Sterling has weakened to almost 10% below where it started the year against the euro and 7% below the US dollar.
The cause of the latest fall is Brexit, and the apparent view of the government that an Australian-style trade deal with the EU (which is very similar to no-deal) is the likely outcome if talks fail.
Sterling may also have been buffeted by reports that many scientific advisers believe that the lockdown restrictions are being eased too early and that the UK is on “a knife-edge”. You might wonder why a spike in Covid-19 cases in an English city, Leicester, has led to the government “considering” a local lockdown, while when Berlin faced a similar spike the lockdown was re-enforced and fences were erected around the affected area virtually overnight.
The head of the European Central Bank, Christine Lagarde, has said that Europe is over the worst of the economic hit from the pandemic. This is great news for anyone planning on moving to an EU country before the transition period ends, but suggests that waiting for a fall in property prices post-pandemic is a waste of your time.
With recent falls in the pound potentially the start of a torrid summer for sterling, if you are planning to transfer money in the next year, do speak to your trader on 020 8108 5337.
A forward contract will lock in this rate for the year ahead.
