Currency Update from our Partners at Smart
Sterling has played a waiting game in 2017, after the rollercoaster ride of 2016. Will 2018 be a steady climb or steady decline?
This year the pound reached highs of almost €1.20 in mid-April. Then as soon as the British started leaping onto ferries at the start of the summer holidays it began its slide. It dipped under €1.08 in August.
Was 2017 really that bad?
Well, yes and no. Firstly, compared to the ups and downs of 2016, however, in which the pound moved as much as 25 percent during the year, 2017’s 10 percent swing felt relatively peaceful.
As ever, the drivers of currency were politics (the loss of the Conservatives’ majority in the general election) and the economy. The UK’s growth rate slipped, while the USA’s and Europe’s powered ahead, but there has been no knock-out blow to the pound this year like some predicted. The British are still more or less fully employed, spending well and optimistic about the future, according to the latest purchasing managers’ indices.
We don’t yet know whether Brexit negotiators have a deal on money, Ireland and citizens’ rights and can start trade talk, so it is difficult to make predictions for the pound in 2018. Things are looking relatively rosy though, which must be good news for the pound.
Looking at political threats to sterling in 2018, the survival of Theresa May as Prime Minister will keep markets happier than the risk of a left-wing government.
Nothing can be guaranteed, and given the unpredictability of the pound it makes more sense to base any buying or selling decisions on other factors – house prices, sales volumes and most importantly of all – where you want to live!
The safest response to currency volatility is simply to protect your budget via a forward contract or one of the other tools at Smart Currency Exchange’s disposal. Give Smart a call today to discuss risk management of your property budget.