Unusually for a Monday in recent months, sterling starts the week in uncertain mode.
This week is extremely quiet for data, especially compared to last week, where just about every release, from new jobs, to rising prices, to retail sales and consumer confidence was supportive of sterling.
So what else could move the market?
In theory it should come down to vaccine efficacy and rollout, not just in the UK but in the eurozone too and US too.
Britain had its second-highest vaccine numbers on Saturday with 762,000, taking the population to 57% having had a first vaccine (72% of the adults) compared to 35% in the Eurozone.
Even more important than the numbers vaccinated is the efficacy, which appears to be high even against the Indian variant, according to a new report from Public Health England.
That should all add up to a summer flying abroad if you want to. Spain now allows British visitors without a PCR test, adding to list of countries we can travel to, which includes Greece, Italy and Portugal. The final piece remains the UK government putting these countries on the “green list” for travel so you won’t need to quarantine on your return.
I say that “in theory” this is what will move the market positively, but currency markets have a habit of not following the script. Since early April there has been no clear direction of travel for sterling and it really could go either way.
There is also the possibility that the June 21 “complete” reopening will be delayed to August to protect the unvaccinated population, which cannot be discounted.
Lastly, as Europe starts to move out of the worst of the pandemic so the marginal advantage will shift back to Europe and sterling could struggle.
So many variables to consider!
Perhaps the best thing to do is to forget the variables and consider what we know now, which is that sterling is worth 5% more than for the majority of 2020, meaning that for a €200,000 property you’re saving nearly £10,000.
You can lock that rate in with a forward contract for the year ahead – just call your trader on 020 8108 5163.
