2026 has begun with a stock market rally, the daring capture of a sovereign leader, and American threats against Greenland of all places. We can now add a strong start for sterling to that list, which is starting to read a little like a bad Hollywood script.
The pound has strengthened by a cent against the euro since the start of the year, taking it to its best rate in almost four months. If you’d like to take advantage of that before the next left-field plot line, make sure you lock in today’s rate by calling your account manager on 020 8003 4915.
While the topics feel make-believe, the impact on your budget certainly isn’t. Buying a home for €250,000 on Monday would have cost you almost £2,000 more than this morning, proof that leaving things up to chance could well hit you hard in the wallet and ruin what should be a joyful process.
Currency markets (and indeed the entire world) are still digesting the stunning capture of Venezuelan president Nicolas Maduro last weekend. European countries are becoming increasingly worried that Trump will ditch the espionage theatrics and opt instead to kick down the front door in capturing Greenland – a NATO member by virtue of its ties with Denmark. Keir Starmer, Emmanuel Macron, and Friedrich Merz, along with the leaders of Denmark, Italy, Poland, and Spain, signed a joint declaration which stated “It is for Denmark and Greenland, and them only, to decide on matters concerning Denmark and Greenland”.
Interestingly, rumblings around Greenland seem to be having only a minor impact on European markets. Yesterday, we learned that German inflation massively undershot expectations in December, coming in a 1.8% in the preliminary release against an expected 2.3%. In theory, that reduces the likelihood of an interest rate cut at the next European Central Bank meeting, an assumption that lifted stock markets, already experiencing a strong start to the year.
But the pound will have to wait a little longer for its time in the sun. It isn’t until the middle of next week that we’ll get substantive new data on the UK economy. By then, the value of your budget against the euro is almost guaranteed to have shifted.
