03/12/2004
NOW IS THE TIME TO BUY!
The £ rose to its highest value against the US $ in 12 years this week, following the release of positive manufacturing figures on Wednesday & impressive retail sales going into the Christmas period. On Thursday sterling hit a peak of £1=$1.9438, the first time since September 1992 – when sterling broke through $2 – that it had broken the $1.94 mark; analysts are now preparing for further rises as the dollar continues its steady decline against major world currencies.
Although the increase in the value of the pound was prompted by strong data in a wide range of markets (including positive construction, housing and employment figures) and sterling rose to short-term highs against the euro (68.67p bought one euro on Thursday) it is the plummeting value of the dollar which has been most evident on the world markets and which played the greater role in bringing about the highs seen this week. Having gained steadily in value since a similar decline in the first half of this year, in recent weeks the dollar has been losing value at an increasing and increasingly alarming rate, and currency experts are now saying it is a matter of when, not if, the £1=$2 mark is broken once again.
This week’s highs should make for a great early Christmas present for UK buyers investing in US property. The lower the value of the dollar against sterling, the cheaper American properties become in real terms. A drop in the dollar’s value of only 10 cents, from $1.84 to $1.94 to the pound, as has been seen in recent weeks, means a real-terms saving of almost £3,000 on an American property valued at $100,000 – and most properties purchased by UK buyers would cost substantially more than that figure, leading to correspondingly greater savings.