By Grace Smyth
So far this year it looks as though the Pound has been out-performing expectation, making steady gains and recently hitting ten month highs against the euro, providing a great buying opportunity for those looking to secure their euros for their property purchases in the sun. The recent gains are down to a number of reasons. The first being news circulating that the eurozone economy had fallen into a technical recession in the first three months of 2023 as rising prices took its toll on spending. The second is down to high inflation in the UK. To combat rising inflation the Bank of England has been consistently raising interest rates, which in turn has meant investors are placing their funds in Sterling to benefit off the inflated returns. Yesterday the Pound was further aided by better then expected UK unemployment data which fell to 3.8% from 3.9% in March. An unexpected result as markets had predicted an increase to 4.0%.
Yesterday also saw an uplift against the US dollar. US inflation figures came in confirming that inflation is falling and as a result the US dollar dropped off. The market reaction suggests that a decision from the Federal Reserve to take a pause of rate hikes and to maintain it’s current interest rate is now being priced in ahead to todays official meeting. Certainly an even to be mindful of if you have a Dollar requirement due.
All great news for those with Sterling in hand looking to sell but perhaps not so great for those looking to buy back pounds. With forecast predicting further potential gains in the coming months it may be prudent to speak to your currency consultant. Sitting on your funds in the hopes that rate might drop back of to levels seen earlier in the year could be costing you further so get in touch to discuss options. Likewise for those with a need to sell Sterling, with rates potentially on the rise, our Limit order options could be the key to lock in at your preferred exchange rate should we see markets improve in the coming weeks. With the BoE due to announce its latest interest rate decision later in the month it might be prudent to get your options in place ahead of the event to avoid disappointment.
We love to hear from you so get in touch with our team for some friendly guidance and your upcoming currency requirements.