Following its steep climb last week, sterling has taken off again this morning against the euro, albeit in a much less dramatic fashion.
The prompt has probably been the Purchasing Managers’ Index (PMI) yesterday, which was upgraded to 50.9 for services – denoting overall optimism in the sector, and unlike most of our global counterparts. Several other countries also had their services PMI uprated, but most are still negative and anyway are perhaps less dependent on the service industries than the UK, and so the markets reacted by supporting sterling.
As highlighted by two think-tanks this week, the UK is a global powerhouse for the service industries, especially in finance and ‘fintech’, of which Smart Currency is an award-winning part. We have just published our annual results for 2022-23 and are proud of our continued growth, powered by a strong service ethos and continued innovation (and by employing many of the most dedicated and resourceful people in the business).
Anyway, enough trumpet blowing and back to currencies.
Sterling’s gains are very much on a knife-edge, particularly with the governor of the Bank of England speaking today at 11. While the pound has gained from the markets getting the message that the Bank will keep interest rates higher for longer than in other economies, there is also a perception that once inflation is more clearly under control in the UK that interest rates here will have to come down faster.
In which case the pound looks likely to suffer as we go into the spring of 2024, just when many people seek to buy a property abroad, or make that long-awaited retirement.
With GBP/EUR currently at a three-month high, and actually quite close to a 15-month high, it might be unwise to hold out for even more.
Why not lock in your gain and spend Christmas planning your property and/or new life abroad, with a secure budget in place? Just give your trader a call on 020 7898 0541 to sort that out.
