If you were looking for a word to describe sterling’s place in the currency markets right now the word would probably be ‘uncertain’.
When the global economy faces risks there are currencies that investors buy, such as the US dollar, yen and euro. Then there are those they sell, such as the Norwegian krone, and Australian and New Zealand dollars, which tend to be based on commodities that the global economy may not be buying in a crisis. Sterling sits between the two.
So, while we haven’t seen any panic, unlike at the start of the pandemic when sterling lost 10% of its value in the space of two weeks, the omicron variant has certainly seen sterling fall from the perch that hopes for an upcoming interest rate rise had put it on.
Hence the pound has slipped back to the levels of mid November. Hardly a disaster as it is still 6 or 7% stronger than this time last year.
If you are looking at buying a property in Europe, this is a great time to do it, with sellers (and their estate agents) keen for a sale at a quieter time. You can lock in today’s exchange rate with a call to your trader on 020 8108 5337.
There isn’t much to move the market on the data front until Friday (with GDP and other industrial data), but before that traders may seize on data such as new car sales, construction PMI, retail sales and house prices if they feel they support or detract from the case for an interest rate rise on December 16th.
On the other hand there is data coming from within the EU that could impact GBP/EUR.
