Through yesterday we saw the worst GBP sell off of 2021, as global markets fell. Sterling is tied to stock markets and linked to risk appetite in the wider market, with the rise and fall of investor sentiment, the pound goes with it. Falling over 2% since a Wednesday high of 1.1696 against the euro and also over 2% against the dollar, the current price now sits below the key psychological level of 1.40.
A host of dollar data was released yesterday which did not help matters, as markets started to worry of easing of the Fed’s stimulus plans. Previously Jerome Powell, chair of the Fed, said that the plans could run into 2023.
In positive news for the pound, however, the UK government has reduced the Covid alert level from a 5 to a 4. Although this does not make for any immediate changes to the lockdown rules, it lays a good foundation for the eventual easing of lockdown restrictions. Something the market will be looking forward to.
Have a great weekend.
Jack Nicholls, Relationship Manager.
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