The pound initially opened last week’s session on stable footing as GBP investors welcomed Scotland’s lifting of its remaining coronavirus restrictions.
Through the first half of the week, this souring market mood was primarily driven by coronavirus concerns, as the rapid spread of the Delta variant in many parts of the world, stoked concerns over the global economic recovery.
However, the risk-off trend accelerated sharply on Wednesday, following the publication of the minutes from the Federal Reserve’s latest policy meeting.
These revealed that policymakers have begun formal discussions regarding the tapering of the Fed’s bond purchases, with the possibility of the Fed withdrawing some of its pandemic-era stimulus measures compounded concerns over the global economy and resulted in the market mood souring further.
So far this week we have seen the US dollar give back a good portion of the previous session’s gains.
This comes as investors dial back their expectations for this week’s Jackson Hole symposium, with some dovish comments from a Fed policymaker appearing to have erased any hope the Fed could use the event to announce a tapering timetable.
However, should the Fed surprise markets later this week, its likely we could see the US dollar quickly reverse these losses.
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)