Sterling down as stock markets turn red

Hi everyone,


As we have been saying for the last couple of months now, the Pound is sensitive to the stock market and is pretty much following the performance of global stocks. When stocks rise, there is generally an influx of foreign investment into the UK. Investors also tend to take money out of safe haven currencies such as the $, which in-turn strengthens the £. 

However, the rising US covid cases, Beijing's lockdown and even the skirmishes between India & China and North & South Korea have caused investors to become wary of the near-term. Even though economies are being opened up again worldwide and news just yesterday that a steroid has been successfully trialed to significantly lower mortality rates of people with coronavirus. The Pound's performance will be stock based for the foreseeable. 

The high level talks between the EU & UK on Monday afternoon were deemed positive by both parties with Boris Johnson saying 'the prospects for an accord are very good'. The Pounds 'underpeformance' will continue until Brexit is finalised, which won't be until November/December. Market anxiety will rise again in July when the latest round of talks begin again. 

Tomorrow it will be all eyes on what the BoE decide to do with interest rates..

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