Select Page

25 Eastcheap 2nd Floor
London EC3M 1DE
United Kingdom

+44 (0) 20 3880 0575

help@privalgo.co.uk

Office Hours
Monday - Friday
8:00am - 5:30pm

Let's talk currency

Thanks for submitting your enquiry.

A Privalgo representative will be in touch with you shortly.

25 Eastcheap 2nd Floor
London EC3M 1DE
United Kingdom

+44 (0) 20 3880 0575

help@privalgo.co.uk

Office Hours
Monday - Friday
8:00am - 5:30pm

After a stagnant couple of weeks of GBP/USD and EUR/USD, we’re starting to see some change. Both the pound and the euro have started to see attempts at recovering lost ground from the Federal Reserve’s hawkish shift in its monetary policy some weeks ago.

In this article, Privalgo’s currency experts discuss what’s put a tool in the works for the recently unstoppable dollar, what ‘Freedom Day’ has meant for the value of the pound, and the euro’s struggle to maintain any kind of forward momentum.

If you feel that you or your business will be affected by what we’ve discussed in this article, feel free to reach out to our currency experts via the details provided. Alternatively, book a meeting here:

Book a chat with a currency specialist

Brendan Leonard
Business Development Manager

Finally, there’s some respite for USD buyers. After weeks of struggle, it seems that the pound-to-dollar rate is out of the woods.

A few reasons for this, mainly centred around dollar weakness. On Friday, the much-awaited US non-farm payroll data was released.

A mixed bag of figures, the results showed that 850,000 jobs had been added, surpassing the 700,000 expected. At the same time, US unemployment jumped from 5.7% to 5.9% — a reading that wasn’t expected.

Crucially, this has helped remove the Fed’s appetite for further bringing forward interest rate hikes. And it has put a tool in the works for anyone who was anticipating a tapering programme to start anytime soon.

The impact? GBP/USD went from lows of around 1.374 on Friday morning to knocking on the door of 1.39 on the morning of Tuesday.

With optimistic surrounding Covid reopening plans, there could be more upside for the pound to come.

BLeonard@privalgo.co.uk
+44204 526 9787

Harrison Hickey
Business Development Manager

You don’t need me to tell you the news that July 19th will be going ahead as originally planned. Yep, nightclubs and festivals will be able to operate, we’ll be able to drink at the bar like the good old days, and facemasks will become a matter of choice.

What you may not know is the positive impact this is having on the value of sterling. It’s been a harsh couple of weeks for the currency.

As cases of the Delta variant keep rising, it seems that investors have held off from supporting GBP until they get a sure-fire answer that it won’t hinder the plans to further reopen the economy.

Now that Boris Johnson has put the UK public to rest, GBP shows to be gaining momentum against its peers. GBP/USD is reaching up to 1.39, almost a cent and a half up from last week. Meantime, GBP/EUR is clawing at the 1.17 mark, near enough a cent higher than last Thursday.

hhickey@privalgo.co.uk
+442045269789

Jack Nielsen
Business Development Manager

German ZEW data is being released today. And it could be of interest to you if you’re selling euros.

In short, it’s a survey of about 300 German institutional investors and analysts which asks respondents to rate the relative 6-month economic outlook for Germany. A key indicator of the country’s health, it could impact on which direction EUR/USD goes in the next week.

The euro has had a volatile couple of days against the dollar. After weeks of struggle, it finally regained ground to touch the 1.19 mark, only to immediately fall back this morning.

A couple of reasons for this. One, the dollar seems to have rebounded slightly, as the dollar-selling sentiment seems to have run out of steam. Two, the ZEW data has shown that economic sentiment in both Germany and the broader Euroland has abated in the month of July. Plus, German Factory orders have contracted at a monthly 3.7% during May.

John Hallahan
Business Development Manager

Far be it from me to rain on anybody’s parade. But the optimistic message from Boris Johnson yesterday on nearly everything operating as normal from July 19th is a coin with two sides.

Getting back to normal also means furlough ending. The scheme began to phase out at the beginning of this month, and it will end completely at the end of September of this year.

In April (the month for which we have the latest figures), there were 3.4 million employees on furlough — that’s around 1 in every 48 people. In June, the government’s total gross outlay was £2.2 billion to pay for the scheme. So, it’s definitely still happening.

There’s potential for furlough’s gradual phase-out and eventual end could be a nasty shock to the economy. It could lead to unemployment and business closures. This, in turn, could spell out some rocky waters for the value of sterling over the coming months.

JHallahan@privalgo.co.uk
+442039221738

Speak to a Privalgo Representative

submission success

Thanks for submitting your enquiry.

A Privalgo representative will be in touch with you shortly.

Download Your Guide

Thank you for downloading

Find the best exchange rate today

info@privalgo.co.uk or +44 (0)20 3880 0575