If you had cheerfully made an offer on a property in France, Spain, Portugal or elsewhere in the eurozone last week and planned a happy weekend imagining a sunnier lifestyle, you would have been alarmed to see the pound suddenly crash against the euro late on Friday night, then again on Sunday afternoon.
The drops instantly put a couple of thousand pounds on the price of a €200,000 home.
It looks like these two were glitches, ‘fat finger’ errors perhaps, rapidly corrected. But the alarm they caused should act as a warning to anyone with serious currency commitments.
When currencies fall, especially with the pound, less so with the euro and US dollar, it is usually rapidly and without warning. So do talk to your trader on 020 8108 5163 to book in a forward contract and sleep a little easier.
As it is, sterling starts a busy week in the financial markets close to 1% down on last Monday against the euro but unchanged against the US dollar.
That could all change this week though. Tomorrow the unemployment data will be out, on Wednesday inflation, on Thursday Gfk Consumer Confidence and on Friday retail sales.
These are all key economic indicators with the ability to move sterling. If the readings show falling inflation but the economy otherwise in good shape, sterling could take a sharp turn downwards.
And that won’t be down to fat fingers. That’s why at Smart Currency we recommend adopting a proactive, risk-mitigation strategy that focuses on achieving your plans and not risking your money to the markets.
