Can sterling rebound continue?

19 August 2024

Weekly Market Headlines:

• In the past 11 days, GBP/EUR is up 1.5 cents, and GBP/USD has gained 3 cents.
• Retail sales give the pound a further boost. Friday’s UK retail sales figures capped off an impressive week for the pound. Markets currently estimate a 50/50 chance that the Bank of England will cut interest rates at their September meeting.
• Will borrowing data affect sterling? This week’s government borrowing figures could challenge Chancellor Rachel Reeves and impact confidence in UK finances and the pound.
• Monetary policy decisions by China, the world’s second-largest economy, could impact global market sentiment, particularly affecting commodity currencies like the Australian dollar, New Zealand dollar, Canadian dollar, and South African rand.

With limited UK data, sterling rates may be shaped by Eurozone inflation, PMI surveys, and other global indicators. Speak to one of our dedicated currency specialists if you have any questions relating to this week’s market update.

What events might move exchange rates this week?

GBP

• Wednesday – Government Borrowing
• Thursday – Composite PMI

USD

• Wednesday – New Home Sales & FOMC Minutes
• Thursday – Composite PMI
• Friday – Jackson Hole Symposium

EUR

• Tuesday: Eurozone Inflation
• Thursday: Eurozone Composite PMI

OTHER

• Tuesday: Chinese Interest Rate Decision (AUD, NZD & More)