The pound bounced up in early trading this morning, as the aftershocks of the General Election continued to be felt through the currency markets. On Thursday night we hit a three-year high against the euro within 5 minutes of the exit poll showing a decisive Conservative victory, and we continue to see volatility in the market.
Overall though, maybe you’re disappointed the pound didn’t stay higher? After its exit-poll bounce, the pound dropped back a cent or so very quickly. This was because a Johnson victory had been effectively priced into the pound before Thursday. Today’s rate is in fact higher than the highest of the major banks’ projections, as highlighted in our most recent currency forecasts, still free to download.
This week the markets will be settling into the new reality of Brexit finally being delivered within 50 days. We may have already seen sterling at its highest for the foreseeable future. The markets reacted positively to the certainty, but now the Government faces the challenge of negotiating a trade deal. There is also an increased clamour for a Scottish referendum.
For anyone planning on buying a property in Europe, the next year will be crucial in two ways. Firstly, the transition period – scheduled to end on 31 December 2020 – offers the chance to become resident in the EU and retain all your current EU rights to health, pensions and residency.
Secondly, you can lock in your exchange rate for the next year with a forward contract, on payment of a small deposit. If, over the next year of intense EU negotiations, including a potential no-deal, the pound should slip, you will be guaranteed today’s exceptionally good rate.
Spend a few minutes on planning with your trader today, on 020 8108 5337, and you can secure peace of mind for the next year.
