The pound has had a strong start to the week, rising by over 1.5% against the US dollar and 0.5% against the euro.
The main reason appears to be a trade deal agreed with Canada, although news that the Oxford vaccine (the mainly British one!) is also nearing readiness, with a lower efficacy but much easier usage requirements, will also have cheered the markets.
This could also be the week that we finally, finally, hear about a trade deal being agreed between the UK and EU.
It’s clearly the time to be thinking about the year ahead and how much better 2021 is going to be than 2020, with a burst of spending as the world returns to normal by Easter (now just four months away).
Well, hold on a minute. This could all be wishful thinking. The glass-half-empty version is that the government’s Covid spending will need to be repaid, taxes rising, pay frozen, unemployment shooting up and businesses kept alive so far by furlough schemes never reopening
There is also Brexit to think about. Some businesses have focused on operating throughout the transition period with little thought for how they will cope from 1st January. There could be a shock even with a deal.
There is also every chance that the pound will continue to struggle after a deal; indeed that the deal itself could expose sterling as a busted flush. Today’s little boost for GBP could all-too-easily fade tomorrow.
So, keep an eye out for the highs and catch them when you can. Our suggestion is, as ever, to focus on your plans and call your trader on 020 8108 5337 to agree a rate that allows you to do what you want to do in 2021.
We will let you know via a “rate alert” if the pound strengthens abnormally, but bear in mind that this may never happen! Today’s rate could well be as good as it gets and well worth securing for the year ahead.
