In my last two weekly blogs, I had reported that at last the mighty Euro had begun to cave in to the widely discussed pressures of sovereign debt allowing Sterling to gain back some ground - whilst the Dollar had begun to strengthen considerably leaving Sterling behind.

The last week saw a change in tone with Sterling appreciating 0.2 percent on the Dollar and all in all remaining almost flat against the Euro, moving down by only 0.08 percent on the single currency albeit with a few twists and turns along the way. This was largely due to the fact that many fears surrounding the meeting of EU Finance ministers at the start of last week were expelled. Some worried that the arrest of Dominique Strauss-Kahn would lead to meeting delays or conclusions not being reached about the Portuguese bail-out. As soon as the green light was given for the Portuguese bailout however, some pressure was instantly taken off the Euro. There are still ongoing concerns that Greece will have to restructure its debt but the more severe downwards pressure that we have seen on the Euro the previous two weeks seems to have subsided for now.

This is not what those needing to transfer Sterling into Euros for a European property investment will want to hear. Sterling actually had some strong data last week. Apart from better retail sales spurred by the Royal Wedding and warmer weather, the news that inflation had risen in April to as high as 4.5 percent where only 4.1 percent was expected gave some help to the Pound – this is also the sort of data that could provide more ongoing momentum long term as it only adds to the pressure on the Bank of England to raise interest rates. However, the Bank of England minutes on Wednesday from the last policy meeting two weeks ago, revealed that there is still only stagnant support for a rate rise and it will take more votes to make this happen. Once more, the split in voting was three in favour of an interest rate rise against six who voted to maintain the interest rate at 0.5 percent. There was a time when economists were predicting the hike could come as early as May yet support is not growing.

The UK is still however streets ahead of the US where there is an increasing view that monetary policy will be kept loose for some time yet. This was particularly true this week where after two bounteous weeks of growth, the Dollar stalled in its tracks and reached a plateau as a raft of negative economic data swept in to counteract its rally. Poor data came in the form amongst others of a weak New York economic index, housing starts falling by 10.6 percent, industrial production remaining flat where growth was expected and sales of existing homes also unexpectedly fell. It is now thought unlikely that the US will start to raise interest rates this year at all meaning that there is potential for Sterling growth on the Dollar as the months roll on.

Events to look out for this week will be public sector net borrowing in the UK on Tuesday revealing the state of national debt as well as all important GDP figures on Wednesday giving an overview of how well or not the first quarter really went.

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.