If you need a strong Sterling exchange rate against the Euro, you’ll be pleased to hear that the Pound hit a two and a half month high against the European currency before the Easter weekend. This puts Sterling at a rate of 1.213 against the Euro at the start of this week, which for recent times, is a very strong position.

Sterling’s climb on the Euro was mainly due to fears throughout last week about Spanish borrowing costs and the ongoing Euro zone debt crisis. It was also helped along however, by better than expected UK data in the three areas of manufacturing, construction and services. This strengthened hopes that the U.K may avoid recession.

In contrast, Sterling did not perform well against the US Dollar overall last week. Having started the week by reaching a four and a half month high on the US currency, the Pound has fallen back down to a rate of 1.586. This movement reflected the improvement in US unemployment revealed last week, as well as the surprising news revealed in the Federal Reserve minutes that only two out of ten US policy makers were in favour of introducing more monetary stimulus – indicating that the US economy was perceived to be getting stronger.

What is the picture for the Pound going forward? In the short term, this week sees the US monthly budget statement on Wednesday followed by the European Central Bank monthly report, the UK trade balance and the US trade balance. These three events may help bring shifts in exchange rates as they will allow currency investors to easily compare the outlook on these three economies.

The more general picture for the Pound going forward into May and beyond is built on an increasing anticipation about the Bank of England's monetary policy decision in May. The current asset-purchasing programme finishes in May so whether policy makers feel it necessary to introduce more quantitative easing to help support the economy, is likely to be a major influence on the currency markets. A decision to introduce more quantitative easing would be likely to weaken Sterling, whereas a decision to not do so, will help incite more confidence in the economy and make the way clear for Sterling to strengthen.

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.