It’s been a wobbly time for sterling over the past few weeks against the euro. Looking at the GBP/EUR graph you can see sterling’s strength building over the spring but for the past three weeks it’s been bobbling up and down and essentially going nowhere.
While no-one can predict the future for a currency, I certainly wouldn’t put any money on sterling restarting an upward trajectory.
This will be a quiet week for data in the UK but the ongoing battle between central bankers and inflation is really the only story in town. The more influential data will be coming from the US this week, with ‘non-farm payrolls’ on Friday the best indication of the capacity of the US Federal Reserve to keep on increasing interest rates to beat inflation.
Britain, as you may have noticed, has far and away the worst inflation of the G7 countries.
Not all bad news though: for anyone thinking of retiring to Spain, while inflation is now down to 1.9% their UK pension will increase at the UK rate, currently 8.7%.
For most people, the idea that that would be a main motivating factor might seem a bit silly. Prices can change direction at any time. Similarly with exchange rates. They will go up and down, and it’s probably better to focus on your own plans for a splendid new direction in life, lock in your rate so you know that’s affordable, and make the move.
You can lock in your rate for the year ahead with a call to your trader on 020 8108 5163.
