against both the euro and dollar. If you have an up and coming currency requirement please get in touch with your currency consultant and consider these rates whilst they are here.