There was a flurry of excitement yesterday as GBP/EUR strengthened by 0.75% to its best for five weeks, and we were prepping for a Rate Alert. However, it weakened just as quickly and ended up slightly down on the day.
That leaves the pound to euro rate a little down on where we had got used to in late 2024 but still considerably stronger than the average of the past few years.
Yesterday’s brief boost was a reminder of a popular product that we offer, a market order. This is where you can target an exchange rate – either a higher rate that you would like to achieve, or a lower rate that you can’t go below – and if it reaches that point we automatically buy the currency for you. It means that you don’t have to constantly monitor the markets. Speak to your account manager about market orders on 020 8003 4915.
Yesterday’s sharp movements were a symptom of general jumpiness in the markets ahead of the Bank of England (BoE’s) interest rate decision tomorrow. It is widely expected to cut rates by 0.25% to 4.25%, but the markets will be just as keen to get a reading on whether they will come down next month as well. So expect more volatility, and if you have any worries about being able to fulfil your commitments, do call your account manager asap.
The background is a world where different industries are alerting the Bank of England and the government to the real threats to livelihoods from Trump’s trade war. Yesterday the UK service industry raised the alarm, with the Purchasing Managers’ Index (PMI, a handy survey of business pessimism and optimism) turning negative for the first time since late 2023.
Tomorrow there will also be house price data, both from the Halifax and from RICS (The Royal Institution of Chartered Surveyors). Will there be any hope for those waiting to sell houses to buy overseas? Current predictions are a little more hopeful.
