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The pound sterling remains strong against its major rivals this week
Sterling heads into Bank Holiday weekend 0.3% higher against the US dollar and the euro on the week, benefiting from dovish messaging from the Federal Reserve and a lack of market-moving euro area data.
UK local elections took place yesterday and the results are already pouring in. Results from most councils are expected by the end of the day, while the first mayoral results will be announced around midday. Investors will be keeping their eyes on the pound should it be impacted.
If you have any currency requirements before the Bank Holiday, speak to your account manager today on 020 7898 0500.
Former prime minister Boris Johnson was turned away from his polling station in South Oxfordshire after forgetting his photo ID – a voter identification rule he brought into government.
Following the US central bank’s decision to hold rates at 5.25-5.5% in its latest meeting, Fed chair Jerome Powell erased market expectations of a rate hike in June, as previously anticipated.
US labour costs rose more than expected at an annualised 4.7% in the first quarter of 2024. This was above expectations of a 3.6% gain and follows an unchanged result in the previous period.
On Thursday, Apple released its earnings report which revealed a 10% drop in iPhone sales compared with the same period last year. However, the company still beat Wall Street’s expectations.
Yesterday, Canada reported an unexpected trade deficit of C$2.3 billion in March 2024, against forecasts of C$1.5 billion and contrasting a surplus of C$0.5billion in February. This was the first monthly trade gap since December and the largest the North American economy has reported since last June.
The Organisation for Economic Cooperation and Development (OECD) forecast that the UK will be the worst-performing economy in the G7 next year, as high interest rates and the lingering effects of last year’s inflation surge weigh on the currency.
This morning, the poll of services purchasing managers in the UK is expected to expand to 53.1, which would mark the sixth consecutive month of expansion for the sector and the strongest in almost a 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 Private Client Account Manager on 020 7898 0541.
GBP: Eyes on politics
Following Liz Truss’s disastrous mini-budget, UK politics have become a bit of a concern for pound sterling. Any change in Westminster has the potential to impact the pound, but as we well know, the markets are ever-changing and inherently volatile, so if you have a transfer coming up, speak to your account manager today.
GBP/USD: the past year
EUR: Little movement against the dollar
Despite seesawing this week, the euro heads into the Bank Holiday weekend largely unchanged against the US dollar compared to this time last week.
GBP/EUR: the past year
USD: Data, data and more data
US data came in hot and heavy yesterday as the trade deficit remained almost unchanged in March 2024, hovering close to a 10-month high. US unemployment claims held at a two-month low in the final week of April and US factory orders rose for the second consecutive month.
EUR/USD: 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 Private Client Account Manager on 020 7898 0541.
