By Grace Smyth
Last week saw a fairly volatile market as investor sentiment had caused a downturn for Sterling over concerns surrounding the Delta variant and the sharp rise in new covid cases in the UK, as well as various news reports of retailers having to close stores due to their workforce being stuck in isolation. Markets dropped almost a cent, not the best news for those looking to buy euros but was a welcomed relief for those looking to sell. The dip in rates was short lived though, and Sterling has managed to recover back, likely down to mounting covid concerns in the eurozone and the fact that there had been no changes made to its monetary policy.
There’s lots going on in the week ahead to keep us on our toes with the focus mainly over in the US. The biggest potential market movement event is on Thursday with the Fed rate meeting. Back in June there was great optimism for US recovery with talk of tapering which gave the US Dollar a good boost of investor confidence but given the recent rise in new covid cases it could be argued that a recovery could take longer than initially anticipated so further discussion on tapering during this months Fed meeting could be limited. If we see a new change of tone from the Fed then we may well see a shift for USD.
US consumer confidence on Tuesday could also cause a stir. The last set of figures were positive however if recent retails sale figures are any indicator we could see a small rebound this month as spending patterns continue to shift up and down. GDP is also set to be positive this month. The last 3 sets of GDP figures have all been good and this months is set to carry in the trend with markets expecting a figure of 8.6% from the previous 6.4%.
These last 18 months have been difficult for everyone and with vaccines rollouts seemingly successful, it would be great to think things are beginning to get better, however the rise is new covid cases is a stark warning that things are still largely uncertain and market sentiment is likely to continue to control exchange rates.
As ever, if you have an upcoming requirement for international transfer then do get in touch with the team for guidance on how to best secure your transfers to maximise your return. Our team can offer a number of contracts for help you manage your exposure to suit your needs, so do give us a call to discuss your options.