Against the euro, sterling is trading at around its highest rate since May this year. Against the US dollar we hit a two-month high yesterday, but the bigger story is that the pound hasn’t traded consistently at this sort of rate since early 2018.
No surprise that we had an extremely busy day yesterday, with many would-be property buyers (and others) locking in this extremely good rate so they can get on with their plans in 2021.
Moreover, there is no guarantee that the pound will stay there. I’m not sure that many of us laypeople really believed that Covid’s second wave would come back so strongly, as we were warned so many times, but yesterday’s cases were truly dreadful across all of Europe and the US.
Elsewhere the news was much better, for now. Earnings increased in the UK and unemployment of 4.8% wasn’t as bad as many feared, protected as it continues to be by the furlough scheme. On Brexit trade talks, no news continues to be viewed as good news. President Elect Biden’s call to Boris Johnson before other world leaders surprised political commentators too.
But even with a vaccine and/or genuine mass testing coming in as early as December, there is still, as the second wave shows, a chance that things will be worse than expected.
There are still clear risks to sterling in the weeks ahead, so to take out a forward contract, do call your trader on 020 8108 5337.
