Sterling starts the week in a much better position than last Monday, having gained around 0.7% against the euro and 1.3% against the US dollar.
The pound’s strength against USD has come from the diminishing expectations of early interest rate cuts from the US Federal Reserve. Meanwhile, members of the Bank of England Monetary Policy Committee (MPC) seem to be increasingly inconsistent in their comments on whether UK interest rates should come down sooner or later. With the MPC’s next vote set for 9th May, it could be a feverish 10 days ahead as the markets try to second guess interest-rate setters who are not entirely confident themselves.
Then there is the European side of things. Could they start cutting interest rates first? Today and tomorrow are going to be packed with inflation and economic data from the eurozone which will be guiding the hand of the European Central Bank…
Did you know that the phenomenon where you repeat a word endlessly and it loses all meaning and sounds ridiculous, has a name: “semantic satiation”? We have been talking about interest rates so much and for so long that I wonder if we have reached a point of semantic satiation with them, which is getting in the way of truly meaningful conversations
So, at Smart Currency our first question with clients is always about what they want to achieve with their transaction. Could it be a safe property purchase overseas where you do not have to find thousands more at the last minute, a stable income if retiring overseas, an inheritance or transfer of wealth sent without risk?
There are serious potential risks to your finances that arise from changes in interest rates. But removing those risks is the main aim of most of our clients, and that’s much easier than guessing what is in the head of central bankers.
So please speak to your trader on 020 8108 5163 to discuss your plans, which may include fixing your rate with a forward contract.
