You can see our currency news market reports, published daily, on this page. Jargon-free and with our archive back to 2011, bookmark this page to stay on top of the latest currency news relating to your transfers.
Sterling at all-time low against Euro
28 July, 2011
What next for overseas property buyers?
Sterling slumped to a fresh all-time low against the Euro in early November, further to the Bank of England’s shock 1.5% interest rate cut and a raft of negative economic news in the UK.
For buyers of property in France, Spain or elsewhere in the Eurozone, that means spending more for the same amount of Euros than before.
Exchanging currency for a €200,000 property would have cost around £141,000 a year ago, wheras now a UK buyer would need to fork out over £165,000.
Why the change in currency value? Quite simply, the UK economy heading into recession means that investors are less likely to hold assets in sterling, which means less demand for the Pound and therefore falling value. Add to this falling interest rates, lower inflation for producers and consumers, falling house prices and a stuttering economy, and it’s easy to see why sterling has taken such a beating in recent months.
There is some good news though. Eurozone property prices have also been tumbling, so negotiating a good price should be much easier than a year ago. There are less buyers around and properties are harder to sell, so make sure you get yourself a good deal.
Also, with global interest rates falling, if you are using an overseas mortgage to buy your place in the sun, financing may well be cheaper.
Finally, don’t forget that you can fix and guarantee your exchange rate up to 2 years ahead by using a specialist broker like Currency Index. As the Bank of England itself expects tough economic conditions through 2009, it’s hard to see the Pound recovering, and there may be worse times ahead. By fixing your exchange rate for a purchase or completion next year, you can safeguard against falling exchange rates and make sure your dream overseas purchase doesn’t become a nightmare.
Australian Dollar sent on rollercoaster ride
28 July, 2011
The “Aussie” plummeted in value against the Pound, making overseas property cheaper, in October before regaining some value in December. The differences are staggering – a property costing $300,000 would set you back nearly £143,000 in September, but only £118,000 just 6 weeks later.
GBP – AUD last 3 months
Against the US dollar, the Aussie depreciated by a massive 37% in the same timescale.
The reason for this volatility? In the global credit meltdown, investors have moved money around the globe in search of higher returns. Traditionally, Australian interest rates have been higher than most western economies, and “carry trades” have been popular where investors borrow in one currency to invest in another with higher interest rates. Demand for that currency increases, and the price goes up.
Recently however, these positions have been reversed as Australian interest rates have fallen and investors have needed to sell dollars to place money elsewhere. As dollars were sold off, demand for the Aussie fell, and the price therefore dropped significantly.
That’s what presented buyers of Australian property with the opportunity for a bargain.
Of course, the most important thing to check if you need to transfer money to Australia is that you obtain a competitive exchange rate. Typically, the high street banks do not offer very good deals on large amounts and significant savings can be made by using a specialist foreign exchange broker like Currency Index.
Foreign currency brokers can help you through the whole money transfer process and tell you what’s happening in the market, to help you decide when to make your purchase. In addition, rates can be secured and guaranteed up to 2 years ahead, so you can buy your Australian dollars well before you need them without having all the funds available, to take advantage of a preferential rate.
In volatile times, emigrating doesn’t need to be any more stressful – make sure you get a good deal on your foreign exchange and try to secure your rate when the time is right.
Market Commentary – 04/11/08
28 July, 2011
Market Commentary – 04/11/08 – Simon Eastman – Senior Broker
The past few days trading have been dictated by speculation over UK interest rates. Due to the current economic climate and fears of a deep recession, markets have been calling for an interest rate cut when the Bank of England meets this Thursday.
Gordon Brown requested drastic action by the governor Mervyn King to help bolster the flagging economy and the markets has widely expected another 50 point cut in rates, from 4.5 percent to 4 percent.
Yesterday exchange rates were affected very little by the purchasing managers index figures which showed the UK manufacturing sector contracted for the sixth consecutive month as demand for products both here and from abroad tipped the sector into recession (Recession is signified by two consecutive quarters of negative growth).
