Last week saw a week full of Central Bank decisions which ultimately have begun to dictate how exchange rates will look from January 2022- the first major event was the Fed announcing that they will be speeding up their tapering of QE, and begin looking at raising interest rates in 2022- which was not surprising news to the market, and a welcome confirmation that the Fed is now looking at next steps for monetary policy.

The surprise of the week was the Bank of England raising interest rates by 15bps- which was unexpected due to the recent rises in cases of Covid in the UK and worries about potential restrictions being put in place- however, with inflation going over 5% last week, you cannot argue with the logic that interest rates NEED to go up now to combat this.

The last event was the ECB also announced the tapering of their QE program in Q1 of 2022 with the view for it to end by March, which was again a welcomed announcement that put some strength back into the Euro.

The main risks for people who are selling GBP to buy Euros or USD is that continuation in GBP strength would rely on the BoE raising rates again in February, which I would say is not a guarantee right now given the rise in Covid cases across the UK- I think we are going to see measures introduced over the next couple of weeks from the UK Government to try and curb the spread of the virus- as cases are now around 100k per day.

As liquidity is thin in the markets from now, I am not expecting a heap of volatility until January- but if you are looking to make trades over the next couple of weeks, please see below for our opening hours.

Friday 24th: 9:00 am – 2:00 pm
Monday 27th: Closed (Bank Holiday)
Tuesday 28th: Closed (Bank Holiday)
Wednesday 29th: 9:00 am – 5:30 pm
Thursday 30th: 9:00 am – 5:30 pm
Friday 31st: 9:00 am – 2:00 pm
Monday 3rd: Closed (Bank Holiday)
Tuesday 4th: Normal Hours Resume 9:00 am – 5:30 pm

I would like to take this opportunity to wish you a Merry and safe Christmas, and a happy new year to you all!