It’s a despondent start to the new week for any UK based property investors as the Pound has lost out steadily to other major currencies over the past week. Sterling kicks off the week at the 1.12 mid-market level against the Euro and 1.63 against the US Dollar, having lost ground by 1.31 percent and 0.58 percent against the currencies respectively.

This was a sharp fall from the previous week when Sterling had reached some recent highs, in particular the best rates for three and a half months against the Dollar touching a rate of 1.66. Some analysts are suggesting that Sterling was actually over-priced throughout the previous week, as it reacted to bad economic events in Europe and the US, and was ready for a fall bearing in mind the ongoing lacklustre picture being painted of the UK economy. This was emphasised last week as it was revealed that British retail sales fell at their fastest pace in almost a year, consumer confidence edged down further in July and GDP figures for the second quarter were not revised upwards but remained at a measly 0.2 percent. Added to this was the fact that some speculation has started to circulate in the press, that additional quantitative easing may be required to help kick start the UK economy, with interest rates now not expected to rise until 2013.

The Pound therefore found itself under renewed pressure in a week where currency investors were all awaiting a large economic news event which lent more strength to the Dollar as the week progressed – this was the widely anticipated annual speech made by Federal Reserve Chairman Ben Bernanke on Friday. The crux of the anticipation for investors was whether Bernanke would announce another round of quantitative easing for the US to bolster growth (last year he announced the second round of quantitative easing). It was thought that any hint of a third round of easing would help sooth increasing fears about the US economy heading back into recession. In the event, Bernanke did not announce this but did concede that the Federal Reserve would meet for an extra day in September to discuss whether any additional ‘tools’ needed using to help stimulate the economy. It is possible therefore, that the Dollar strength seen throughout the last week may start to subside.

Key events to watch out for this week will be the run of PMI data in the UK which starts on Thursday, with the latest growth figures from the manufacturing and construction industries coming out before the end of the week. US unemployment and non-farm payroll data also at the end of the week could see some re-adjustment in the Dollar. As the European debt crisis rumbles on, following the purchase of more debt by the ECB last week, there will as ever be an element of uncertainty to how markets will react to the ongoing situation. Give me a call or register an online enquiry if you’d like me to watch the rates for you.

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.