Sterling volatility continues
The value of sterling has remained volatile of late and this week recorded the largest gain against the euro for the previous five months.
As this may increase the export price of UK pork and make imports cheaper, if the strengthening trend continues, it could potentially harm volumes of imports and exports. However, currency volatility looks set to continue for the near future, so below we set out the trading range of sterling since the financial crisis of 2008, against how these levels affect the EU pig price in sterling terms.
This gives a guide as to the impact that exchange rates can have on pig prices in the UK, given that the level of EU prices is a key determinant of competitiveness. At its current level, the EU pig price would vary by over 40p/kg in sterling terms, taking the strongest value of sterling and comparing it to the weakest, since 2008.
Vikki Campbell, Senior Analyst
vikki.Campbell@ahdb.org.uk, 024 7647 8741