Expat currency news: Commodity currencies climb on Fed dovishness, pound hurt by steel industry uncertainty
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 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 past week?
In spite of an upward revision of the UK’s fourth quarter GDP the pound has been on bearish form, with markets concerned by the increasingly uncertain future of the nation’s steel industry.
Fed Chair Janet Yellen prompted a sharp decline for the US dollar by adopting a more cautious tone with regards to monetary policy, strongly indicating that an April rate hike is now off the table for the Fed.
The appeal of the euro, meanwhile, was boosted by the revelation that inflation in Germany and the eurozone as a whole had improved in March, leading to hopes that the European Central Bank will not take further loosening measures.
Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.2652 to 1.2623
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 126,520 at the start of the week but EUR 126,230 at the end, a drop of EUR 290.
Pound to US dollar exchange rate: GBP/USD ends the week higher, up from 1.4130 to 1.4359
If you had GBP 100,000 to transfer to the US your money would have been worth USD 141,300 at the beginning of the week but USD 143,590 by the end, giving you USD 2,290 more.
Pound to Australian dollar exchange rate: GBP/AUD ends the week lower, down from 1.8819 to 1.8674
At the start of the week your GBP 100,000 would have been worth AUD 188,190 but AUD 186,740 at the end — leaving you with AUD 1,450 fewer.
Pound to New Zealand sollar exchange rate: GBP/NZD ends the week lower, down from 2.1130 to 2.0681
At the beginning of the week your GBP 100,000 would have been worth NZD 211,300 but by the end you would have achieved only NZD 206,810, netting you NZD 4,490 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 Services PMI.
As the service sector is the main driver of the UK economy any signs of continued growth are likely to offer the pound grounds for a rally, with markets keen to see if the sector is managing to shrug off the downside pressure of Brexit concerns.
If, on the other hand, services are found to have faltered at the end of the first quarter this can be expected to drive the pound down across the board.
The latest UK Services PMI is due on Tuesday 5 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.