Sterling has started the week on a positive note, ahead of a prime ministerial announcement today that’s expected to say that most Covid-19 restrictions are ending on 19 July, two weeks today.
That will include an end to compulsory mask wearing and social distancing, with restaurants, theatres and nightclubs operating at full capacity.
Unfortunately for many of our clients, it won’t mean a return to normal international travel rules, as the red, amber, green system remains in place.
If you are planning a trip abroad to view properties, we are sponsoring a series of webinars for Your Overseas Home, all about traveling to view and buy properties under the current restrictions. They’re all free, so do get your free pass here.
The question for anyone changing pounds to another currency in the near future is whether sterling has any more fuel left in its tank.
Against the US dollar it remains 2 to 3% off the highs of early June, while against the euro it has meandered indecisively for the past couple of months as it looks for direction.
All I can tell you is that it could go either way. There are four main factors influencing sterling right now. The first is the 19 July end to restrictions. That can be chalked up as a positive to sterling, for now.
The second is economic data, especially around the recovery of the economy but set against the risk of rising inflation. Although not great for the economy or your savings, inflation that continues above the Bank of England target of 2% could lead to higher interest rates and be positive for sterling.
Thirdly, you have to balance that against what other central banks are doing – if they raise interest rates first sterling could slide.
Fourth, Covid-19 cases and if the relaxation of rules leads to a resurgence in cases and a return to lockdowns in the autumn.
Economic data coming down the line this week includes UK services Purchasing Managers’ Index (PMI) today, which is a reliable measure of future economic performance, and construction PMI tomorrow. Then house prices on Wednesday. We have to wait for the end of the week for more vital data on balance of trade and industrial data.
Do also bear in mind the eurozone data as well.
Or, as I always point out, simply lock in your exchange rate at a level which allows you to buy the property you want. Your trader will be available, as ever, on 020 8108 5163.
