Expat currency news — Pound slides as declining UK production drags on economic growth
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?
After the suspension of the Shanghai Composite Index’s circuit breaker mechanism, stock markets were nevertheless left volatile, despite the latest trade figures from China vastly bettering expectations.
A disappointingly sharp fall in UK industrial production has pushed the pound lower across the board as weaker global demand looks set to dent the growth of the domestic economy, and the likelihood of a near-term Bank of England (BoE) interest rate rise was diminished.
Pound to euro exchange rate: GBP/EUR ends the week higher, up from 1.3288 to 1.3343
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 132,880 at the start of the week but EUR 133,430 at the end — giving you an extra EUR 550.
Pound to USD: GBP/USD ends the week lower, down from 1.4518 to 1.4466
If you had GBP 100,000 to transfer to the US your money would have been worth USD 145,180 at the beginning of the week but USD 144,660 at the end.
Pound to AUD exchange rate: GBP/AUD ends the week lower, down from 2.0880 to 2.0560
At the start of the week your GBP 100,000 would have been worth AUD 208,800 but AUD 205,600 at the end, leaving you with AUD 3,200 less.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week lower, down from 2.2184 to 2.2010
At the beginning of the week your GBP 100,000 would have been worth NZD 221,840 but at the end you would have achieved NZD 220,100, giving you NZD 1,740 less.
So, what can you expect in the week ahead?
The biggest event for the pound in the coming week will be the December UK Inflation Rate report.
If domestic inflation is found to have risen, this would be seen to increase the odds of the BoE voting to raise interest rates sooner rather than later this year, a prospect which would be highly positive for the pound.
However, if inflationary pressure shows no signs of strengthening, and thus continues to drag on the UK’s economic recovery, the pound is likely to see fresh losses against the euro, US dollar, Australian dollar and New Zealand dollar.
The UK’s latest Inflation Rate report is due on Tuesday 19 January at 9:30am GMT.