By Luke Dyson
What a week it has been for sterling!
We have seen a multiple cent drop across the board for GBP major currency pairs, this is following sterling being heavily sold at the start of the week due to fears of rising inflation. on top of this the rising pressure from surging gas prices is beginning to put the UK under some serious strain.
To add to the mix a media announcement last week regarding a few petrol stations being short of fuel has now escalated into a national fuel shortage following panic buying. This has now led to issues further down the line such as supermarket food shortages as transportation companies cannot get enough fuel for the lorries to transport goods.
Moving forward now being the 1st of October this marks another milestone being hit for the UK’s recovery from coronavirus, the government-backed furlough scheme has now come to an end. Now resulting in businesses having to pay their employees if they are required to isolate. This has generated a lot of worry for businesses and it is suggested that unemployment will drastically rise following this. This in the coming weeks could drastically damage the strength of sterling if this is the case.
Although case-wise for coronavirus the UK is improving and returning back to the way it was pre-covid which is very positive especially for the strength of sterling, there are a number of other factors which have now come into play which could really do some damage. Following the drop this week if you are currently looking to buy currency with sterling please consider taking advantage of the current rate. Although they are not at the previous highs we have seen we are still in a very good buying opportunity at present compared to previous months given the circumstances. With what’s going on with the fuel crisis and changes to the furlough scheme it leaves the door open for these to escalate and cause sterling further issues down the line, is it worth the risk?
Please contact your currency consultant today to discuss limiting your risk and getting a strategy in place.