The Pound shows signs of a recovery
September saw the world's major stock exchanges record their first monthly loss since January. This is significant news, as the Pound has been closely following both investor sentiment and the performance of the stock market since the pandemic began. On Tuesday, GBP fell off a cliff as energy prices surged to record highs. Wednesday also saw more declines for Sterling, as investor sentiment turned sour with the likely news that high inflation is here to stay for a while yet.
However, yesterday and today has seen a bit of a fightback from the Pound, citing that the energy crisis may have peaked. Personally, i'm just glad to see the downward spiral has been halted for the moment, as we could have easily seen much deeper losses. £-$ rates did hit a 9-month low this week (due to the $ being a safe haven currency) with £-€ dropping to a 5-week low (could have been much worse).
Welcome to Q4 then and with it another game of uncertainty on the market. Some analysts remain bullish on the Pound to push back to £-€1.18 & £-$1.40 levels, but others firmly believe there are too many headwinds for Sterling to gain any value. For now, we will sit on the fence to see how this month plays out after a hectic September. The ending of the furlough scheme, inflation data and central bank policies will all have a big say on things this month.
It's impossible really to predict how GBP will fare this month mainly due to the energy crisis. But to end on a positive, this time last year rates were £-€1.0960 & £-$1.29..