For those of us who were meant to be going away on holiday this week, the lockdown will be a bitter blow (or a blessed relief, for those who secretly quite like staying at home). The arrival of warm weather – we’re forecast 24°C in London – makes you realise how much we need this to be over by the arrival of summer.
The blow to the economy is what will be exercising many business minds, with the news this morning that the government agreeing to finance 80% of the pay of furloughed staff could cost £40 billion or perhaps even more.
However, with every country more or less in this together, the effect on the pound has been muted. Hence this morning we see GBP/EUR within 1 or 2% of where it has been for the past two Easters.
There are also fascinating things happening to other currencies. Anybody making an Easter trip to South Africa, Australia or New Zealand would have felt very flush – and you can of course lock those rates in with a forward contract if you want to go later in the year.
We are currently preparing our new Quarterly Forecasts, which will be out next week. They are not my forecasts, or even our traders’, but an amalgamation of all the leading financial institutions’ predictions.
One individual prediction is literally not worth the paper it’s written on, but taken together they might be seen to be the wisdom of crowds. I’ll let you know when they’re ready, just don’t assume anyone knows anything about where the pound will go. They don’t!
The “wisdom of crowds” isn’t a phrase you’ll hear much this Easter, where the wise choice is very much to avoid crowds. If we follow the advice now we have a better chance of saving lives, as well as our summer holidays and the economy.
All of us at Smart would like to wish you a very peaceful Easter. We will be here every working day from 8am to 6pm, on 020 8108 5337.
