By Luke Dyson
For the week to date we have seen sterling make a solid recovery across the board, sterling side this is down to inflation figures for January being higher than expected which has help prevent any major dips for GBP.
This soaring inflation rate, now at the highest point since March 1992, is putting increasing pressure on household incomes as the population begin to feel the strain as the national average salary is not keeping up. With calls now for a third interest rate hike from the Bank of England to limit the rapidly increasing inflation rates, tis is believed to be keeping fuel on sterling’s fire in the thought that interest rates will be hiked at the next vote.
We have also seen the Euro lose strength this week as a result of the on going Ukraine-Russia border situation, which has helped GBP/EUR make further gains and recover to the top of its multiple month rangebound market. This was following reports Russia was keen to keep speaking with Western nations and that they have called some troops back to base. However these claims were false, and optimism for an agreement to be made has faded with still over 120,000 soldiers on the Ukraine border and little diplomatic progress.
Nato Secretary General Jens Stoltenberg announced “we have not seen any de-escalation on the ground, on the contrary it appears that Russia continues the military build up”. This will therefore leave GBP/EUR caught in the middle of the media briefings and speculations regarding this current situation, creating a significant amount of volatility for the currency markets depending what outcomes happen.
If you are looking to buy euros in the near future do consider taking advantage of the current rates. Over the next few weeks we could see some serious market movement depending the outcome of the Ukraine-Russia situation and Bank of England decisions.
With the market currently tracking towards the top of the current range is it worth holding out for a potentially smaller gain to downside potential? This also allows you to focus on other aspects of your property purchase without the need to worry what your property is going to cost.