Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting Pound Sterling rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
Despite a fair amount of economic data to consider, Sterling exchange rates have remained range bound against its major currency counterparts so far during this festive period, still hovering in the high 1.12s against the Euro and the mid 1.33s against the Dollar.
UK business confidence also spiked to 5 month highs whilst yet another prominent research group, The Resolution Foundation, followed on from the Office of National statistics last week, stating they believe average earnings will eventually outpace inflation in the latter stages of 2018.
Last Friday the markets will have taken note of the UK’s Budget deficit impressively falling to 8.7% for November, crashing through the 8.9% mark as expected.
Investors were slightly put off of the Bank of England’s cautious stance at their last monetary policy meeting, having downplayed the probabilities of rate hikes throughout 2018 on the grounds that a rise in rates may put too much pressure on UK households, as Brexit inflationary pressures continue to weigh on consumer spending.
Signs that average earnings may rise then, might well prompt the BoE to re-evaluate their position and could well trigger Sterling strength long term.
The argument applies the other way of course. Today’s British banking Association’s loans data is expected to show a slight retraction which highlights an overall lack of confidence in the UK market. If next week’s mortgage approvals for November and consumer credit levels also show a slowdown, investors may begin to lose faith and foreign currency could begin to become more expensive to buy. The early signs aren’t looking promising. Consumer morale recently slipped to 4 year lows which could suggest a sustained slowdown in spending.
We saw how powerful unity and clarity proved for Sterling exchange rates as the Pound climbed by 1.6% against the Euro as PM May broke through the first round of talks. Last Friday however, 7 Scottish MP’s got the green light they were looking for as a petition has been accepted by the Scottish court of session to assess whether or not the UK can still reverse the Brexit process on its own accord. Theresa May’s government has 3 weeks to act on the push before Scotland’s Supreme Court sets a date for the hearing. Their fear is that any suggestion the government might still hold the cards to withdraw may well reignite the strong division of opinion within the UK which could potentially undermine all the progress made during talks with the EU.
Furthermore, the UK’s lack of preparation for life after Brexit might do little to ease the fears. Last week’s release by a committee of Lawmakers sharing the government’s sectorial analysis covering the potential impact of Brexit was heavily criticised for its lack of structure and useful content. It certainly doesn’t bode well for the start of the crucial second round of Brexit talks. With so many question marks surrounding the Pound at the close of the year, if you have a currency requirement, it may pay to make a move sooner rather than later, so you can go into 2018 with full peace of mind.
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