It's been a pretty good start to the week for the Pound, rising a little over 1% against both the Euro and the US Dollar. First thing on Monday morning, Sterling was trading at a 2 year low against a basket of other currencies, but the last few days has pushed it higher. Below shows how GBP/EUR has moved so far this week:
What caused the Pound to rise?
The reason Sterling has gained is firstly yesterday's performance of EU stocks. They rose very nicely when markets opened yesterday, and this in turn pushed currencies higher that move in tandem with riskier assets. The Pound is seen as a risky currency, so as investors were buoyed by rise in EU stock markets, they started trimming bets against the Pound and there was a push to buy Sterling while it was at a 2 year low.
Secondly, the inflation numbers this morning were slightly higher than forecast, giving Sterling another nudge upwards, pushing GBP/EUR rates almost 2 cents higher than the lows of early Monday morning.
Will it keep rising? It's unlikely. I don't think this is the start of a sustained recovery, more a slight lift due to risk sentiment. The underlying reasons the Pound fell 4 cents in the preceding 10 days remain, and I think this is a short term spike. Those that need to convert Sterling to another currency may wish to consider taking advantage of this spike to the upside.
If you have a currency transfer to make and would like to see what exchange rate I can offer, then click here to send me a free enquiry. I'm afraid we don't deal in cash or holiday money, but if you need to wire funds to an account overseas, or convert a foreign currency back to Sterling, then I can help you achieve commercial exchange rates up to 5% better than banks or other currency brokers may offer.
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