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Best rates for buying US Dollars for over 4 months and the best rates on selling Euros for over 2 months
Wow, what a day it has been for sterling exchange rates. We have witnessed the pound continue to gain against the USD spiking up at over a 4 month high of 1.6250. The complete opposite has happened against the Euro with the pound continuing its losses and reaching a low of 1.23221. This is now a loss of over 3 cents in a week.
The main reason that the pound has weakened against the Euro is due to events in the US & Europe. We witnessed last night the US FED issue another round of QE. This significantly weakened the USD against a range of currencies and the pound has certainly capitalised from this. However it boosted investor confidence which meant that investors have moved from the safe haven of the USD and into teh riskier currencies like the Euro which has caused the big swing for GBP/EUR.
In Europe yesterday the ECB monthly report was released stating that they left their interest rates at 0.75% this month due to the fact that Economic growth in the Eurozone should remain anaemic and heightened uncertainty will continue to weigh on market sentiment. The main story for the Euro this week though has been how Germany’s top court on Wednesday backed the euro zone’s new rescue fund, which helped boost investors’ confidence in the European currency. On the back of that the Euro strengthened to a 2 month high against the pound.
What does the FED decision mean for sterling exchange rates?
After the decision we witnessed the pound continue to gain against the USD but we did see sterling weaken further against the Euro. Over the course of the last week the pound has fallen against the Euro from 1.2625 down to 1.2322 due to events in the Euro zone and the US.
Often we find that events which happen in the US often tend to find their way to the UK shores. After all we do say that when America sneezes the UK catches a cold. This is concerning as the Bank of England may just well look at what the FED have carried out and look at further QE here in the UK.
Yesterday reminded us exactly how much QE can weaken a currency. If the UK looked at further stimulus or a rate cut then the pound may well just continue its decline against the Euro and also see the excellent gains against the USD and southern hemisphere currency reversed.
With the pound at a 4 month high against the USD and with risks of further losses against the Euro now may be an excellent time to look at your options of securing your currency. For a small deposit you may secure your funds on a forward contract to limit your exposure to volatile exchange rate fluctuations. This option will also give you the peace of mind that you know exactly how far your funds will go. I feel that we will see sterling exchange rates drop back down to the 1.50’s before the end of the month so you may wish to act soon if you have an up and coming requirement.
If you have a requirement to buy or sell USD or Euros please do inform me of what your requirement is and I can contact you to go over all the options that are available to you. The rates of exchange that we can achieve are significantly better than that of your bank. if you contact me you can compare the rate of exchange with your bank and hopefully you will be pleasantly surprised with the saving that we can make you. You can contact me by emailing me at [email protected]
2012-09-14 14:00:37
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