The pound took an early dive against the euro this morning to its lowest point since October last year, but recovered very quickly. Traditionally we call this sort of market “choppy”, with short, sharp movements.
Looking objectively, it may seem counter-intuitive that the pound falls against the currency of the countries most affected by coronavirus, including Italy, France and Germany. You might expect the pound to be doing well against the euro and poorly against the US dollar, when in fact the reverse is true. Or at least, it was at 6am this morning (it’s a fast moving world).
The answer, apparently, is due to global capital movements as businesses react to a possible global recession.
In the meantime, I’m glad to say that our first international property event of the year, Your Overseas Home, was not only very well attended but someone put down the deposit on a property there too. It was in Cyprus, and one can certainly see the appeal of life on a Mediterranean island right now.
I hope those purchasers quickly take out a forward contract, as while their deposit commits them to buying, the price of a €200,000 property was around £173,000 on Saturday afternoon (at the interbank rate), and £175,000 by first thing this morning. Such swings are highly likely to continue.
There’s a lot happening this week, most notably the Budget on Thursday, as well as the Eurozone GDP, the European Central Bank interest rate decision and US and Chinese prices.
Please do call your trader on 020 8108 5337 to discuss what all this might mean for your currency strategy.
The Your Overseas Home roadshow continues next month in Manchester, and then onto Cheltenham in June. Get tickets for those events here.
I wish you all a very healthy week, including financially in Thursday’s Budget.
