New variant, new uncertainty

By Luke Dyson

What a positive start to the week, May the 17th another key corona virus date being hit, which was set in place to slowly reverse the restrictions of the current lock down. With businesses beginning to open and travel restrictions beginning to lift the overall conscencus of the UK is an optimistic one.

For the week to date Sterling is still going strong and maintaining its strength for the euro with less than a cent daily fluctuation since Monday, still making it an excellent buying opportunity with the rates in touching distance of the last 12 months highs.

However for the dollar we have seen a larger amount of volatility with it gaining two cents since Monday and hitting a new high since February 2021.

Although sterling at present is holding its strength across the board it is still far from secure. With another wave of uncertainty slowly sneaking into the mix as a new Indian coronavirus variant has made its way to the UK and started to rapidly increase case numbers again in a small number of locations. This has significantly ramped up the uncertainty for the UK and the strength of the pound as Boris Johnson and Matt Hancock hint there could be delays to the June 21st lock down deadline and even tighter restrictions to the ones that are already in place. This would be another massive blow to the UK’s economy if this was to happen as businesses already struggling and set to begin recovery June 21st could be pushed over the edge by this short term set back.

Although the new strain is very early days at present and no one knows what it could bring , it could and does have the potential to significantly impact the strength of the pound in the near future if not under control. If you have any pending currency requirements for the near future please take advantage of this current sterling strength as this could be very short lived depending on how this new Covid variant plays its cards. please get in touch with your currency consultant today to see how you can limit this risk.