By Simon Eastman
The pound continued to fare well against the single currency last week as headline inflation figures pointed towards the Bank of England raising interest rates this week.
In a move that is widely anticipated, we expect to see an increase in the UK interest rate on Thursday, as the Bank continues to try and stave off rising inflation, driven by the war in the Middle East and Ukraine, the cause of rising fuel and food prices across the globe. With the UK importing the majority of its energy and much of its food and other consumer goods, the cost of living crisis is a continued concern.
With the rate hike almost certain, the pound finished October strongly, as it rallied to levels not seen since March 2025 against the euro, providing continued attractive buying levels for those looking to buy their own Place in the Sun. For those spending €250,000 on that dream home, that cost has dropped by around £4,500 in the last four weeks alone, making now a golden opportunity to secure funds for those upcoming completions before year end. As we head towards the Christmas period, with thin trading causing larger than normal swings in exchange rates, plus the risk we might see recent gains disappear (should sentiment change following the Bank’s monetary policy statement on Thursday), the coming few days could be the best time to secure that upcoming currency requirement.
Speak to one of the team at A Place in the Sun Currency today for some friendly guidance and ask about Forward Contracts or Limit Orders to help hedge your currency risk, or Stop Loss Orders to safeguard yourself against any potential drop in the market, whilst monitoring how rates perform over a period of time.
For those buying the US dollar, we saw rates drop slightly on Friday as risk off sentiment swept the markets as the leading crypto exchange, Binance, announced it had been hacked to the tune of $6.36 billion on Thursday night. The crypto exchange moved quickly to appease investors; as North Korea took the credit for the “grand theft crypto”. Bitcoin initially dropped off below $77,000 but regained much of this over the weekend heading back above $78,000 as Bianance announced they would cover at least 90 percent of losses.
The greenback also benefited from positive sentiment surrounding the recent Fed interest rate meeting, where no hike was expected but there are now strong feelings there will be a rate hike in December. Any change in this position will likely weaken the dollar so those with a cable requirement keep in close contact with your currency consultant over the coming weeks. This week the main focus in the US is the midterm elections, which take centre stage on Tuesday.
The week ahead
Monday: German retail sales plus German, EU, UK, Canadian and US manufacturing PMI.
Tuesday: RBA interest rate decision, policy statement and press conference. US mid term elections. Bank of Canada Governor Mackle speech.
Wednesday: German, EU, UK and US ISM services PMI.
Thursday: Aus trade balance, German factory orders, EU producer price index and Bank of England interest rate decision, monetary policy report and subsequent speech from BoE Governor Bailey. Speeches by ECB members Lagarde, Lane and Nagel.
Friday: EU retail sales, Canadian employment and average earnings, US unemployment, average earnings and non-farm payrolls, Michigan consumer expectations and sentiment indices plus consumer inflation expectations over 1 and 5 years.
Plenty of key data amongst the headlining Bank of England meeting, the US midterms and the non-farm payrolls, so give the team a call today to help us make your money go further.