Expat currency news — pound sterling gained, but will it stay strong?
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?
Several currencies lost value last week ahead of major decisions by central banks including the European Central Bank (ECB), the Reserve Bank of New Zealand (RBNZ) and the Bank of England (BoE).
Pound sterling managed to perform well last week despite an increase in imports and a drop in exports. The BoE met on Thursday to discuss interest rates, so up until then investors were waiting for the decision.
The euro continued to make waves, with the markets trying to adjust to the higher price of the common currency after the previous week’s decisions by the ECB. Since the beginning of the week, the euro was mostly on the rise against currencies including the GBP, USD and NZD.
A second round of strong monthly jobs data helped the Australian dollar to make significant gains, with a drop in unemployment and a much better-than-expected number of new jobs created in November.
Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.3884 to 1.3767
If you had GBP 100,000 to transfer to Europe, your money would have been worth EUR 138,840 at the beginning of last week but EUR 137,670 at the end — giving you EUR 1,170 less.
Pound to US dollar exchange rate: GBP/USD ends the week up from a low of 1.4960 to trade in the region of 1.5202.
If you had GBP 100,000 to transfer to the US, your money would have been worth USD 149,600 when the market was at its lowest point but USD 152,020 when the market was at its highest point, a difference of USD 2,420.
Pound to Australian dollar exchange rate: GBP/AUD ends the week higher, up from 2.0571 to 2.0991.
At the start of the week your GBP 100,000 would have been worth AUD 205,710 but AUD 209,910 at the end, a difference of AUD 4,200.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week at a low of 2.2381, after hitting a high of 2.2892.
At the beginning of last week your GBP 100,000 would have been worth NZD 223,810 but at the end you would have achieved NZD 228,920, netting you more than NZD 5,000 extra.
So, what can you expect to happen in the week ahead?
Important UK inflation data is released on Tuesday, which will show whether or not consumer price pressures are rising towards the BoE’s target. Jobs data follows on Wednesday while retail sales figures are due on Thursday.
Several members of the BoEs Monetary Policy Committee will likely make comments about last week’s interest rate decision, which could change pound sterling exchange rates if they are particularly negative or optimistic.
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.