Sterling hits a new pre-pandemic high

Sterling rose yesterday to touch a pre-pandemic high versus Euro, largely supported by expectations that the Bank of England will raise interest rates further. The pairing edged higher to just shy of 1.20 – the highest since February 2020. GBPUSD also rallied, although not as significant, reaching its highest level since November 4th 2021. As mentioned, this is largely on the expectation we’ll see a rate hike in February from 0.25% to 0.5% with some analysts saying it’s 80% likely.

However, it could be argued that Sterling strength is priced in already so that any further gains could begin to run out of steam. Rising Omicron cases and Brexit stumbling blocks, particularly involving Northern Ireland, remain potential catalysts for Sterling weakness.

US inflation expected to reach fastest pace since 1982

The key focus today is Consumer Price Index figures from the US. It’s expected to show headline inflation jumped by 7%, its fastest pace since 1982. The Fed is already on track to raise interest rates to combat rising prices. A strong number later today should confirm this.

Pick your currency, check the rate

✓ Friendly, fast & reliable service ✓ Secure bank transfer ✓ Excellent Competitive rates
  • (No cash, bank to bank transfers only.)