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?
Global stock markets have managed to sustain a rally after hopes of production cuts boosted the price of oil back above the $30 mark, with action from the People’s Bank of China helping to improve the appeal of the Australian dollar.
The Federal Open Market Committee has suggested that it is unlikely to achieve four interest rate hikes over the course of 2016 as previously expected, somewhat denting the strength of the US dollar.
Meanwhile, the UK’s fourth quarter GDP report revealed that the domestic economy had continued to grow at the end of 2015, albeit at a slightly slowed pace, suggesting that the UK remains generally strong in spite of rising ‘Brexit’ concerns.
Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.3228 to 1.3120
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 132,280 at the start of the week but EUR 131,200 at the end — a drop of EUR 1,080.
Pound to US dollar exchange rate: GBP/USD ends the week higher, up from 1.4269 to 1.4307
If you had GBP 100,000 to transfer to the US your money would have been worth USD 142,690 at the beginning of the week but USD 143,070 at the end, leaving you with USD 380 more.
Pound to Australian dollar exchange rate: GBP/AUD ends the week lower, down from 2.0378 to 2.0227
At the start of the week your GBP 100,000 would have been worth AUD 203,780 but AUD 202,270 at the end, giving you AUD 1,510 less.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week higher, up from 2.1982 to 2.2139
At the beginning of the week your GBP 100,000 would have been worth NZD 219,820 but at the end you would have achieved NZD 221,390, netting you an extra NZD 1,570.
So, what can you expect in the week ahead?
The biggest event for the pound in the coming week will be the February Bank of England (BoE) interest rate decision.
While policymakers are highly unlikely to change interest rates at this point the tone of discussion among policymakers will strongly influence the strength of the Pound, with any further suggestions that a rate hike is likely to come later rather than sooner set to push the Pound lower against rivals.
However, if the BoE proves more optimistic with regards to monetary policy in the wake of the recent GDP figures the Pound could be encouraged to make renewed gains.
The BoE interest rate decision is due on Thursday 4 February at 12pm 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.