The pound saw a roadblock yesterday, after reaching near the 1.4180 mark against the US dollar. After holding just short of that mark through Monday and Tuesday, there was a 0.75% sell off during trading yesterday. Early in the morning, the UK released figures to show the economy had shrunk by 1.5% through the first quarter of 2021. As mentioned in yesterday’s update, the release came to little surprise with the UK going through the third lockdown in a year. With non-essential shops, bars and restaurants all closed throughout the period, consumers were left with only online sites to spend their cash.
Against the euro, the pound saw a slight sell off this morning but still remains above the key 1.16 mark. With nothing on the horizon today for European data, sentiment will likely guide prices.
Over in the US there has been a shift in tone from the Fed. After reiterating their expectancy to keep rates low for a few years, the economic bounce back appears to be happening quicker than expected. With subtle hints to even an openness to a change in stance, markets could prepare to see interest rates increase quicker than expected.
Have a great day.
Jack Nicholls, Relationship Manager.
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