Following a busy week just gone, where central banks from the US, UK and the Eurozone met to discuss their policy for their respective economies, it was clear there was one winning currency – the euro. Pushing GBP/EUR back from 2-year highs, the rate now finds itself sitting in the low 1.18’s after the pound opened slightly stronger this morning. Against the dollar the euro has also strengthened, lifting the rate from multi month lows and away from the 1.11 marker and gaining nearly 3% at current market rate. This is even despite a bumper Non-farm payroll figure coming from the US for January, coming in well above expectation.
With Governor Andrew Bailey at the Bank of England giving a sombre update to the bank’s forecast for the years ahead, it leaves the pound searching for positive news. The economic calendar is looking scarce for the UK this week until Friday, where GDP figures are released. Pound traders will be hoping for a positive outcome from the readings for the end of 2021 to breathe some life into the currency and reverse the current trend.
In the political world there is little to help sterling either. Following a series of resignations from those close to the Prime Minister at the tail end of last week, Boris Johnson has made new senior appointments to fill the gaps left. After a handful of Tory MPs submitted letters of no confidence in the PM following the initial findings from the Sue Gray report, the current Government will be looking to steady the ship through the course of the week.
Have a great day.
Author: Jack Nicholls, Senior Relationship Manager.
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