Expat Currency News – Pound dives on Budget woes and Brexit worries, US Dollar rallies strongly
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%, 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 in the last week?
The unexpected resignation of Work and Pensions Minister Iain Duncan Smith, ostensibly over proposed disability cuts, triggered a rash of political turmoil and a budget U-turn, which dragged the pound down across the board.
Members of the Federal Open Market Committee (FOMC), meanwhile, have been undoing the work of last week’s policy meeting with several suggestions that interest rates could begin to rise again as soon as April.
The fallout of terror attacks in Brussels has also led to a sharp increase in safe-haven demand, which has boosted the US dollar further at the expense of rivals such as the Australian and New Zealand dollars.
Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.2841 to 1.2608
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 128,410 at the start of the week but just EUR 126,080 at the end, a decline of EUR 2,330.
Pound to US dollar exchange rate: GBP/USD ends the week lower, down from 1.4471 to 1.4129
If you had GBP 100,000 to transfer to the US your money would have been worth USD 144,710 at the beginning of the week but USD 141,290 by the end, leaving you with GBP 3,420 less.
Pound to Australian dollar exchange rate: GBP/AUD ends the week lower, down from 1.9025 to 1.8809
At the start of the week your GBP 100,000 would have been worth AUD 190,250 but AUD 188,090 at the end — giving you AUD 2,160 fewer.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week lower, down from 2.1276 to 2.1116
At the beginning of the week your GBP 100,000 would have been worth NZD 212,760 but by the end you would have achieved only NZD 211,160, netting you NZD 1,600 less.
So, what can you expect in the week ahead?
The biggest data event for the pound in the coming week will be the March UK Manufacturing PMI.
If the domestic manufacturing sector shows fresh expansion on the month then the pound could rally, with any signs of robustness within the UK economy likely to ease fears of the negative impact of Brexit uncertainty in the run-up to June’s referendum.
However, if sector growth is found to have stalled or declined it is likely that markets will take this as fresh incentive to sell out of the weakening pound, to the benefit of its rivals.
The latest UK Manufacturing PMI is due on Friday 1 April at 8:30am 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.