If you need a strong Pound for any upcoming transfers, you’ll be more than pleased to hear that the Pound is still soaring – now at nearly a two year high on the Euro, as well as the strongest it’s been on the US Dollar for eight months. This means that we start the week with Sterling at a mid-market rate of 1.227 on the Euro and 1.626 on the US Dollar. Don’t forget it’s possible to book exchange rates in advance of your transfer using a forward contract, so please do get in touch with me if you’d like to discuss securing the current rates.

The Pound showed exceptional resilience last week by suffering only a minor blip in strength when GDP figures indicated that the UK has returned to recession. Before the announcement, most economists expected that the Pound would suffer should a negative figure be released. It was announced that GDP had shrunk by 0.2 percent but the Pound managed to only slightly tumble, before regaining strength over the rest of the week.

The ongoing woes in Europe, coupled with the struggling US economy, are aiding the Pound’s current strength. Investors are choosing the Pound as the ‘safe’ currency to store funds in at present over some other major currencies which is helping it to rise. This was particularly true last week when fears increased about Spanish debt as the credit rating of Spain was downgraded and weak unemployment figures came out, spreading anxiety that Spain’s troubles will continue to bear down on the European economy. Similarly, in the US, more negative GDP figures were released increasing speculation that more monetary stimulus will have to come soon, making the US Dollar less attractive to investors.

Whether the Pound can maintain current rates remains to be seen. Economic data is proving to be fairly mixed with UK consumer confidence coming in low last week, but the ongoing optimism from the Bank of England minutes from the previous week dominating the mood around Sterling. It may be that some investors are assuming that the UK GDP figures will be revised upwards - if they are not, the negative GDP figure could start to eat away at the Pound in the longer term. On the other hand, it could be that if Sterling continues to push upwards over the next few weeks, we could find that the Pound has managed to define a new range and that the current rates become more normal going forward.

In the short term, next week sees several events likely to make exchange rates fluctuate. UK PMI data in the manufacturing, construction and service sectors from Wednesday through to Friday, will help confirm whether the UK really is returning to recession, as indicated by the GDP figures, or whether there is marked growth. There is also UK data in the areas of house prices on Wednesday and Thursday as well as lots of European data on Friday in key areas such as retail.

In the first half of the week, anyone looking to make a transfer involving Australian Dollars, should watch out for the Australian interest rate decision on Tuesday and the impact that this has on exchange rates. As ever, feel free to call me to discuss any upcoming transfers and how to deal with currency volatility.

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.