It’s been a whirlwind week for currency since I last wrote to you.
After President Donald Trump attempted to fire Federal Reserve Governor Lisa Cook, threatening the independence of the US central bank, the dollar ended the week significantly down on the pound and euro. However, as the new week began, Monday saw the dollar climb and the price of gold hit a record high, as uncertainty saw traders put their money in a safe haven asset.
Then Tuesday saw the value of the pound and euro upended.
To secure certainty for your budget, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
Following a small government reshuffle on Monday, Tuesday morning saw the cost of UK long-term debt hit its highest level since 1998. As debt prices climbed – and the pressure the cost of servicing those loans would place on the government was revealed – the value of the pound plunged.
Within hours, the pound had lost more than 1% against the dollar, a reversal of its position the week before. Sterling also fell against the euro, losing 0.6% by the end of the day.
Europe isn’t immune to the rising debt prices, however, and the cost France’s long-term loans also hit a 16-year high. This puts huge pressure on France’s Prime Minister, who had already called a confidence vote for next week. If it goes against him, it could see the collapse of the French government.
These rapid changes in the market are unpredictable, as is the impact they will have on the exchange rates in a week’s time – let alone a month’s. If you’re looking for confidence in your transactions abroad, it is much safer to lock in your rate now.
