Sterling hits 4-month high against the Dollar

Whilst it was a poor week for £-€ rates, the £-$ advanced nearly 2% and currently sits at a 4-month high. It's quite clear that the Dollar is oversold at the moment and so a correction is likely imminent (probably this week). So if you have any $ trades in the pipeline, now will be the time to exchange. The Euro has gained over 7% in 3-months against the Dollar and so the recovery could be a big one.

The news on Friday that the Government has removed Spain from the travel corridor list was a shock to all and a reminder we are not out of the woods yet. Spain's near 10k new cases in the last week, will certainly put a hold on the Euros recent rally and the market will be watching closely at what happens next within the country and its neighbours. The dominant €'s surge was actually halted Friday morning when the UK's retail sales & PMI figures showed better results this month against the Euro-Zone. The UK produced much better than expected data and showed that all-important initial v-shaped recovery. 

Elsewhere, stock markets have begun to soften due to rising US-China trade tensions and second wave outbreaks of Coronavirus in Spain, Japan & Hong Kong. This is potentially bad news for the Pound, as Sterling is currently pegged to the global stock markets performance. One of the big reasons the $ has been hit hard of late, is due to the US' problems with Covid-19. Whilst the UK currently sits at 9th place in the global size order of outbreaks, the Pound is at the mercy of investors and where they take their money during a potential global second wave outcome.

It's a slow start to the week on the data-front, but we burst into life on Thursday and Friday with the EU states releases some key data. The GDP figures are the stand-out and so expect market volatility over the last two-days of the month. 

 
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