By Luke Dyson
Sterling has been very volatile over the last couple of weeks, we saw a multiple cent drop following the interest rate announcement but also the ongoing Brexit agreement issue with the UK government trying to get the deal rewritten resulting in some background noise in the markets.
This week to date we have seen sterling recover significantly following a better than expected unemployment rate figure. It is quoted the job market is booming following what was to be an expected surge in unemployment following on from furlough coming to an end.
It has also been announced that the Bank of England will likely be looking to raise interest rates at some point towards the end of the year (before Christmas) to tackle rising inflation. Andrew Bailey has announced that he is very uneasy with the rising cost of living and current forecasts suggesting 5% inflation by spring next year which is 3% higher than the current target rate.
Both the potential interest rate hike and positive unemployment figures are very good for the strength of sterling and this is why we have seen the market recover this week, for GBP/EUR we are currently within half a cent of the 20 month high now making the current market an excellent buying opportunity.
Although the short term outlook for sterling is overall looking positive, there is always an element of risk for the market to drop at any point following an unexpected announcement, we are also entering the winter months / flu season, Coronavirus is still around and still does have the power to play havoc as Boris Johnson announced future lockdowns are not completely off the cards if case numbers begin to rise, leaving uncertainty high for sterling if this is the case.
If you have an up and coming currency requirement please take advantage of the current exchange rates, get in touch with A Place in the Sun Currency today to see how you can take advantage of this opportunity to buy at higher rates.