Thankfully for those needing to make Sterling to Euro transfers, the Pound made some modest gains on the single currency throughout last week – this is even despite Europe raising interest rates again on Thursday up to 1.5 percent whilst UK interest rates were held at 0.5 percent once more.

The Pound has gained just over 1 percent on the Euro over the past week which is very good-going, especially given the interest-rate manoeuvres. The actual interest rate is still only kicking off the week at around the fairly uninspiring 1.12 levels but this is still an improvement on the 1.10s of the previous week. Sterling found strength last week from some very surprising PMI manufacturing data which completely stunned currency markets as it was revealed that manufacturing production had shot up for the month of May by 1.8 percent – far above and beyond the market forecast of 1 percent. This is the first really positive piece of economic news to come out of the UK in a while so although it is a good sign of growth in this individual sector, it is really only a single grain of hope and those needing a strong Pound should consider whether they would like to take advantage of the 1 percent increase on the Euro over the past week whilst this manufacturing data still has an influence.

The other factor which helped Sterling and managed to tarnish the news of the European interest rate rise (which would normally lift the Euro more than we saw last week) is that Europe was hit with a credit downgrading on Portugal by Moody’s Ratings Agency. Portugal’s rating was lowered to ‘junk’ status which warns that Moody’s believe the country may need another bail-out. This bad news limited the impact that the European interest rate rise had on raising the single currency last week but it is still important to note that in Trichet’s speech on the same day, he dropped many hints that the European Central Bank will be looking to raise interest rates again soon in the upcoming months. He also commented on the Portuguese issues and downplayed the extent to which these would negatively affect the rest of Europe. Again therefore, although the Pound managed to gain back on the Euro last week, looking to the longer term, there is still a possibility that continuing interest rate rises from Europe will continue to damage the Sterling to Euro exchange rate.

For those making property investments in the US, Sterling’s most recent movements against the Dollar over the past week have been much more tempered with Sterling moving downwards against the US Dollar by 0.36 percent in total. This is partly due to Sterling managing to push upwards on Friday when the US experienced a dire employment report. Looking over the past month as a whole however, is unpleasant viewing, with Sterling having dropped by 2.51 percent on the Dollar in total – quite a significant amount of money therefore on a property value. Economic data from the US however, as Friday’s employment figures showed, is still very patchy and so future movements could easily go one of two ways. The best bet is to get in touch with me to discuss your target rates of exchange so I can alert you if these are achieved, and how to protect yourself from these kinds of currency movements.

For further advice or 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.