The Pound has accelerated further to reach a nineteen month high on the Euro. At a current mid-market rate of 1.220, this is a great time to make a Sterling to Euro exchange or pre-book in any transfers at this rate using a forward contract.

Spanish debt auctions are playing a key role in currency shifts this week, following on from the role that difficult-to-achieve Spanish budget targets have played in making currency investors nervous about the health of the Euro-zone. The first Spanish debt auction earlier this week, went smoothly. With the UK strongly exposed to problems in the Euro-zone, the success of the first auction helped Sterling to maintain its strong position. This includes a rise to a two week high on the US Dollar to a rate of 1.602 as investors became more keen to buy currencies other than the ‘safe’ US Dollar.

UK data has also been positive this week in helping to fuel the Pound. UK inflation rose to 3.5 percent in March - helping to suggest that the Bank of England will not need to inject more stimulus (quantitative easing) into the economy next month which would be negative for the Pound. There was even more evidence for this on Wednesday when the Bank of England minutes from the last policy meeting revealed that policy members voted 8-1 against further stimulus. Significantly, this meant that one policy member in particular, Adam Posen, had changed his mind since the last meeting making it much more unlikely than more stimulus will be introduced and pushing the Pound even higher.

Sterling’s strong position will be tested today however when Spain holds another auction to try and sell ‘longer-dated’ debt. This is a more difficult auction for Spain than the one held earlier in the week. Should this go well however, Sterling could find even more strength particularly on ‘safe’ currencies such as the US Dollar.

Other events that could have an impact on exchange rates before the end of this week, include events and statements made at the G20 meeting today, as well as European consumer confidence statistics and figures on US home sales. Retail figures from the UK on Friday are expected to be fairly disappointing so bear in mind that this could influence Sterling’s currently robust position. Feel free to give me a call if you’d like me to keep an eye on rates for you this week.

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.