Pound soars to seven-year high against euro

Photo:Eisenrah

The landmark shift in exchange rates occurred this morning, in the wake of the European Central Bank's confirmation of quantitative easing. The ECB reiterated its plans to buy bonds from next week, a move that is intended to tackle deflation but has also dealt sever blows to the single currency in recent months.

Indeed, euro's weakness has been sterling's strength, boosting the buying power of British house hunters in European destinations. French estate agents have reported record demand, while Spain shot up to become the most popular country on TheMoveChannel.com in February for the second time in three months.

The pound is less resilient against the US dollar, following to a four-week low on the greenback. This is fuelled by uncertainty surrounding the upcoming May election, as well as ongoing positive data releases regarding the US economy.

For investors seeking a Spanish bargain or an affordable property with stronger returns, though, sterling is now at 72.13 pence against the euro, its highest rate since December 2008, notes Reuters.

"This election is very uncertain and while sterling's correlation historically to previous elections has not been strong, this time it could be different," Richard Falkenhall, currency strategist at SEB, told the news agency.