Good morning,

The pound continued its impressive rebound initiated last week, getting back to the 1.17 range against the euro and the 1.36 range against the dollar.

This is especially notable given the well reported fuel crisis, which is sparking renewed concerns over Brexit related labor shortages.

Fact of the matter is that markets pay far more attention to the base rate forecasts, which have been firming around several hikes in 2022. Last Thursday’s release of the latest UK GDP data also supported this scenario, and showed the economy grew more than previously assumed.

The assumption that the Bank of England will act sooner than its peers at the Federal Reserve and the European Central Bank has been a key driver supporting GBP.

In other currency news, the euro has once more dipped below the 1.16 key level, and is trading at 15-month lows.

Have a great day.

Author: Thomas De Caluwé, Relationship Manager.

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