By Lauren Buckner
As we open this morning GBP sits at its best level versus the Euro since the beginning of April, a level that we have hit only twice in the last 12 months. The Pound has been boosted slightly by news that ‘Freedom Day’ on Monday will go ahead and the easing of lockdown in Scotland will also follow suit (albeit in a slightly different format) and we await an announcement from the Welsh government later today.
Importantly for our clients in England and Scotland, travel is back on the menu! Scotland advises against non-essential travel at this stage however, does not restrict movement and also removes the requirement for quarantine for those returning from Amber listed countries that are double vaccinated.
Further updates on those countries that are listed as Red, Amber and Green are being debated by MPs over the next 48hours as we expect an update on these lists in the next few days. Speculation is increasing that the Balearics will be moved to Amber status which could impact the summer plans for those younger family members who are yet to be eligible for their second vaccines, expect more talk of this over the coming days.
The success of the Covid vaccination rollout in the UK has given the Pound some significant strength over Q2 2021 and continues to support the trading levels seen, particularly against the Euro. Looking back over the past 12 months the average exchange rates sits three cents lower than where we currently trade, For each £10,000 you are buying €300 more than this median level – on £100,000 you get €3,000 more, so although we all like to ‘fine tune’ our timing on a large exchange of funds, it is worth noting that our Euro buyers are already in a strong position and that caution could be advisable when looking to target higher rates.
US inflation data yesterday posted a 13 year high as expectations of ‘hyper inflation’ for the States continue. The US consumer price index increased by 0.9% last month, its highest level since June 2008, with the surge in prices being fuelled by the travel sector reopening and new car sales as rental companies look to replace stock offloaded at the height of the Pandemic. There are signs however, that these higher prices are filtering through to food, clothing and rent payments as criticism begins to mount over the combination of low interest rates and nearly $6trillion dollars being spent in government relief. The challenge for the UK economy as we reopen on Monday to our ‘new norm’ is staving off the threat of damaging the economy in the short term and our performance will likely filter through to the value of the Pound. How well do you think UK Plc will do?
Please keep in touch with your Account Manager at A Place in the Sun Currency to remain informed of market developments.