The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
However, Sterling sentiment quickly improved on the back of the UK’s latest consumer price index, which reported inflation surged to 2.5% in June, stoking speculation over whether this could prompt the Bank of England (BoE) to start tightening its monetary policy.
An underwhelming UK jobs report, then briefly put some pressure on GBP exchange rates again after reporting a shock rise in unemployment in May, before the pound began to race higher again on the back of some hawkish comments from BoE policymaker Michael Saunders, who suggested that the bank might soon begin tapering discussion, in addition to hinting at the possibility of early rate hikes.
But these gains would again prove to be short lived, with Sterling faltering again at the end of last week’s session after England's chief medical officer, Prof Chris Whitty, warned that coronavirus hospitalisations could reach ‘scary numbers’ in the coming months.
So far this week we have witnessed a sharp slump in the pound as the continued rise in UK coronavirus cases has cast doubts over the sustainability of England’s reopening.
This downtrend may remain entrenched until the end of this week’s session and the publication of the UK’s latest PMI figures, which are expected to report another robust expansion in the private sector this month, potentially reviving GBP demand.
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)