Expat currency news — pound extends slump after BoE puts brakes on imminent interest rate hike
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?
Unsurprisingly the Bank of England (BoE) opted to leave interest rates unchanged at the first policy meeting of 2016, while Governor Mark Carney later suggested that rates were likely to remain low for some time to come.
Although UK inflation picked up slightly in December and the domestic unemployment rate unexpectedly fell to a 10-year low the pound slumped across the board, largely driven by a discouraging decline in wage growth.
Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.3070 to 1.3045
If you had 100,000 to transfer to Europe your money would have been worth EUR 130,700 at the start of the week but EUR 130,450 at the end — leaving you with EUR 250 fewer.
Pound to USD exchange rate: GBP/USD ends the week lower, down from 1.4255 to 1.4110
If you have GBP 100,000 to transfer to the US, your money would have been worth USD 142,550 at the beginning of the week but USD 141,100 at the end — USD 1,450 less.
Pound to AUD exchange rate: GBP/AUD ends the week lower, down from 2.0765 to 2.0339
At the start of the week your GBP 100,000 would have been worth AUD 207,650 but AUD 203,390 at the end, leaving you with AUD 4,260 less.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week lower, down from 2.2232 to 2.1887
At the beginning of the week your GBP 100,000 would have been worth NZD 222,320 but at the end you would have achieved NZD 218,870, giving you NZD 3,450 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 GDP figures.
Should the domestic economy have grown at a faster pace at the end of 2015, confidence in the continuing economic health of the UK would be boosted, encouraging the pound to climb against rivals such as the euro, US dollar, Australian dollar and New Zealand dollar.
On the other hand, if the economy is shown to have expanded at a slower rate in the last quarter the BoE is likely to take a more optimistic view on monetary policy for longer.
The UK’s fourth quarter GDP report is due on Thursday 28 January 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.