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 was unable to hold its ground for long, with the first drop in the pound coming in the wake of the UK’s latest jobs report.
While June’s release reported a surprise drop in unemployment and another surge in wage growth, they were largely dismissed by traders, amidst concerns the end of the government’s furlough scheme next month will reverse the progress made in the labour market in recent months.
GBP exchange rates then came under additional pressure in mid-week trade with the release of the UK’s latest consumer price index, which revealed inflation cooled more than expected last month.
Alongside a worrying rise in domestic coronavirus cases, this appeared to dampen the prospect of the Bank of England (BoE) and sent the pound plummeting through the second half of the week.
Capping off the week was the release of the UK’s latest retail sales figures, in which a surprise contraction of sales growth last month drove GBP exchange rates even lower.
Despite some disappointing PMI figures, the pound has so far gotten off to stronger start this week, rallying from last week’s lows amidst improving market sentiment.
However, it remains to be seen if Sterling can sustain these gains for long, especially amidst concerns over the UK’s rise in coronavirus cases.
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)