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Sterling stayed strong yesterday, returning close to Wednesday’s highs against the euro and exceeding them against the US dollar.
The pound is now 10% stronger against the dollar than this time last year. Sterling has been strengthening on the back of stocks – they usually move in tandem – as the S&P 500 hit yet another record.
The FTSE also strengthened after hopes rose of an economic stimulus in China, and the US economy was confirmed as growing at 3% per year. However, the FTSE has been pegged back by falling oil company stocks, as Saudi Arabia abandoned a hope to curb production until the oil price hits $100 per barrel.
While the US economy grows, Germany’s looks to be shrinking. The Joint Economic Forecast Project Group believes that Germany’s GDP will decline by 0.1% during 2024.
Several central bankers were speaking yesterday, and most were supporting continued large interest rate cuts. Markets are pricing another 50 basis point rate cut from the US Federal Reserve in November at 61%.
European Central Bank (ECB) chief Christine Lagarde was also speaking, but refusing to answer calls from Italian ministers to cut more quickly. ECB policymakers have been clear on having no particular path right now, but seeing where the data takes them.
In UK business, Rightmove rejected a £6million takeover offer from the Australian REA group. Rightmove has 86% of the UK house search market.
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 account manager on 020 3918 7255 to get started.
GBP: Pound returns to heights
After a brief dip on Wednesday, the pound bounced back up to those 2½ year highs yesterday. There isn’t a great deal of data coming down the wire today, but next week starts with a final result for quarterly GDP and some data on mortgages approvals, which are expected to have continued to improve.
GBP/USD past year
EUR: Mixed fortunes for euro
It was a mixed day for the euro yesterday, with losses against sterling and the Australian dollar but close to 0.5% growth against the US dollar.
EUR/USD past year
USD: Dollar weakens again
It was all downhill for the dollar again yesterday, with between 0.5% and 1% drops against some major rivals. Later today we’ll be getting a report that measures underlying inflation – the US core PCE price index – plus data on personal spending, which is expected to have fallen in August.
USD/GBP past year
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