Last week I reported Sterling’s recent movements - gaining on the Euro whilst dropping against the US Dollar. This movement has extended throughout the past week as the markets saw even more intensity – against the Dollar for example, Sterling tumbled by an astonishing 2.05 percent.

Sterling managed to keep climbing against the Euro to levels of 1.163, the strongest rates seen in over three months. This ascent gathered momentum from Thursday onwards when interest rate decisions were announced by both the Bank of England and the European Central Bank. Whilst both decisions were in line with expectations in terms of holding interest rates, Sterling found support from the fact that some economists had expected new quantitative easing measures to be announced by the Bank of England to help shore up the economy - this did not materialise as the economy was evidently believed to be robust enough for now which helped support the Pound.

Trichet’s comments following the interest rate decision in Europe on the same day did also not help the single currency as he identified ‘intensified downside risks’ to the economy with some predicting that European interest rates may have to be brought back down at some stage. The resignation of European Central Bank Executive Board Member Juergen Stark, reportedly over policy, also generated uncertainty and provoked more Sterling weakness.

Anyone interested in the Swiss Franc, will be astonished at some of the movement throughout last week. The currency plunged by 10 percent against the Euro as Swiss officials announced plans to intervene in order to artificially bring down the value of the currency and introduce regulations about how much it can grow against the Euro. This made the Swiss France unattractive to investors.

Sterling steadily fell against the US Dollar throughout the week to levels of 1.588. Confidence grew for the US economy as President Obama announced plans about a programme to stimulate jobs with an injection of 300 billion Dollars. There was also positive news concerning the US trade deficit which fell by 13.1 percent in July which was much better than expected.

The mixed picture of Sterling’s current movement, with the Pound growing against some currencies, whilst falling against others, reveals that the Pound itself has little internal strength at present. If you have Pounds to transfer therefore you should consider the current rates as very precarious. The strengthening position against the Euro is really under-pinned by weakness and problems in Europe. Although no quantitative easing was announced in this month’s UK monetary policy decisions, there is still a strong possibility that this could happen at some stage – and when it does we would expect Sterling to lose ground as the market is flooded with Pounds. It’s best as ever, to have target rates of exchange in mind, and make yourself protected against currency fluctuations. The second half of this week sees a wealth of data being released – from more UK retail data to CPI inflation data in the US. It may be another volatile 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.