The pound has made significant gains against a host of currencies as uncertainty hits the global financial markets. Yesterday the pound rallied to a near 3 month high against the Euro while over the course of the week we have seen gains of 10 cents versus the NZD, 7 cents against the AUD and 5 cents against the CAD while stabalising against the USD.
Yesterday there were two major interest rate decisions in the UK & Euro zone. The UK has now kept its base rate of interest on hold for 29 months to stay at record lows of 0.5%. Interest rates are one of the main drivers of the money markets and for anyone hoping to see continued gains for GBP are unlikely to get any change from the Bank of England as most analysts expect to see rates remain on hold until well in to 2012.
In the Euro zone they too kept the rates on hold and a negative outlook by the ECB helped the pound reach highs after the decision. They have recently raised interest rates twice in the space of 4 months and this has kept the Euro overvalued in my opinion. We do have an outside chance of a rate hike before the year end and to me this will keep the Euro relatively strong, even with the much documented troubles for the PIIGS of Europe.
If you need to transfer funds over the next few weeks, let me know and I will keep you informed of market movements. Even if you don’t have full availability of funds, you can reserve your rate for a small deposit with a forward contract. Please feel free to call to discuss on 01494 787 474. Just ask for Ben and quote Pound sterling forecast. Alternatively you can email at [email protected]