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Weekly Roundup: Pound climbs as UK data beats forecasts

currency-newsWeekly Roundup: Pound climbs as UK data beats forecasts
Sterling wobbled at the start of the week amid a shifting market mood and a lack of UK economic data.

Tuesday then saw the pound surge higher as the UK’s latest labour market report surprised to the upside. The country’s unemployment rate unexpectedly fell to a 48-year low of 3.7%, while average earnings (including bonuses) jumped by 7%.

However, the pound then pared these gains after the UK’s latest CPI spooked GBP investors. UK inflation jumped to a 40-year high of 9%, fuelling fears over the UK’s cost-of-living crisis.

Nevertheless, GBP exchange rates finished the week on a positive note. UK manufacturers reported strong orders growth, which was then followed by an upbeat retail sales report. In April, UK retail sales rose by 1.4%, smashing expectations of a 0.2% contraction.

Sterling is mixed so far this week, with a cheery mood among European investors offset by domestic UK concerns, such as the potential political fallout from the ‘partygate’ report.

The report on lockdown-law-breaking parties at No 10 Downing Street is set to be published this week, now that the Metropolitan Police has concluded its investigation.

Depending on the contents of the report, Boris Johnson could find is premiership in jeopardy once again.

On Tuesday, the flash PMIs are in focus. Will the surveys show the economic impact of the cost-of-living crisis, or could they reveal surprising resilience?
Philip McHugh

Philip McHugh

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)

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