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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

Sterling has struggled over the last week. As the Delta variant continues to spread, reopening plans have been put on hold for another month. It’s clear that this is weighing heavy on the pound, but to what extent? Privalgo’s Currency Specialists discuss this and Tuesday’s cheery UK employment data.

At the same time, we look across the pond to the US Federal Reserve to discuss whether now is the time to tighten the so-far loose monetary policy.

And finally, a few words on cryptocurrencies and the wild ride Bitcoin has been having over the last few weeks.

If you’d like to discuss any of the market news our experts are mentioning this week, get in touch. You’ll find their contact details below.

John Hallahan
Business Development Manager

Take one look at the UK employment figures that have emerged today and you’ll have to be pretty cynical not to feel optimistic about it.

According to HMRC, figures from May show that the number of staff on company payroll rose by 197,000 to 28.5 million. What’s more, the ONS reported that unemployment is down to 4.7%.

It goes to show: the pent-up demand that we’ve been discussing for months is starting to come to a head. As people get out spending again, businesses have needed to boost their workforces to deal with it.

This comes off the back of news that lockdown will be extended until the 19th of July. For pound sellers, the positive employment data should offset the negative sentiment around the lockdown extension. Stellar bulls are positing that this should hopefully thwart the current downward momentum of GBP/USD.

JHallahan@privalgo.co.uk
+442039221738

Patrick Oakley
Business Development Manager

Everyone and their dog knew that the final step of lifting the lockdown was going to be extended. The evidence was clear and present. It was inevitable that the government would have to delay reopening to make sure the Delta variant didn’t get any further out of hand.

The good news for pound sellers is that investors foresaw it too. Any potential downside to the value of sterling was already priced into the currency markets.

From this, it could be argued that the struggle the pound is now having against its major counterparts (today GBP/USD pushed down to lows of 1.407) would likely be the extent of it.

POakley@privalgo.co.uk
+442081326561

Marcus Beaumont
Business Development Manager

A significant event this week in the form of the FOMC (the Federal Open Market Committee — a unit within the Federal Reserve) meeting.

It’s quite possible that the Fed will discuss slowing down the stimulus package as the US’s recovery strengthens. We’ve been talking for a while about how the US economy could get to overheating point due to the seemingly endless appetite for asset purchasing. Recent inflation data has proved this.

If the Fed start to slow down tapering, there’s a good chance we’ll see the dollar gain momentum against most major currencies in the months to come. Good news for USD buyers.

If your business buys or sells dollars, get in touch. I’d be happy to discuss this further.

mbeaumont@privalgo.co.uk
+442071133702

Harrison Hickey
Business Development Manager

Bitcoin hit a three-week high on Monday. Once again, reaching above $40,000.

As you’ll likely know, it was down to Elon Musk’s tweets on the subject. The second richest man in the world announced that Tesla will recontinue to accept the cryptocurrency once ‘there’s confirmation of greener energy usage by miners.’

Now, I’m all for cleaner energy. And I applaud Musk for using his might to change the world for the better.

But at the same time, even with this positive Bitcoin news, you can’t shake the fact that this is another sign of its rollercoaster volatility. Its value increased circa 12% thanks to one tweet by one (albeit very influential) man.

Are my suspicions fair, or am I being too cynical? Get in touch and let’s discuss

hhickey@privalgo.co.uk
+442045269789

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