Sterling rises on Cabinet shuffle

Yesterday saw the headlines dominated all day by the Cabinet reshuffle, with news agencies reporting in the morning and speculating as to what Boris would do.

In the reshuffle, Boris sacked Andrea Leadsom, Esther McVey (housing minister), Theresa Villiers (environmental minister) and Geoffrey Cox (attorney general) and confirmed Priti Patel as Home Secretary, Dominic Raab as foreign secretary and Michael Gove as second in command (Duchy of Lancaster). But the biggest story of the day was the news Sajid Javid resigned as Chancellor, after reports Dominic Cummings was trying to make him fire his most senior aides.

The news took sterling on a rally not seen for some time as it kept going against its major counterparts. Against the euro it gained over a cent and a half at its peak and over a cent against the stronger US Dollar, which is still taking strength from being a safe haven currency, amid global coronavirus concerns which are rocking equities and currencies alike.

The peak came and went and by close we had come back down half a cent against the euro, as is often the case, when we see big rallies like that. For many, who took advantage through spot deals or forward booking, they traded at some of the best levels in nearly 4 years.

Yesterday markets took very little notice of any eco stats, so will they or won’t they today? We have some key releases in the form of German and EU GDP in the morning followed by US retail sales after lunch. We may see these have an early effect on GBP/EUR as the German figure comes out early doors and we could see a further correction to yesterday’s gains. Plenty to keep an eye on either way as the week comes to a close so make sure to get in touch with your currency consultant today to discuss your upcoming requirements.