Good morning,
Despite an unforeseen sell off throughout the morning on Friday, the pound has bounced back to recover most of the losses seen. Analysts are struggling to put their finger on exactly why it came about with no particular reasoning as to why the sell off occurred. This leads to the answer of typical profit taking within the market being the motive, where large institutions sell the asset once their desired level has been achieved. Currently the market rate is 1.1680 against the euro, which is where we entered Friday morning at. Since this time last week, we have seen GBPEUR trade within a narrow range of just over 70 pips, with many hoping for a push higher to break through the 1.17 level, which has not been seen in over a year.
Andrew Bailey was speaking to BBC Radio 4 this morning, where he reiterated his confident view for the remainder of the year for the UK economy. The Chair of the Bank of England highlighted his positivity for the recovery following the Covid impacts despite giving obvious caution for the path ahead, something which is being echoed from the previous Monetary Policy Committee meeting last month. Another highlight from the interview is where he went on to say inflation is expected to pick up towards the target level of 2% over the next months, as the country comes out of the third lockdown and the public begins to spend again.
Have a great day.
Jack Nicholls, Relationship Manager.
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