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13 January 2021

Sterling has strengthened this week, boosted by comments from BoE Governor Bailey, who downplayed the possibility of negative interest rates. He went on to say there are many issues with negative interest rates and it was too soon to reach a conclusion on further stimulus. The comments suggest the BoE will adopt a ‘wait and see’ approach with regard to how the economy reacts to Brexit and a third national lockdown.

In the US, small business confidence fell to a seven-month low, as the ongoing pandemic hits sales outlook and business conditions. Meanwhile, the Fed toned down talk of tapering its asset purchase program, and reiterated monetary policy will stay accommodative. This along with bullish sentiment in the equity markets further weighed on the safe-haven greenback.

Ahead today, the ECB publishes November Industrial Production figures. The ECB President, Lagarde, is also scheduled to speak. The US releases December inflation figures, with core annual inflation expected to stay steady at 1.6

 

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Please note that this update is provided by Fexco Corporate Payments for your information only. It does not constitute advice. You must rely entirely on your own judgement when making an Order and entering into a contract with Fexco Corporate Payments and any decision you make to buy and/or sell currency is made solely on your own judgement. Fexco Corporate Payments  is regulated by the Central Bank of Ireland and is regulated by the Financial Conduct Authority for the conduct of payment business in the UK

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