Expat currency news: pound gains despite poor UK data, euro trends higher after ECB inaction
If you’ve got a foreign currency transfer coming up, securing a competitive exchange rate can make a big difference to how much you receive. [Contributed by TorFX]
While the type of international money provider you use can have an impact on the exchange rate you secure, with some currency brokers undercutting the rates offered by banks by 90 percent, picking the right time to move your money is also important. Having a little knowledge of how currencies are performing can prove invaluable and our brief currency update gives you the information you need to make a move at the right time.
So, what’s happened over the past week?
With the official campaigning period for the EU referendum underway the pound has been under renewed pressure due to worries over the outlook of the UK economy, particularly as domestic data (including unemployment and retail sales) fell short of forecast.
The chances of the Fed opting to hike interest rates in the near future diminished further as policymakers continued to take a more dovish tone with regards to monetary policy and signs emerged that the US housing market is starting to cool somewhat.
After the European Central Bank made no changes at its April policy meeting the euro surged across the board. The gains occurred as President Mario Draghi failed to talk the currency down and markets continued to discount the central bank’s ability to ease policy further.
Pound to euro exchange rate: GBP/EUR ends the higher, up from 1.2591 to 1.2668
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 125,910 at the start of the week but EUR 126,680 at the end, an improvement of EUR 770.
Pound to US dollar exchange rate: GBP/USD ends the week higher, up from 1.4208 to 1.4405
If you had GBP 100,000 to transfer to the US your money would have been worth USD 142,080 at the beginning of the week but USD 144,050 by the end, leaving you with USD 1,970 more.
Pound to Australian dollar exchange rate: GBP/AUD ends the week higher, up from 1.8396 to 1.8471
At the start of the week your GBP 100,000 would have been worth AUD 183,960 but AUD 184,710 at the end — giving you AUD 750 more.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week higher, up from 2.0531 to 2.0712
At the beginning of the week your GBP 100,000 would have been worth NZD 205,310 but by the end you would have achieved NZD 207,120, netting you NZD 1,810 more.
So, what can you expect in the week ahead?
The biggest data event for the pound in the coming week will be the publication of the UK’s first quarter Gross Domestic Product figure.
Should the UK economy continue to show signs of growth then investors are likely to favour the pound over its rivals, with robust expansion expected to diminish at least some of the concerns surrounding the possibility of a ‘Brexit’.
However, if the economy is found to have slowed at the start of the year then sterling is expected to return to a downtrend against rivals, as weaker growth will do little to offer encouragement to markets.
The UK Gross Domestic Product report is due on Wednesday 27 April 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.