Before January, today’s only slight change of -0.17% for GBP-Eur rates would be quite an average day for market movement. Honestly, I have found myself bored.
The news of Greece, a Euro recession, and a British election have combined together to make recent months some of the most volatile in market history. 3 cent daily swings were not uncommon. A key feature for Sterling rates this week were the massive difference between what was expected for the Quarterly Inflation Report and what was delivered.
A positive report would have strengthened arguements for a potential UK rate hike in early 2016. Markets priced themselves ahead of the event expecting good news, but when the opposite was delivered the fall-back was substantial. Sterling corrected hugely and since then we have been marooned in the 1.38’s.
Since this Mark Carney of the Bank of England has downgraded the UK growth forecast, which has cast doubts about potential rate hikes in early 2016.
Sterling got a substantial boost from an unexpected election majority. The UK did not have to deal with any messy coalition negotiation, and we found ourselves on the brink of 1.40. Since then we have hovered around this level.
Personally, I feel the currently negative forecast about the European situation can only improve – and has been since data came out about the effectiveness of their Quantitative Easing scheme. And the news about Greece has continued to prove more fanfare than any true threats of a grexit. You shouldnt rely on any more Euro weakness to improve the rates for you. Many people are moving on properties while they are cheap, and investors
If I had a currency requirement over the next few months, I would be tempted to move now in case more unexpected news emerges. This is a fantastic time to be buying Euros, and these rates can be pegged for up to 12 months, so do not worry if you feel you cannot take advantage of them now.
Email me on firstname.lastname@example.org over the weekend to discuss your options for stability in an uncertain market.