When going through a crisis it’s easy to think that the world revolves around you and you alone. So when yesterday the pound came within a whisker of its highest rate since last May you might have assumed that something interesting was happening in British politics or the economy.
It wasn’t really. It was more a case of problems in the eurozone, which was why the euro also fell against the US dollar. There is concern in Europe that even if the Withdrawal Agreement does pass, the effects on European businesses will be negative. There was also worrying – for the EU – talk from the Hungarian Central Bank’s governor that some countries might need to abandon the euro, as they were not benefiting from it any more.
At Smart we always emphasise that trying to predict currencies is a mug’s game. They can be affected by almost anything, either in your own country or in Hungary. Or indeed by nothing happening. Such as an expected interest rate change not happening, not only here, but in the eurozone or US too.
Having said that, it wasn’t a great day for the Conservatives yesterday, as we start the five week election campaign. If we’re confident about anything it’s that the pound will be moving all over the place over the next five weeks, and the aftermath of the election.
Talk to your trader on 020 7898 0541 to lock in your rate for the year ahead with a forward contract.
