Sterling had a very positive day yesterday and is back amongst its highest rates against the euro since before the pandemic began.
On which subject, you don’t hear so much about Covid-19 these days do you?
It’s a bit premature to be casting it into the “where are they now?” file, or to use the word post-pandemic, but even with the still appalling infection and death rates in the UK, coronavirus hardly makes it onto the news any more.
Many of us in the western world are lucky enough to be waiting for our booster jabs and there might even be a hint of complacency kicking in.
However, anyone relying on a stable currency can still find plenty to worry about.
The cost of your holiday home or retirement property abroad, or pension and investment income when sent abroad, can move at any time and with almost any prompting.
The butterfly effect – the idea that a tiny change on one side of the world can generate into a much bigger impact elsewhere – absolutely applies to currency. So does the black swan event (disaster forecasters do love their animal metaphors) – the idea that huge events appear to come out of the blue but are, with hindsight, completely predictable.
Whether it’s tensions in the South China Sea, the imminent collapse of some big Chinese property developers, arguments over the US debt ceiling (you didn’t really expect Republicans and Democrats to work together just because Trump had left the building did you?), gas prices, labour shortages, climate change or anything else – maybe even a new Covid-19 variant – your currency is vulnerable.
You can read more about what will affect major currencies in the months ahead in our forthcoming Quarterly Forecast, which our researchers are currently working on.
In the meantime we have more prosaic matters affecting the currency markets today, such as construction PMI which, if Germany’s construction woes as highlighted yesterday are anything to go by, will be interesting. You can read more about the Purchasing Managers Index here, and why even the opinions of business leaders can have a big impact on your budget overseas.
As ever, if you wish to lock in today’s excellent rate and focus on your own plans, just call your trader on 020 8003 4915.
