Wednesday, May 02, 2012
Pound reaches 2 year high against the euro
It's currently showing that a shiny one pound coin will buy 1.23 euros which is the highest it's been for a couple of years.
The euro is under huge pressure - concern for the Spanish economy is getting worse and the continued woes of other continental european countries (with doubts over the depth or viability of their austerity measures) means that the euro is in real trouble.
According to research from Morgan Stanley, of the €1.5 trillion lent to commercial real estate developers in Europe, Spain alone accounts for more than 20% . It's also been reported that between 1992 -2010 Spanish housebuilders were building at a rate of one new house per head of population....incredible eh!
If Hollande wins the election next Sunday, as is looking likely, his "anti austerity" policies will go down like a lead balloon in Germany. Who knows what will happen if these two powerhouses fall out.
When we moved out to France in 2003 we got 1.43 euros for our pounds.
Goodness knows, I'm not an Economist (struggled badly at A level, should have opted for something less taxing on my little grey cells) and am no FX specialist but I do have a hunch that my little icon may well continue clicking upwards for a while.
This does, of course, make a big difference to the demand for houses here from international buyers.
This time last year the rate was 1.10 which meant that my typical client (£300,000 budget) was looking at houses around €330,000.
Today my same client would be looking at houses around €370,000.
Oh for a crystal ball :-)