Sterling on the Rises from the Shadows

Today's Currency Market Focus

GBP: Sterling rises from the shadows

EUR: Euro gets slammed (on purpose)

USD: Top Dollar

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GBP: Sterling rises from the shadows

The Pound has had some sharp swings this week even though most of the attention has been on the Euro and Dollar.

In the UK, inflation may have disappointed but bumper growth in retail sales indicates the economy may be coming out of its mini-slump.

With the Fed and ECB tightening policy, we feel the Bank of England will be more inclined to follow suit – which would be positive for the Pound.

EUR: Euro gets slammed (on purpose)

The ECB managed to catch investors by surprise yesterday, triggering steep falls in the Euro.

In the lead up to this month’s meeting the ECB had given markets the heads up they would announce the phasing out of monetary stimulus (bond purchases). But the ECB are a crafty bunch and didn’t want this news to propel the Euro any higher as it would hurt EU (ie German) exports.

So they kept a little bit of bad news back for the big occasion – that interest rates would be on hold through to at least mid-2019. It was enough to spoil the party with the Euro leading the way down on the day.

USD: Top Dollar

There’s no stopping the rampant Dollar at the moment. With the Euro deliberately dented by the European Central Bank and Sterling hindered by Brexit, the Dollar continues to shine.

How quickly we forget that towards the end of last year and early this year, the opposite was true. Good or bad new seem to take the Dollar down.

There is good reason for the Dollar rally. The US economy is in good shape and the Fed is raising rates - another two hikes are expected this year.

But there’s no “sure things” in finance and this weekend is expected to bring more trade tariffs against China. Will the Chinese bite back?

Thanks For Reading, What Next?

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Have a great day,

Geoff Lambourne - Direct Dial me on 0044 (0)1872 487 470.

Current rates:

Friday 15th June 2018 at 12:45

£1.00 GBP = 1.1451 EURO

£1.00 GBP = 1.3280 USD

£1.00 GBP = 1.7770 AUD

£1.00 GBP = 1.9093 NZD

£1.00 GBP = 1.7432 CAD

£1.00 GBP = 17.8025 ZAR

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