Expat currency news: No change from BoE softens GBP, weaker inflation prompts US dollar downtrend
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 up to 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?
The Bank of England offered no surprise to markets by leaving interest rates at their record low of 0.5 percent for the 85th month in a row, pushing the pound lower against rivals in spite of the latest UK inflation rate having shown a stronger uptick than anticipated.
Greece’s bailout returned to haunt the euro as talks with creditors were paused in favour of the IMF spring meetings, with concerns over the country’s economic outlook rising in spite of reassurance of progress from involved parties.
While the US dollar was boosted by talk of a possible April interest rate hike, the currency was later weakened as domestic inflation unexpectedly fell back, scuppering suggestions that the Fed’s monetary tightening push might resume sooner rather than later.
Pound to euro exchange rate: GBP/EUR ends the week higher, up from 1.2395 to 1.2553
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 123,950 at the start of the week but EUR 125,530 at the end, an increase of EUR 1,580.
Pound to US dollar exchange rate: GBP/USD ends the week higher, up from 1.4128 to 1.4156
If you had GBP 100,000 to transfer to the US your money would have been worth USD 141,280 at the beginning of the week but USD 141,560 by the end, leaving you with USD 280 more.
Pound to Australian dollar exchange rate: GBP/AUD ends the week lower, down from 1.8707 to 1.8336
At the start of the week your GBP 100,000 would have been worth AUD 187,070 but AUD 183,360 at the end — giving you AUD 3,710 less.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week lower, down from 2.0755 to 2.0600
At the beginning of the week your GBP 100,000 would have been worth NZD 207,550 but by the end you would have achieved only NZD 206,000, netting you NZD 1,550 fewer.
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 Average Weekly Earnings for the three months to February.
Should wage growth continue to improve then markets are likely to react positively, with higher wages suggesting that the Bank of England could be encouraged to raise interest rates sooner than currently expected.
However, if earnings remain static or show a dip then the pound is expected to weaken across the board, given the importance that policymakers place on wages in relation to decisions on monetary policy.
The UK Average Weekly Earnings report is due on Wednesday 20 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.