26/04/2021

Market report: Pound edges lower against euro & dollar


GBP

The pound may have been one of last week’s biggest fallers, edging lower against the euro and dollar, but the UK’s economic outlook is surely far too positive for the pound to be left behind. Data releases last week showed strong retail sales and PMI, plus rising inflation, giving optimism for the pound in the coming weeks.

It’s quiet on the data front this week, but any impact from last week’s numbers could be boosted by the Bank of England’s Deputy Governor’s recent comments. Ben Broadbent said he sees “very rapid growth at least over the next couple of quarters”, particularly as the economy will be boosted by people simply saving less and spending more.

However, Brexit woes could still weigh on sterling. Boris Johnson is being pressed by Brussels to align the UK’s food standards rules to those of the EU in return for easing checks between Britain and Northern Ireland. EU negotiators have told the UK they will drop its demand for checks on food crossing into Northern Ireland if the government aligns itself with all EU plant, animal health, environment and food safety rules.

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