An extremely strong week for Sterling against all major currencies, and surprisingly a potential ‘Grexit’ did not play a part. Extremely strong wage growth which came in at 1.2% for last month meant that the timeline for the UK raising interest rates moved forward significantly. The knock on effect of this was Sterling strength across the board, as a result we now have hit 1.40 just before the end of trading today.
The Greek situation will be governing rates by the start of next week. While it has deteriorated I am still confident that a Grexit is unlikely. Thousands gathered in Athens to stay in the Euro. A last minute deal is simply expected so that the Greek delegation can maximize what they want out of an agreement. To default and leave the Euro will be ruinous. But market uncertainty in the meantime may push rates a little bit higher. It is best to play it by ear and watch the news. Call 01494 787 487 on Monday morning and ask for Daniel, I will have a clearer picture of the situation and what the roadmap for currency rates will be for the week, which I can share so we can manage your currency requirement effectively.
The main winners this week were those looking to buy USD. While a potential interest rate rise for the UK was moved closer from the horizon, the opposite was true for the US. This was a result of a dovish stance presented by the FED following poor inflation, wage growth, and no change in unemployment for the month. The rates are now the best they have been in 2015. Because the rates are so favourable, I would encourage people who have a Dollar requirement to try and move sooner rather than later.
It is very hard for currency exchange rates to break 1.60. Normally the markets start to buy dollars while the rates are still favourable and this causes the rates to fall once more. What I would suggest is emailing me over the weekend on firstname.lastname@example.org to discuss setting limit orders on rates slightly higher then they currently are at 1.585, to try and get the most Dollars possible with your sterling and before the markets begin to correct themselves. Even if that rate is hit for a second before the Dollar begins to strengthen again, you can buy at the high of the market, something few manage as the market has been so volatile recently.
Another winner this week has been GBP/CAD rates. Now at a 7 year high, demand for more information on the Canadian Dollar has led to a sister site purely dedicated to this currency to be developed. Click here for expert opinions on buying and selling opportunities for the Canadian Dollar.