Sterling falters despite improved retail sales figures

By Simon Eastman

Last week the pound started the week stable against its major competitors, but ended the week sliding dramatically across the board. Most notably against the USD which gained nearly three percent as it rallied, moving off the back of hawkish comments from Federal Reserve members, including President Thomas Barkin, who said the FED will do what it takes to return inflation to target, but that this wont happen immediately, indicating further interest rate hikes will be coming.


Sterling on the other hand is under continued pressure as a recession looms and the cost of living crisis dominates headlines. Retails sales beat expectations last week, but did little to help, as the GfK consumer sentiment survey dropped to its lowest level since 1974.


Those who have not secured their currency before the rout at the end of last week may be prudent to jump in sooner rather than later, in case the slide continues. Sentiment seems to be well away from the pound now and the outlook is looking increasingly gloomy and the week ahead has virtually no UK data releases.


The Week Ahead


Tuesday – Australian, German and EU, UK and US services and manufacturing PMI, US new home sales and EU consumer confidence.


Wednesday – US durable goods orders, pending home sales and NZ retail sales


Thursday – German GDP, German IFO business climate, current assessment and expectations data, ECB monetary policy meeting, US GDP, US jobless claims, Jackson Hole Symposium (an annual meeting held by the FED).


Friday – German  GfK consumer sentiment survey, US personal expenditure, income and spending data, Jackson Hole symposium including Fed Chair Jerome Powell speech and US Michigan consumer sentiment index.


Plenty of data to move markets, especially from the Jackson Hole symposium to further buoy the “in favour” US Dollar. Will we see further gains as the week goes on? Anyone with a currency transfer coming up give one of the team a call to discuss the options available and discuss the best way to navigate the ever changing markets.