Sterling starts a new week, month and season in a strong position against the euro and US dollar. Against the euro it is 1.25% up on the start of the month and close to 2% up on this time last year.
If you want to go further back, GBP/EUR is more than 7% stronger than five years ago; a saving of around £15,000 on a €250,000 property in the eurozone.
So, if you’re keen to let that summer vibe continue with your own property abroad, this looks like an excellent rate to lock in with a forward contract, bearing in mind that between the end of August and September 2022 sterling fell from around today’s level down to below €1.12. This had catastrophic impacts on property buyers’ budgets which I wouldn’t wish on anyone. Why not speak to your account manager on 020 8108 5163 and run through your options for protecting your money?
What could knock sterling off its current strength? This is a relatively quiet week for data, but with the Bank of England’s interest rate decision in 17 days the markets will be on the lookout for any clues. That might include final results for PMI coming through the week, retail sales and house prices, all of which can be influential.
The following week is the one to watch, where big movements in exchange rates could be expected as employment, earnings and GDP data arrives.
The new government is still within its first 100 days, when it can get unpopular policies through in its honeymoon period, so the markets will be watching for comments that might indicate a direction on tax policy in particular as it aproaches the budget on 30th October.
Lots to think about from an exchange rate point of view then. The autumn could be more volatile than the summer. Or you can simply fix your rate and think about a sunnier lifestyle as the evenings continue to draw in.
