Expat currency news — euro jumps, will the currency hold gains?
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?
The first half of last week was rather quiet in terms of currency movement, with investors gearing up for bigger shifts before the weekend.
That being said, the pound did weaken against peers like EUR, USD, AUD and NZD after UK construction and manufacturing data fell short before largely recovering losses on the back of strong services data.
The Australian dollar, meanwhile, was supported by a confident policy statement from the Reserve Bank of Australia and encouraging domestic growth data.
But on Thursday, the euro surged across the board as the European Central Bank failed to make the aggressive changes to fiscal policy in the eurozone expected by some investors.
Pound to euro exchange rate: GBP/EUR ends the week lower, down from 1.4269 to 1.3814.
If you had GBP 100,000 to transfer to Europe, your money would have been worth EUR 142,690 at the beginning of last week but EUR 138,140 at the end — giving you a staggering EUR 4550 less.
Pound to USD exchange rate: GBP/USD ends the week little changed, recovering from a low of 1.4904 to trade in the region of 1.5087
If you had GBP 100,000 to transfer to the US, your money would have been worth USD 149,040 when the market was at its lowest point but USD 151,197 when the market was at its highest point.
Pound to Australian dollar exchange rate: GBP/AUD ends the week lower, down from 2.0951 to 2.0642.
At the start of the week, your GBP 100,000 would have been worth AUD 209,510 but AUD 206,420 at the end, a little over AUD 3,000 less.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week lower, down from 2.3070 to 2.2760.
At the beginning of last week, your GBP 100,000 would have been worth NZD 230,700 but at the end you would have achieved NZD 227,600, losing around NZD 3,000.
So, what can you expect to happen in the week ahead?
Next week, the most influential event for the pound is likely to be the Bank of England’s (BoE) interest rate decision.
The pound could rally if the minutes from the decision show that the Monetary Policy Committee is more divided on the subject of when the interest rate should rise rather than the 1-8 split seen from the last few months.
Conversely, indications that the BoE is happy to leave borrowing costs on hold is likely to leave the GBP exchange rate under pressure.
The BoE’s interest rate decision is due out on 10 December 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.