January may be dragging on in a particularly cold and dreary way this year, in our part of West London anyway, but we are at least seeing green shoots. On the verges and gardens if not the economy.
Yesterday the S&P Global Purchasing Manager’s Index (PMI) – a gauge of business leaders’ optimism – was well down in the UK compared to the rest of Europe, especially in the UK’s most vital sector, services. The chief economist at S&P Global said the data “underscored the risk of the UK slipping into recession” and led to a drop in the value of sterling across the board.
Spend any time in our office, however, and it’s impossible to feel anything but optimistic. The office is always abuzz with the conversations of our personal account managers as they discuss with clients the best way to fulfil their plans to buy a property abroad, retire abroad or simply transfer wealth. I’m certainly pleased to be running a brokerage where we talk to clients and help them through this occasionally daunting process, rather than just an app. Why not give your trader a call on 020 7898 0541.
Fortunately, yesterday’s was a fairly modest drop that only returns us to the same point last week. It certainly shouldn’t put anyone off making a trade today or locking in their rate. What it does demonstrate is how fragile sterling is right now. One set of data can send the currency markets stampeding in the opposite direction from that which you want. That’s why if you’re getting through January dreaming of warmer, sunnier Januarys to come, overseas, I would urge you to consider locking in your rate. Then you will know where you stand before next week’s potentially problematic interest rate decisions from the Bank of England and European Central Bank.
Read more about those decisions in our new Quarterly Forecast, for January to March. It contains predictions from the major banks, and then we take an average. The analysis is fascinating and you can see what is coming up that might affect your exchange rate in the near future. Download it here and be better informed.
