Sterling starts the week on a steadier footing after a volatile fortnight, with UK government borrowing costs easing from near 30-year highs as Labour leadership concerns faded. However, geopolitical risks, particularly speculation of potential Iran–US diplomatic progress, could add to volatility.
Latest market insights:
Pound to euro:
+0.9% recovery on the week
- Sterling fell to a five-week low early last week as UK political uncertainty unsettled markets. The pound later recovered after Labour figures reassured investors over fiscal policy, while the International Monetary Fund (IMF) upgraded its UK growth forecast for 2026.
- For property buyers, a 1% market move on a €400,000 purchase equals €4,000, which could have a direct impact on your overall property budget. Many buyers use forward contracts to lock in an exchange rate in advance and protect against sudden market swings.
Pound to US dollar:
+1.3% recovery on the week
- Sterling regained ground against the US dollar last week, supported by a combination of improved UK data and a softer US dollar backdrop. UK figures helped stabilise sentiment, while dollar weakness also provided additional support.
- The dollar came under pressure after renewed US tariff threats against Europe unsettled investors, while the Federal Reserve signalled that US interest rates may remain higher for longer, adding to broader uncertainty around the US growth and policy outlook.
Euro to pound:
Relatively steady
- The euro remained relatively resilient overall, but has weakened against sterling over the past week, with GBP strength partly driven by better UK data and softer eurozone sentiment.
- Eurozone inflation rose to 3.0% in April, supported by higher energy prices linked to ongoing tensions in the Middle East, while elevated oil prices continue to underpin inflation expectations ahead of the next ECB meeting.
- Attention now turns to key German data on Friday, including inflation and unemployment figures. As the region’s largest economy, Germany’s data will be closely watched for further signs of momentum, particularly after recent softness in economic indicators, which has weighed on the euro.
If you have upcoming currency requirements or would like to discuss how these events could affect your plans, we’re here to help, contact Lumon on +44 (0)204 506 5672 for a free, no-obligation conversation and discover what options you have available to help.
