The pound’s bullish run, which saw rates hit yearly highs against the euro, appears to have taken a breather and be over for the time being. Opening the week around the 1.1650 mark to purchase euros and 1.3650 to purchase dollars at the time of writing, the rates have sunk as the pound falls out of the spotlight and attention turns to events further afield.
A flight back to the global haven currency has been apparent over the last week. Following on from the developments in the Middle East, the dollar naturally gains in periods of uncertainty where investors prefer to weather any potential storms. Likewise, the Japanese yen and Swiss francs are also currencies to sit on when there are periods of uncertainty, both gaining ground against the pound over the past week.
Covid concerns also linger globally, with New Zealand extending its snap lockdown due to an outbreak of the Delta variant on its shores. Worries are also present throughout the US and Asian economies, which could affect supply chains for the rest of the world. The economic calendar has little on the horizon for sterling, meaning price action will be driven by sentiment. A course which could see the pound meander through the working week, but as we know with global markets, things can change in a matter of minutes.
Have a great day.
Jack Nicholls, Senior Relationship Manager.
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