Expat currency news: Will the pound strengthen?
While the type of international money provider you use can make a big difference to 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 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 main pound-moving event of last week was the UK’s latest employment figures, with the news that joblessness unexpectedly fell to a seven-year low lending sterling support.
The pound to euro exchange rate (GBP/EUR) ended the week higher, up from 1.3984 to 1.4152
If you had GBP100,000 to transfer to Europe your money would have been worth EUR 139,840 at the beginning of last week but EUR 141,520 at the end – netting you an extra EUR 1680.
The pound to US dollar exchange rate (GBP/USD) ended the week higher, up from 1.5028 to 1.5190
If you had GBP 100,000 to transfer to the US your money would have been worth USD 150,280 at the beginning of last week but USD 151,190 at the end, almost USD 1000 more.
The pound to Australian dollar exchange rate (GBP/AUD) pairing ended the week little changed, holding at 2.1355
Despite the GBP/AUD exchange rate hitting highs of 2.1567 and lows of 2.1260 over the course of last week, your currency transfer would have been worth around the same at the end of the week as at the beginning.
The pound to New Zealand dollar exchange rate (GBP/NZD) ended the week higher, up from 2.2960 to 2.3295
At the beginning of last week your GBP 100,000 would have been worth NZD 229,600 but at the end you would have achieved NZD 232,950 – an extra NZD 3350.
So, what can you expect to happen in the week ahead?
Well, the pound could potentially fall against the euro, US dollar, Australian dollar and New Zealand dollar if the UK’s Consumer Price Index shows that the rate of inflation in the UK declined in October. Slower inflation would reduce the odds of the Bank of England (BoE) increasing interest rates in early to mid-2016 and reduce demand for the Pound in the process – simple.
On the flip side, an increase in UK inflation would boost the pound and make your money worth more. If you have a GBP/EUR, GBP/USD, GBP/AUD or GBP/NZD exchange rate transfer coming up you may want to keep an eye on how the inflation data prints.
The UK’s Consumer Price Index is due out on 17 November 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.