The currency markets can be a riddle, wrapped in a mystery, inside an enigma, and if you want to know how pointless financial analysts’ predictions are, just check them a week or two later.
Hence, in our last Quarterly Forecast, where we showcase the predictions of leading financial institutions, not one of the major banks’ soothsayers predicted GBP/USD would be as low as it is right now, let alone the depths sterling plumbed last month. They only did a little better predicting the pound against the euro, with the vast majority expecting it to be around the €1.20 level or higher.
So, if you had been relying on such predictions for a major currency transaction you would have been severely out of pocket and needing to find thousands more to complete on a property purchase.
That’s why at Smart we never make predictions, but focus on risk management and ensuring you can fulfil your plans safely. Do, please, talk to your trader on 020 8003 4915 and discuss locking in your rate if buying abroad this summer, or cancelled flights and queues might be the least of your problems.
Re the enigma of sterling success and failure, this week has been a case in point, with sterling recovering despite, well, everything.
Are the currency markets so fiendishly clever that they’re 10 steps ahead of the rest of us in their analysis of global economics? I suspect not. Or is all just rumour and guesswork?
Either way, today’s rate looks like a rare opportunity to grab an excellent rate, so do make that call to your trader.
