Five Reasons the Pound could fall further
28 July, 2011
We speak to many clients who want to hold out for the best exchange rates, before making their transfer to pay for overseas property. But a close look at the economic conditions might make them think – would it be better to buy currency now?
1. Severe Recession. The OECD are predicting the downturn to be “the most severe since the early 1980s”, and has forecast the UK as the worst affected country in the developed world.
2. Interest Rates. The Bank of England is widely expected to cut interest rates again on Thursday – and lower interest rates typically mean a weaker Pound.
3. Manufacturing in decline. British manufacturing in November shrank at the fastest rate since figures began 16 years ago.
4. UK Job Market. A survey out today shows the UK job market weakened significantly in November. The drop in jobs available was the fastest in the survey’s 11-year history.
5. World outlook. The United Nations says the world faces its worst downturn since the Great Depression of the 1930s.
All of these indicate that a weaker Pound is likely – but if you are buying a property overseas, you can secure a “forward contract” to guarantee your exchange rate for up to 2 years ahead.
Don’t forget, whatever your currency requirements, you should be in touch with a currency broker who can help you through these volatile times. Currency Index specialise in currency transactions for overseas property buyers.
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