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Sterling went into reverse gear yesterday, weakening by half a cent against the US dollar and as much as 0.8% against the Japanese yen. This doesn’t appear to be based on any particular market data, more about a slightly decreased attitude to risk that is supporting the US dollar.
At least sterling was stable against the euro, despite Spanish inflation picking up unexpectedly. Inflation in Spain hit 2.8% year-on-year, above expectation of 2.6% and well up on last month’s 2.4%. It’s the highest since July and the fourth monthly rise in a row. Bad news for the European Central Bank and its interest rate cutting plan? We’ll hear German and eurozone inflation next week.
In business news, there was a jump of nearly a quarter in British people admitting not to have paid tax on their overseas assets in 2023-24, according to data from HMRC. The tax office was given the funding for an extra 5,000 compliance officers in the recent budget.
Trouble in the drinks industry on the eve of “Dry January” as the number of British pubs dropped below 39,000 for the first time, and Mexico reported that it has a 500-milion-litre tequila lake due to ebbing demand. A similar problem apparently faces Scottish whisky distillers.
If you’re intending to make your contribution to drying up that lake this evening, or even if you are not, we wish you a very happy New Year.
Make sure any upcoming transactions are protected against the risks of sudden market movements. Secure a fixed exchange rate now with a forward contract; call your Business Account manager on 020 3918 7255 to get started.
GBP: Pound suffers losses
There were losses of between 0.3% and 0.8% against major pairs yesterday, although against the euro the pound was relatively stable. Data releases don’t pick up until Thursday, with the Nationwide House Price index, and then mortgage approvals on Friday.
GBP/USD past year
EUR: Poor end to year for euro
It was a generally negative start to the week yesterday, with losses against the US, Canadian and Australian dollars and a hefty loss to the yen. There is no real data tomorrow, but Thursday perks up with final results for PMI and on Friday there is German unemployment.
EUR/USD past year
USD: Dollar heads in two directions
It was a mixed day for the dollar with gains against the pound, euro and Swiss franc. Coming later today will be house price data, with a steady 4.5% year-on-year increase expected. Don’t expect anything on New Years Day but on Thursday there will be the usual jobless claims numbers.
USD/GBP past year
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