Sterling reaches new high against the peseta

The pound sterling reached yet another new high against the peseta yesterday in a move which has been welcomed by the tourist industry and local estate agents. Sterling in the past 24 months has increased in value against the peseta by 24 percent. Never has the pound been higher, according to some experts consulted by the Bulletin yesterday. The tourist industry says that the spending power of the average holidaymaker will increase dramatically if this trend continues. “A large part of sterling's rise has to do with the weakness of the euro,” said Lee Ferridge, head of global currency strategy at Rabobank in London. “At the moment, given how badly the euro has performed, you would be a brave person to rule out sterling gaining further.” Sterling performed less well against the dollar, dropping to one-month lows below $1.5740 earlier in the day as the dollar surged against the euro, but recovered its losses later in the day. Local estate agents, who are already enjoying a relative boom at the moment, believe that the pound's growing strength will encourage more people to head to the island to buy holiday homes. “Even though house prices are very high in the Balearics at the moment, we are seeing that the British have the necessary cash to afford to pay them,” said one estate agent yesterday who has recently sold a 3.5 million pound home to a British couple.