By Luke Dyson
Over the last couple of weeks we have seen Sterling take a bit of a tumble, moving down to the mid-point of the market range that has existed for the last 6 months. Following this drop, the market has now levelled out, and is now moving within a 1 cent range over the last week, with no clear trajectory in sight.
As a result of this Sterling has now picked up the status of the worst performing G10 currency in July.
The initial drop has been driven by a few key factors according to Valentin Marinov; lead Credit Agricole analyst – focus on the failed UK welfare reforms, and a run of poor UK data, in the form of GDP, inflation and unemployment.
As a result it’s believed Prime Minister Keir Starmer will now need to raise taxes in the autumn, and it has also prompted the Bank of England to consider a run of some aggressive interest rate cuts towards the end of this year and into next year. This is all negative news for Sterling strength moving forward.
However yesterday we did see an ounce of positivity. UK wage growth came out slightly higher than expected, with a rise of 5% in May, versus the forecast 4.9%. But this positivity was drowned out by the fact unemployment was higher at 4.7%, above the expected 4.6%.
With the way the market is at present, if you have an up and coming currency requirement, please get in touch to discuss locking in a rate or to get a strategy in place to help limit your risk. Even the smallest of market movements can mean having to pay thousands of pounds more or less on your property completion, so please get in touch and take advantage of your currency consultant’s expertise.