The pound starts slightly on the backfoot this week, with a 0.5% drop against the euro compared to last Monday.
It’s all relative though, and GBP/EUR remains very close to its strongest position since the Brexit referendum in 2016.
The cause for that strength is European related too. Specifically, it’s the division between doves and hawks on monetary policy in the two central banks. While the Bank of England (BoE) interest rate setters look like they will raise interest rates as early as 4th November and steadily through 2022 – albeit slowly – the European Central Bank (ECB) has said it will wait until 2023. In financial parlance the BoE is “hawkish” and the ECB “dovish”.
Hence the money is flowing into the UK and the pound is rising.
When you consider that this means you are getting thousands more pounds to spend on an average property abroad, you might consider thanking your good luck and locking in that rate with a forward contract.
You can do that with a call to your trader on 020 8108 5337.
The global economy is very finely balanced right now and currencies are highly volatile. There are many and diverse reasons why the pound, euro or dollar could move abruptly. A drop in sterling would send the cost of a European property up, and vice versa.
But which will it be?
Read our new quarterly forecast to understand what is likely to happen to global currencies in the next few months. It contains highly readable analysis combined with deep insight from the experts and, of course, those all-important predictions for the pound.
