Sterling finally breached the €1.17 mark this morning, after an interesting day yesterday which saw it rising, falling sharply, then rising just as fast again, swinging around 1%.
This was probably mainly based on rumour and jitters ahead of tomorrow’s interest rate announcement.
If you look at the charts you can see it has been knocking on the door of this level for some time, while lacking the energy to go higher.
Like anything, in the end a currency needs fresh nourishment to gain strength. While the recent rises have been all about the Brexit deal, then the successful vaccine rollout, you have to wonder where sterling will find the power to move much higher.
It was no coincidence that in the most recent quarterly forecast we published (January to March, still free to download here) almost none of the leading bank projections within it suggested the pound would be stronger than it is today, while most predicted it would be significantly lower.
That could still happen, and anyone planning a financial transaction should be very wary of relying on today’s rate sticking around for long. If the pound sinks back, will you still be able to fulfil a transaction you’re committed to?
Would it be more prudent to lock in today’s fresh high – the strongest rate since February 2020 and indeed rarely beaten since the referendum?
If you think so, call your trader on 020 8108 5337 and you can then focus your own energy on making plans for a brighter future rather than worrying about sterling.
