While the UK markets were closed for the weekend and Christmas, global trade (including in currencies), continued. The big story is the opening up of the Chinese economy from Covid restrictions, strengthening commodity-backed currencies like the Australian and Canadian dollars and forcing the oil price up again.
Closer to home, the euro has also had a generally positive week, including at the expense of the pound.
Sterling is down across the board. So whether you’re planning a long trip to Australia or a property purchase in Alicante, the question you might be asking is, will the losses continue?
The short answer, of course, is that no-one knows. But there are hints.
While the oil price has risen, gas prices in Europe have fallen, with the promise of a warmer weather forecast in early January. That’s been good for the euro.
The rise in stock markets due to the end of restrictions in China would normally support sterling, but hasn’t this time. One worry for the markets is that of all the G7 economies the UK is the only one with an economy still smaller than pre-Covid, now nearly three years ago. As the UK sits in what could quite possibly be the deepest recession among all the major economies, what, if anything, is happening to reverse that?
Those people with a major currency transaction coming up will need to be realistic about the UK’s economic prospects over the next few months as their overseas property buying budget, or other wealth, is at stake.
Our traders will be working hard over the last three working days of the year, so do give yours a call on 020 7898 0541 to discuss locking in your rate, or making a currency transaction today. We are very much open for business!
The only data release of note the rest of this week is Nationwide House Prices, which is expected to fall again.
Lastly, fancy a Fortnum and Mason hamper to brighten up January? With our New Year referral bonus, on top of the usual £50 bonus you and your referral could win a Fortnum and Mason hamper each! But be quick, the prize draw ends on the 6th January 2023. Make your referral here!
