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Weekly roundup: Pound stumbles in spite of positive data

currency-newsWeekly roundup: Pound stumbles in spite of positive data
The pound initially appeared to be in a strong position last week, with the currency firming through the start of the session, amidst an upbeat market mood.

This upside was reinforced by the release of the UK’s latest jobs report, which revealed domestic unemployment fell to an 11-month low in July.

However, some uncertainty surrounding Boris Johnson’s cabinet reshuffle then weakened GBP exchange rates in the mid-week, overshadowing the UK’s consumer price index, in spite of revealing that inflation soared to a nine-year high last month.

Concerns over surging UK energy prices, coupled with a shock contraction in UK retail sales then saw the pound remain pressured through the latter half of the week.

So far this week, the Sterling selling bias looks to remain firmly entrenched amidst growing concern over the UK’s energy price crisis, as GBP investors fear it could further stymie the UK’s economic recovery through the last quarter of 2021.

Still to come for GBP investors this week is the Bank of England’s (BoE) latest interest rate decision.

No policy changes are expected from the bank this month, leaving the focus to be on the bank’s forward guidance. Will the BoE maintain its hawkish outlook, or will the growing number of hurdles facing the UK economic recovery result in a more dovish stance, and send the pound lower?
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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