By Ashley Finill
The pound has reached a 7 month high against the Dollar and is now also trading at the top of the range against the Euro, which presents a great opportunity for buyers of both the major currencies.
Sterling was given the unexpected support against the dollar as US wages slowed down unexpectedly in February, which raises concerns for the US economy, which had been doing better so far this year. Not only did wages slow in the US, but the unemployment rate rose from 3.7% to 3.9% from January to February too. As a result, investors sold the greenback and sterling was able to benefit. Should you have a requirement for dollars it may be worth getting in touch ahead of next week’s interest rate decision as pricing in the event is likely happening right now and should the Fed not look to cut interest rates as soon as being reported, the recent gains could be short lived.
Couple that with the Bank of England’s interest rate decision the following day, and although the Governor Andrew Bailey is not expected to cut interest rates on this meeting, he will almost certainly talk about cuts later in the year which could hinder Sterling’s strong performance against the majors seen this year.
With uncertainty seemingly ahead, Sterling may start to wobble; as we have seen in the past the markets hate nothing more than uncertainty, and with political upheaval and a general election in the coming months, Sterling is definitely vulnerable.
Should you have a requirement for currency in the coming week or months, it may be an idea to speak to your A Place in the Sun Currency account manager about our forward contract option, which can protect you from nasty surprises in the currency market, which could otherwise cost you more when buying a property.