By Luke Dyson
As we now enter the final month of 2021 we would have all hoped the dreaded covid situation would be under control or at least on its way for the world getting back to life pre covid.
Following the announcement that a new Covid variant (Omicron) has been discovered in southern Africa it has dramatically increased the uncertainty for the UK moving forward , with Boris Johnson now adjusting the current covid restrictions to make masks required on public transport and in shops as a precautionary measure ahead of pharmaceuticals confirming the current vaccines still offer protection.
The head of Moderna has also announced a concerning statement that he sees a “material drop in the effectiveness of the existing vaccines” which now leaves the door open for future lockdowns if case numbers begin to rise, as limited immunity would be present if the vaccines are deemed ineffective.
This has thrown a huge amount of uncertainty into the currency markets with sterling taking a multiple cent hit, having hit the 2-year highs weeks before for sterling-euro.
We have also seen a significant increase in the strength of USD for both the GBP and EUR currency pairs. With the US inflation rate rapidly rising due to supply chain issues the Federal Reserve is now looking into speeding up tapering come their meeting in December, with a plan to reduce purchase of bonds by 15 billion USD a month, from the current 120 billion, ultimately leading to higher interest rates.
With the current uncertainty regarding covid in the next few weeks, please consider taking advantage of the current rates as sterling majors are still holding majority of their strength, in comparison to currency rates in lockdown, during this investigation period. Once an announcement has been made regarding a covid strategy moving forward or any potentially vaccines issues, the market would have potentially moved costing you thousands of pounds on a property completion-sized transfer.
Please contact your currency consultant today to get a strategy in place ahead of this uncertain time to limit your currency exposure, saving you thousands if the market took a turn for the worse pending any covid updates.