The Pound looks to be ending May in bullish form..
| GBP
| It has been a very good month for Sterling so far, gaining close to 2% on the Euro and USD.
Such gains shouldn't be just 'sniffed at' in my opinion, but that's your call as it's of course your money. Hedging at current levels should be a priority for those of you with low-medium risk appetites or with a near-term time-frame to move funds overseas.
For perspective -
GBP v USD has gained a ridiculous 16-cents in just 4-months. A mid-market rise from 1.2170 to 1.3580 is about a 10% difference. On £200,000, that's a huge $27,000 gain..
GBP v EUR is up 4-cents in just 6-weeks. A 3% gain on £200,000 means an extra €7,000 to your pocket..
The Pound strengthened across the board towards the end of last week and into this one after financial markets were all reminded of the trade war risks that still linger.
Data-wise, there doesn't look to be anything this week that can reverse the positive £ trend..
EUR President Trump threatened the EU with an immediate 50% tariff last week after being left unimpressed with how negotiations were going with Europe.
Yesterday Trump said "We had a very nice call and I agreed to move it". This has done little to help either the EUR or the USD at this moment in time, but an extra month to agree terms does allow time for a positive outcome for both currencies eventually.
A 50% tariff on Europe would be devastating to its economy and would prompt further rate cuts (seriously double bad news for the €). Just when investors were getting used to the idea that the worst has passed on the trade war front..
USD The USD has had a terrible 2025 so far and a recovery doesn't look to be on the cards anytime soon to be honest. Trade war talk hurts the USD, when investor sentiment is positive it hurts the USD, "sell America" is hurting the USD and then with the sheer number of uncertainties surrounding Trump and the US this year, it's hard to see where and when this stops just now.
GBP v USD & EUR v USD are both 5% off 5-year highs (majority of 2021). I expect this could be tested in the months, if not weeks ahead. But similarly, the bad news and feeling surrounding the US has to stop at some point, which is exactly why now is a great time to be exchanging
Please check out the main events of the week below.. |
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