020 7898 0500
The pound is currently 0.34% up on the euro and 1.6% higher on the US dollar
Following Friday’s advances, sterling strides into a new week over 0.6% higher than this time last Monday against the euro and a whopping 1.34% against the US dollar.
The pound is currently the top-performing G10 currency of 2024 due to minor pullbacks for the US dollar as expectations continue to rise for a September interest rate cut at the Federal Reserve.
On Friday, we heard the UK economy expanded 0.4% in June, doubling market expectations.
On Saturday, there was an assassination attempt on Donald Trump at a presidential campaign rally. The former president was evacuated safely; however, one civilian was killed and another two critically injured.
President Biden called on Americans to “lower the temperature in our politics” following the attack.
This morning in Asia, Bitcoin surged above $62,000 close to a two-week high as investors speculated about the chances of Trump winning the November election. Trump’s support surged following the failed assassination attempt.
Property website Rightmove reported that the number of agreed UK house sales over the past month was up 15% on this time last year. Rightmove said this was “encouraging” and suggested homebuyers likely shrugged off the “distractions” of the Euros 2024 and the general election.
In terms of economic releases, here’s what to look out for this week…
There are several speeches this week by Fed officials, including chair, Jerome Powell this evening which is highly anticipated.
US releases will include retail sales, industrial production, import and export prices, building permits and housing starts.
In the UK, this week holds June’s inflation rate, unemployment figures, GfK consumer confidence and retail sales.
Euro investors will have their eyes on Germany’s ZEW economic sentiment tomorrow and the European Central Bank on Thursday for an interest rate decision, press conference and following speech from president, Lagarde. More on that below.
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: Data-dependent pound
After last week’s strong momentum against the euro, the pound’s position remains dependent on this week’s inflation and wage figures. If supportive, the pound could continue to climb, however, should market forecasts be undershot, the pound could slip. To manage your exposure to this risk, talk to your account manager today.
GBP/USD: the past year
EUR: Interest rate expected to stay put
This week, the European Central Bank policymakers will vote on monetary policy. Following June’s 25-basis point decrease, Bank members remain determined to bring inflation back down to the target of 2.0%, however, it is stressed that it will maintain a data-dependent strategy. Current forecasts expect policymakers to keep the rate unchanged in July at 4.25%.
GBP/EUR: the past year
USD: Over 2% down on sterling this month
Last week’s sterling strength was detrimental to the US dollar, which lost over half a per cent on Friday, taking its monthly losses to over 2%. The US dollar is currently 1.6% lower against the euro this month, but support has picked up again this morning.
USD/EUR: the past year
For more on currencies and currency risk management strategies, please get in touch with your Smart Currency Business account manager on 020 7898 0500 or your personal account manager on 020 7898 0541.