During afternoon trading the tables turned as the pound took a battering across the board. The cause, market speculation of a 1 percent cut in interest rates rather than just a 50 point cut. The pound dropped 1.5 percent against the euro and at one point was down 3 percent against the US dollar, 3.5 percent against the Canadian dollar and over 3 percent against the Australian and New Zealand dollars.
Although some analysts in the market are not putting the pounds weakness down to the chance of a cut but more to the lack of lack of decisive action by the central bank in helping the economy.
“There’s been a lot of apprehension ahead of the BoE meeting, and in our view with good reason,” said Robert Minikin, senior FX strategist at Standard Chartered. “It’s the sluggishness of the policy that’s been affecting sterling. The problem is not whether they move 50 or 100 basis points; the problem is that they should have been easing aggressively, probably since early 2008,” he added.
So with the US cutting their interest rates last week by 50 points, the Reserve Bank of Australia cutting rates by 75 points today, the markets now await Thursday for interest rate decisions by the Bank of England and European Central Bank. Cuts should help to boost the economy but whether more will be needed will become apparent in the coming weeks.
If you are in the process of buying a property abroad these uncertain volatile currency markets could unravel your plans so speak with a Currency Index broker today to discuss the options available to you, like a forward contract, used for eliminating the market risk.
If you have any question relating to the content of the above article or for some friendly guidance on your upcoming currency purchase please contact Simon Eastman, Senior FX Broker at Currency Index on 020 7903 5444 or email email@example.com.
Weekly Market Outlook
28 July, 2011
Monday 29th November 2010 to Friday 3rd December 2010
This week the main story is likely to be the continuing developments of the Irish bank bailout – and whether there will be any knock-on effects elsewhere in the Eurozone. For now the Euro has started to strengthen.
Elsewhere we have economic releases in Australia, Canada, the USA and Switzerland, all likely to affect rates for sending money abroad. Contact your foreign exchange broker for the latest rates and news.
0930 – UK mortgage approvals & money supply
1000 – Eurozone economic & consumer confidence
1330 – Canadian current account
Overnight – UK consumer confidence
0030 – Australian current account
1000 – Eurozone unemployment & CPI inflation
1330 – Canadian GDP
1500 – US consumer confidence
0030 – Australian GDP
0700 – UK Nationwide house prices
0900 – Eurozone manufacturing inflation
0930 – UK manufacturing inflation
1500 – US manufacturing & construction
0030 – Australian retail sales & trade balance
0645 – Swiss GDP
1000 – Eurozone GDP & PPI inflation
1245 – Eurozone interest rate decision
1330 – US jobless claims
0815 – Swiss CPI inflation
1000 – Eurozone retail sales
1200 – Canadian unemployment
1330 – US non-farm payrolls & unemployment rate
Sending Money Abroad
28 July, 2011
Buying a property abroad, bringing money back to the UK, or sending funds to a supplier, can be complicated. Thankfully, at Currency Index, we are on hand to help you, whether you are buying a villa in Valencia, or importing ink from India.
Click below for our country-by-country guides which will tell you all you need to know about the currency and local banking procedures.
Call us on 0800 043 2623 (or +44 1923 69 53 53 from abroad), or click here to make an enquiry online.
Click here to find out how Currency Index Ltd can supply the very best Euro Exchange Rates.
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28 July, 2011
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This week’s currency news – GDP out tomorrow
28 July, 2011
By far the most important data release this week in the UK will be Tuesday’s GDP figure – the first estimate of growth in the UK economy from March to June. There is a real worry that we could see a negative result.Read more
GDP slows to 0.2pc, but stays above zero
28 July, 2011
This morning’s first estimate of GDP for March to June showed a 0.2% growth in the economy – hardly signs of an imminent economic recovery, but at least a positive figure which has eased fears of a ‘double dip’ recession.Read more
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