Where Will Sterling Exchange Rates Go Next?
Recently we have seen Pound Sterling exchange rates fall against a number of major currencies and for many of our clients is begs the question how much further could Sterling fall. We are close to a 15 month low against the Euro and at a 7 month low (close to a 9 month low) against the Pound. With the threat of a triple dip recession hanging over the country and rumours that the UK could lose its triple A rating not only does the economy seem to be under serious threat so does the Pound. On top of this negative news we are now witnessing members of the Bank of England seemingly “talk the Pound down”. Yesterday Martin Weale stated that he believed for the UK economy to flourish the Pound would need to weaken further. Simple economic theory states that a weak currency encourages more investment in that country and helps the export market which eventually can lead to growth of the economy. This does usually mean though that in the short to medium term the exchange rate of that country is likely to suffer and at the moment that is the case. However, it is hoped that if we see more investment flow into the UK then we could witness the economy avoid the dreaded triple dip recession which may result in an uplift for GBP. However, if we are confirmed to be in recession we could see Sterling fall further. As a result of this uncertainty I believe that every data release for the UK from now until the end of the first quarter of this year (the end of March) will be crucial in deciding the short term future of the UK economy and therefore Sterling exchange rates. So, if you need to transfer money abroad make sure you stay in contact with us here at Foreign Currency Direct plc.
German Economy To Grow
Following news that the Eurozone was in deep recession and that both France and Germany had seen their economies shrink during the last quarter of 2012, German’s Bundesbank has stated that they predict that the country will not fall into recession while they predict growth for the first quarter of this year. The bank believe that the regardless of the performance of the rest of the EU Germany will bounce back this year. When it was announced that Germany had shrunk at the end of last year there was a concern that the Euro would weaken significantly but with the Pound under more pressure there wasnt the large movement that was expected. However, should Germany and France start to show growth it is likely to bring yet more confidence back to the EUR which could see GBP/EUR exchange rates fall further.
If you need to transfer money abroad and you are looking for a great exchange rate make sure you speak with us today so we can discuss your currency requirements with one of our experienced currency broker by calling us on 01494 849752 or email me directly on email@example.com