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%, 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?
Despite both the UK Construction and Services PMIs bettering expectations, the mood towards the pound sterling has remained pessimistic, as investors are still concerned that ‘Brexit’ uncertainty is dragging on the domestic economy.
China’s latest economic data showed a return to growth for the world’s second largest economy, encouraging demand for commodity-correlated currencies such as the Australian and New Zealand dollars.
Markets have remained uncertain over the likelihood of the Federal Reserve opting to raise interest rates in the near future, as dovish policymaker commentary contrasted with stronger domestic data, giving the US dollar something of a turbulent week.
Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.2487 to 1.2399
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 124,870 at the start of the week but EUR 123,990 at the end, a decline of EUR 880.
Pound to US dollar exchange rate: GBP/USD ends the week lower, down from 1.4229 to 1.4093
If you had GBP 100,000 to transfer to the US your money would have been worth USD 142,290 at the beginning of the week but just USD 140,930 by the end, leaving you with USD 1,360 less.
Pound to Australian dollar exchange rate: GBP/AUD ends the week higher, up from 1.8523 to 1.8750
At the start of the week your GBP 100,000 would have been worth AUD 185,230 but AUD 187,500 at the end — giving you AUD 2,270 more.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week higher, up from 2.0596 to 2.0764
At the beginning of the week your GBP 100,000 would have been worth NZD 205,960 but by the end you would have achieved only NZD 207,640, netting you NZD 1,680 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 March Consumer Price Index.
Should annual inflation be found to have picked up further in March investors are likely to be encouraged, with stronger inflationary pressure pointing towards a recovering economy and higher chances of the Bank of England raising interest rates before the end of the year.
However, if the CPI reveals a decline in inflation the pound can be expected to slump sharply against rivals, as general sentiment maintains a dovish bias towards the currency.
The UK Consumer Price Index is due on Tuesday 12 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.