Expat currency news — Pound softens on poor UK data as stock market rout boosts safe-haven currencies

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?

Although the UK’s December visible trade deficit was found to have narrowed further than expected, this was soon countered by a surprise fall in industrial production and a downwards revision of the latest GDP estimate, providing a rather more mixed picture of the strength of the domestic economy.

Despite the closure of a number of Asian stock markets in honour of the Lunar New Year, trading has remained largely volatile this week, with the banking and mining sectors in particular positing large declines on the back of global slowdown fears.

Comments from Fed Chair Janet Yellen on Wednesday failed to particularly calm sentiment, as the policymaker refused to rule out the possibility of another imminent interest rate hike in the US, boosting the US dollar and encouraging further market turbulence.

Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.2997 to 1.2720

If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 129,970 at the start of the week but EUR 127,200 at the end — a decrease of EUR 2,770.

Pound to US dollar exchange rate: GBP/USD ends the week lower, down from 1.4504 to 1.4452

If you had GBP 100,000 to transfer to the US your money would have been worth USD 145,040 at the beginning of the week but USD 144,520 at the end, leaving you with USD 520 less.

Pound to Australian dollar exchange rate: GBP/AUD ends the week higher, up from 2.0519 to 2.0541

At the start of the week your GBP 100,000 would have been worth AUD 205,190 but at the end you would have achieved AUD 205,410, giving you AUD 220 more.

Pound to New Zealand dollar exchange rate: GBP/NZD ends the week lower, down from 2.1891 to 2.1745

At the beginning of the week your GBP 100,000 would have been worth NZD 218,910 but NZD 217,450 at the end, giving you NZD 1,460 less.

So, what can you expect in the week ahead?

The biggest event for the pound in the coming week will be the latest UK Consumer Price Index.

Stronger inflation would offer some reassurance as to the health of the UK economy, with higher inflationary pressure likely to encourage the Bank of England to consider raising interest rates in the near future and thus pushing the Pound higher.

However, if inflation remains weaker and continues to trend around 0.2 percent the pound is likely to fall further against rivals such as the euro, US dollar, Australian dollar and New Zealand dollar as concerns mount over the strength of the UK’s economic recovery.

The January Consumer Price Index report is due on Tuesday 16 February at 9:30am GMT.

Contributed by TorFX

3 exchange rate moving developments to watch out for this week

TorFX is a specialist currency broker that offers far better exchange rates than you are likely to receive from a high street bank.