Last week was not a happy seven days for the Pound which fell overall by 0.58 percent against the US Dollar and a significant 1.59 percent against the Euro.

There was a particularly gloomy moment for Sterling last week when it touched the lowest levels so far in 2011 against the Dollar. A number of factors have been at play in Sterling’s demise, not least, a lot of talk about quantitative easing – a method of helping to reignite the economy that the Bank of England are thought to be drawing ever closer to. This was intimated by both Bank of England policy maker Martin Weale and referred to by Business Secretary Vince Cable last week.

Sterling was also not helped by the fact that currency investors took flight to the safe haven of the US Dollar in the early part of last week as rumblings over European debt sales and credit ratings caused currency investors to be nervous. The speculation over a possible Greek debt default did also cause the Euro to drop to a six month low on Sterling, but the single European currency then picked up over the rest of the week. This was due to certain progressions helping to calm nerves such as the news that China would buy up Italian bonds.

Most of the data coming from the UK last week did not help to spread much hope that Sterling might pick up. Although retail sales were not quite as poor as expected, the news of rising unemployment, lower wages and rising inflation expectations have not painted a particularly optimistic picture of the UK economy. This is all making the chance of monetary stimulus in the form of quantitative easing even more likely, with most wondering not if but when it will happen. This is likely to make Sterling less attractive to investors going forward and there are likely to be regular jitters when the Bank of England announce their monetary policy decision each month.

UK based property investors should therefore be cautious as the Pound doesn’t currently have much on the horizon in terms of a life line. Although the enormity of problems in the Eurozone could see the Sterling Euro rate improve, it’s equally as important to remember that the UK is also vulnerable to these problems with Europe being a main trading partner as well as there being strong financial links with UK and European banks. Don’t forget that it’s possible to book yourself into a rate of exchange prior to your money transfer to protect yourself from the uncertainty of fluctuations.

Key data and events to look out for this week include the Bank of England minutes on Wednesday which will reveal the voting and discussions that took place at this month’s monetary policy meeting – this could bring quantitative easing event more into the spotlight if discussions about this feature on the minutes. There are also UK house prices and consumer confidence figures on Monday as well as UK public net borrowing on Wednesday.

For further advice on how to save thousands on your property purchase compared to the bank, protect yourself from currency movements or set up regular mortgage transfers, get in touch with the dedicated Property Secrets currency specialist: Nigel Hodges of Currency Solutions on +44 (0) 207 740 0000 or by clicking HERE to leave an enquiry.