The pound collapsed on Friday as markets were rattled by the contents of UK Chancellor Kwasi Kwarteng’s mini-budget.
In the first half of the week Sterling traded sideways amidst a warning that hundreds of thousands of small businesses in the UK may be at risk of going under due to rising costs.
The middle of the week then saw the pound stumble as observers speculated on the future of Prime Minister Boris Johnson, amidst reports that Rebel Conservative MPs might have enough support to trigger a no-confidence vote.
This then gave way to a sharp downturn in GBP exchange rates through the second half of the week as the closure of UK markets for the extended Jubilee weekend resulted in thin-trading conditions in the pound.
This week will likely see the focus remain primarily on UK political developments following the news that a vote of no confidence in Boris Johnson will be held on Monday.
If the PM survives the vote this could help to strengthen the pound as Johnson will be safe from another vote for a year.
On the other hand, should Johnson lose the vote the resulting political uncertainty could trigger some major volatility in Sterling this week.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)