The pound hit a new one-year high against the euro yesterday afternoon, and has already gone on to beat that this morning, rising by around 0.3% but beginning to fall back again now.
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The picture is more patchy against USD, with sterling back to where it was a month ago after rising and then falling by 2.5% during that time.
The difference between GBP/EUR and GBP/USD is the relative performance on vaccine rollouts. The UK and US are on a similar trajectory, with significant numbers of the population vaccinated and Covid-19 cases falling rapidly, while the eurozone is well behind and still seeing rising infection rates.
So the boost to sterling this morning appears to be newspaper reports that the UK’s vaccine programme is due to ramp up further to three million per week from the current two.
For anyone relying on this boost to sterling when they come to buy a property abroad in the summer, however, I would suggest exercising caution. If the UK can ramp up supply, so can the eurozone. If UK infection rates can fall by a third each week, so can those abroad, and when the marginal advantage disappears, so could the pound’s success.
I said in January that the UK could begin to feel like a different world by early March, and so it has begun to be. But in the two or three months it takes to buy a property abroad so, we all sincerely hope, will the European mainland too.
Therefore, please do consider locking in today’s rate, currently the highest for a year, with a forward contract.
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