Sterling starts the week having lost all of its gains from the past month against the euro. Although it remains well ahead of the lows of autumn and above the five-year average, last week will have given anyone committed to a large transaction in the eurozone (without the peace of mind from a forward contract) a bit of a fright, with sterling losing a percent or two against the euro over Thursday and Friday.
It all came down to interest rates – hawkish Europeans and a dovish Bank of England to use the jargon. Anyone with a large mortgage will know all about the rise in interest rates. The newspaper ‘personal money’ pages have been awash with tales of heavily leveraged buy-to-let landlords in trouble. Maybe it’s the time to sell up and buy a holiday home in Europe instead?
Property prices in Europe didn’t generally bubble up during the pandemic period like they did in the UK and US, so perhaps represent a better longer term investment – as well as being rather nice to have too.
If your thoughts are heading in that direction and you’d like to get a start on planning, why not have a chat with your trader, on 020 8108 5163. Smart Currency is open on all days except Bank Holidays this Christmas and New Year, so you could make some significant steps forward in your plans.
There’s not a huge amount on the data front for the markets to worry about this week, but history has shown us not to be complacent if you are committed – financially, legally or emotionally – to a move or purchase overseas.
