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Weekly roundup: Pound hits multi-month lows, but GDP impresses

currency-newsWeekly roundup: Pound hits multi-month lows, but GDP impresses
The pound tumbled against all of the majors last week thanks to renewed Brexit tensions. However, the currency did derive some support from tentative signs of recovery within the latest UK gross domestic product data.

July’s UK gross domestic product data showed evidence of the economy bouncing back from the depths of the Covid-19 recession, helping to put a floor under GBP exchange rate and stabilising the currency after a run of losses.

Although the recovery remains fragile at best, particularly with government support measures still yet to be withdrawn, the pound found some respite ahead of the weekend.

Increasing domestic pushback against the Internal Market bill, and its apparent violation of international law, also offered a rallying point to the weakened pound.

However, with the UK consumer price index forecast to show a monthly reading of -0.6% in August, GBP exchange rates could soon return to a downtrend.

Any dovish signals from the Bank of England (BoE) policy meeting on Thursday may also put pressure on the pound, even though no imminent action looks likely.

The lingering shadow of a potential no-deal Brexit scenario looks set to limit the upside potential of GBP exchange rates in the weeks ahead, meanwhile.
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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