Editor’s Note: The Pound has maintained its momentum against the Euro, reducing the cost of buying a Spanish home by thousands, if not tens of thousands of Pounds, for cash buyers from the UK. Foreign currency exchange specialist Luke Trevail looks at the factors driving exchange rates, and what the near future might hold.
Those of you buying euros have been waiting and waiting for the key level of €1.25 to be achievable are looking likely to have your patience rewarded as sterling continues to move upwards and the euro focuses on its own problems.
These problems may well continue and since the European Central Bank took the bold move to cut interest rates to 0% the are now potentially looking to start their equivalent of Quantitative Easing which will surely weaken the single currency more.
The Bank of England have stirred the rumour pot further by suggesting that interest rates will be raised in the UK at some stage soon, although the date of when they will take this action is uncertain the mere fact that it’s been mentioned has helped the pound remain buoyant.
With the volatile nature of these markets it’s always well advised to keep monitoring the market closely and to be reactive to any spikes in the daily or weekly prices.
The message remains the same for any euro sellers, keeping them in your pocket and waiting for a better rate seems to be the wrong thing to do with rates – both exchange and interest going against you.