While yesterday saw the markets close with the exchange rates between the pound, dollar and euro virtually unchanged, if we take a longer view, sterling may be in trouble.
In the past week US President Donald Trump signed an executive order adding a $100,000 visa application fee for skilled workers looking to move to the US. It’s a move that economists say could severely harm the US economy, but it didn’t lead to jumps in the value of the pound and euro.
In part, this may be because multiple reports are painting a dismal picture of the UK economy. The OECD forecasts that the UK will have the highest inflation in the G7 and a new survey from S&P shows that growth in the country has hit a four-month low.
Over in Europe, the inflation picture may be less dire, but manufacturing reports show a similar slowdown as Trump’s tariffs continue to bite. There are simply fewer goods being sold and industries around the world are feeling the pinch.
With industries cooling, inflation rising and tariffs still incoming, it makes the market and their associated currencies deeply unpredictable.
To secure certainty for your budget, lock in today’s GBP/EUR rate with a call to your account manager on 020 8003 4915.
If we focus in on just the pound and dollar as an example, in the last week alone, the pound has lost 1% on the dollar. That decline eases out to just a 0.04% loss if you look back over the month and GBP is still up significantly on the dollar since President Donald Trump took office. However, an overall decline over the month, speeding up in the past week could be a sign momentum is turning against sterling.
While the pound is currently enjoying a high of purchasing power in the US – particularly in large transactions such as home purchases – in the long months between an offer being accepted and completing on a property, a swift swing in exchange rates could see you needing to foot a much larger bill on completion day.
With the direction of travel unclear for the pound, euro and dollar, the only way to secure certainty is to lock it in.
