Sterling has gained value once again during Monday’s trading, following on from the positive spike seen towards the end of last week. This move is a timely reminder to all investors of how unpredictable the currency markets can be, as only a week ago it looked as if the EUR’s momentum was going to carry it back down towards 1.30. Fast forward and GBP/EUR rates have touched 1.40 at today’s high, providing clients with some of the best buying opportunities of the past 6 years.
It is not just the EUR that has taken a hit, as the Pound is up across the board. GBP/USD rates have hit 1.56 at today’s high and GBP/AUD rates are started to creep back up towards 2. The feel good factor following last week’s election is driving Sterling’s value higher, with any uncertainty around the election now removed. Personally I did not see such gains coming quite as quickly but then few had anticipated a Conservative majority. In the end the improvement seen inside the UK economy over the past couple of years has helped to deliver the Tories and Prime Minister David Cameron another term in office.
I do feel that the EUR will find support around 1.40 and I do not expect a sustained move above this level unless Greece defaults on its debt, a scenario I still feel is unlikely to occur. With the EUR still having greater scope for improvement when you consider recent history on the pair, I would look at Sterling’s recent recovery as golden opportunity that should not be missed.
Looking ahead and Wednesday is likely to be a key day this week, with UK unemployment & Eurozone Gross Domestic Figures (GDP) likely to dominate headlines. We also have the latest Bank of England (BoE) quarterly inflation report and this could be key to any fluctuations on GBP exchange rates.
If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on [email protected]