Sterling strengthens further

By Ashley Finill

It’s been a good week for Sterling as it continued its momentum from last week. The pound has gained nearly a cent on the Euro and a cent and half on the Dollar. Investor sentiment seems to fully be with Sterling currently following its recovery from the energy and petrol crises at the end of September. Yesterday Silvana Tenreyro from the Bank of England’s monetary policy committee made comments on the rise of inflation levels in the UK and about an interest rate increase. Known to be one of the dovish members of the committee and against an interest rate hike she said current inflationary pressures should prove temporary. She also said raising interest rates to counter increasing prices in sectors such as energy “self-defeating” if those rises prove to be one-offs. Further on the topic of a the interest rate she said they could in fact fall to below -0.75%. With these comments made in the afternoon this did not pull sterling of its stride proving that sentiment is truly with the Pound at this moment in time.

Forward buying

Sterling is currently back to the best rates seen since August and before this was before the pandemic started more than 18 months ago. These levels have presented a great buying opportunity for our clients who have a Euro requirement. Only 6 weeks ago sterling had been falling by some distance against the euro but has since gained nearly 3 cents, to put this into monetary terms that is just over a £2,000 saving on €100k property on the current rate to where we were at the start of September. Should you want to take advantage of these rates then a forward contract might be the right option for you, where you can secure the full amount of euros needed with just a 10% deposit and remove the risk of the currency market should sterling drop back in the coming weeks.

Key data tomorrow and next week

Data this week has mostly all been released, the only release left to note is in the US as retail sales is set to be released at 12.30pm. This figure is expected to post a figure of 2.5%, nearly 2% higher than last month’s figure, should this be correct then we may see some volatility during this time. Next week there is a raft of data to be released, notably from the UK as inflation and retail sales are to be released on Wednesday and Friday respectively. Keep in close contact with your account manager for friendly guidance on your next currency transfer.