By Matthew Boyle
With Brexit fast becoming a distant memory it seems the Pound has started to both move onwards and upwards. Since the start of 2021 it has gained around 6 % against the Euro and 4% against the US Dollar.
Without doubt the removal of the uncertainty and anxiety surrounding Brexit and leaving the EU has enabled the Pound to find its feet and some renewed strength.
In no small way this has been helped by the pace of the UK vaccination program- greatly outperforming Europe and so paving the way for a faster economic recovery .
Whilst the long term outlook for GBP remains good, in the short term analysts are warning of a potential correction or period of consolidation for rates – not uncommon after fast gains over a short period of time.
And whilst currently things are looking positive in the fight against Covid, we mustn’t rule out that this can change should for example a new strain appear that is vaccine resistant.
As such those with upcoming purchases may like to consider taking advantage of the current highs – 12 months plus for GBP>EUR and close to 5 year pre-Brexit highs for GBP>USD.
Without doubt it would at least be prudent to consider a cost averaging approach to at least remove some of the risk in what are still uncertain times.
When the travel restrictions eventually lift will we see a tidal wave of overseas buyers and consequently house prices rise?
And with an increase in travel comes the risk of a new strain and lockdown. Should that happen would the gains made by the Pound be lost?
With GBP>EUR rates currently so good and overseas property prices so cheap, now could well be the time to take advantage.
Speak to your broker today for some friendly and professional guidance on how to get the most out of your currency transfer.
The Week Ahead
Mon
13.00 USD Fed Chair Powell speech
13.00 EUR German Buba President Weidmann Speech
Tue
07.00 GBP Unemployment rate and claimant count
11.50 GBP BoE Governor Bailey Speech
16.00 USD Fed Chair Powell Testifies
23.50 JPY BoJ Monetary policy meeting minutes
Wed
07.00 GBP CPI data
08.30 EUR German Markit PMI
09.00 EUR EU Markit PMI
09.30 GBP Markit Services PMI
12.30 USD Durable Goods orders
14.00 USD Fed Chair Powell Testifies
Thu
00.00 EUR European Council meeting
08.30 CHF SNB interest rate & Monetary policy announcement
09.30 GBP BoE Governor Bailey Speech
12.30 USD GDP Data
Fri
00.00 EUR European Council meeting
07.00 GBP UK retail sales
09.00 EUR German business climate data
12.30 USD Personal Spending data