A similar story to last week as we enter a new week with the pound opening today on the backfoot. Now trading in the 1.16’s and 1.22’ versus the euro and the dollar respectively.
Following last week’s downbeat Bank of England outlook, the UK is potentially facing double digit inflation and a recession in to the start of 2023. Traders globally have struggled to see the value in sterling, resulting in the sell off we are currently seeing with a diminishing chance of further rate hikes throughout the course of the year. On the other hand, the Fed is much more bullish with further hikes planned for the last half of the year. Non-farm payroll figures released in the US Friday also showed a strong growth in the employment market within the states.
Today and tomorrow’s economic calendar offers little to the pound for relief of the current sell off. Wednesday will see inflation data from the US, which the Fed previously spoke of and mentioned they were expecting to take inflation as an average over a period of years. Thursday will see the UK release a host of manufacturing and output data – currency buyers will be hoping for some positive news to reverse the current trend.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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