Despite the wealth of economic news releases, central bank interest rate meetings and global G7 and International Monetary Fund meetings over the past week, the state of play in the currency markets between the Pound, US Dollar and Euro at least has not dramatically shifted. Generally speaking, we are still seeing a very strong Euro which in the space of the last few weeks has maintained eight month highs on the US Dollar and six month highs on the Pound.
This is having a significant effect on businesses as well as private individuals purchasing and selling properties overseas. A UK based individual requiring a transfer into Euros to buy a property for example, is finding that the cost in Pounds will have increased by a few thousand pounds depending on the cost of the property over just the space of a few weeks. This is a great time to book any transfers which require bringing Euros back into Sterling but if you will need to transfer Pounds into Euros then it is highly advisable to speak with a currency broker. With so much uncertainty in the currency markets at present, a Currency Solutions broker can either help you protect yourself from further losses by fixing an exchange rate in advance of your transfer, or alternatively alert you to when a target rate of exchange is hit allowing you to take advantage of any small spikes in your favour.
At present, the Euro is remaining buoyant mainly because both the UK and the US currencies are being avoided by investors as the chances of economic ‘stimulus’ measures being required by Governments to help give their respective economies an artificial boost has heightened. There have been more than just murmurings from those connected to the US Federal Reserve that stimulus is becoming an increasing possibility. The UK economy is also being haunted by the same issue – this is despite the fact that the Bank of England meeting last week did not result in the decision to take any more stimulus measures. The problem is that in the UK, minutes from the Bank of England which come out two weeks after the actual meeting can have just as much, if not more, effect than the meeting itself. Markets are widely expecting the minutes to show a three way split on the vote over monetary policy which will not bode well for Sterling. With details of budget cuts also coming out on the 20th October the Pound is looking set for general volatility this month.
On top of this both the UK and US are suffering from a constant drip feed of disappointing economic news. The US payroll report on Friday was disappointing and last week saw an absolute plummet of house prices in the UK. The Halifax housing report said that UK prices dropped by 3.6 percent in September and weak business confidence has kicked off the week for UK markets today.
The only saving grace for the Pound is that the US Dollar is performing even more weakly meaning that although it’s a weak time for GBP / Euro transfers, the rate for GBP / US Dollar is relatively good.
Whatever your transfer, find out how to minimise your losses or maximise your profit by speaking to a broker and obtaining a much more preferential rate to the bank.
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