Sterling slides to a 1-month low
The Pounds month-long rally has come to an abrupt end with July's UK retail sales figure the final nail in the coffin. The release missed expectations by quite some distance both MoM & YoY with the 'pingdemic' and poor weather taking most of the blame. This is unfortunately another sign of the UK recovery slowing and starting to lag behind other major economies.
£-€ rates have fallen 0.8% this week and 1.5% from last week's high point. This is a loss of €900 & €1,600 on a £100,000 exchange, so quite a significant dent in a short space of time. With the USD being a safe-haven currency, the drop has been a little more severe with 2% lost this week and 3% from the recent high.
The decline in performance isn't the UK's or £'s fault as such, it is mainly because of negative investor sentiment due to a global growth slowdown and the spread of the Delta variant in Asia. When this happens, the Pound is practically a sitting duck as many of you witnessed last year. A good way of keeping ahead of the game is to follow the S&P 500 which is often a good sentiment indicator.
For those of you new to the market, this is a standard rise and fall scenario which you need to be prepared for with setting rate alerts and hedging strategies. When new dizzy heights get reached, you can almost safely bet something will bring that rally back down. The main thing to look out for is how far it falls and for how long. Maybe a 'sleepy August' is a thing of the past after the volatility seen the last 2-years in the month..