Expat currency news — Pound in mixed spirits after latest UK inflation data
If you have a foreign currency transfer coming up, securing a competitive exchange rate can make a big difference on how much you receive. [Contributed by TorFX]
While the type of international money provider you use can impact the exchange rate you secure, with some currency brokers undercutting the rates offered by banks by up to 90 percent, picking the right time to move your money is also important. Having a little knowledge of how currencies are performing makes all the difference and our brief currency update gives you the information you need to make a move at the right time.
So, what happened last week?
The pound has had a rather volatile week, as the latest raft of UK inflation data proved a little more mixed than hoped. While baseline inflation showed a modest improvement, the core measure fell back further than forecast, disappointing hopes that the Bank of England (BoE) might be prompted to tighten monetary policy sooner rather than later.
Markets were in generally stronger shape, however, as hopes of a production deal between OPEC and Russia pushed up the price of crude oil, helping to increase the appeal of commodity-correlated currencies such as the Australian dollar.
Comments from members of the European Central Bank have caused some movement for the euro, meanwhile, as policymakers alternately encouraged and then discouraged markets from betting on more easing to come in March.
Pound to euro exchange rate: GBP/EUR ends the week higher, up from 1.2887 to 1.2966
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 128,870 at the start of the week but EUR 129,660 at the end, giving you an extra EUR 790.
Pound to US dollar exchange rate: GBP/USD ends the week lower, down from 1.4505 to 1.4376
If you had GBP 100,000 to transfer to the US your money would have been worth USD 145,050 at the beginning of the week but USD 143,760 at the end, leaving you with USD 1,290 less.
Pound to Australian dollar exchange rate: GBP/AUD ends the week lower, down from 2.0400 to 2.0091
At the start of the week your GBP 100,000 would have been worth AUD 204,000 but AUD 200,910 at the end — a drop of AUD 3,090.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week lower, down from 2.1882 to 2.1692
At the beginning of the week your GBP 100,000 would have been worth NZD 218,820 but at the end you would have achieved NZD 216,920, netting you NZD 1,900 less.
So, what can you expect in the week ahead?
The biggest event for the pound in the coming week will be the fourth quarter UK Gross Domestic Product report.
If growth is found to have strengthened over the year, this would improve the odds of the BoE deciding to raise interest rates sooner rather than later, and would equally bode well for the strength of the UK’s economy.
However, if GDP is shown to have weakened at the end of 2015 this will raise further doubts over the health of the UK economy and is likely to encourage the pound to lose fresh ground against the majors.
The fourth quarter GDP report is due on Thursday 25 February at 9:30am GMT.
Contributed by TorFX
TorFX is a specialist currency broker that offers far better exchange rates than you are likely to receive from a high street bank.