I have been away from the office for the last few days so todays post will give you a summary of events that have impacted sterling and the dollar in the last 72 hours and what we can expect over the next few weeks.
The last couple of days have seen Sterling drop against the U.S dollar with GBP/USD exchange rates falling to their lowest levels since the 4th April, hitting a low of $1.5175 on Friday afternoon. It now means the pound has lost nearly 4 cents against the dollar in just over a week. For more information on the exchange rates I can offer click here.
So what has caused the decline in rates?
It has been a mixed few days for the UK economy and the pound, earlier this week the Bank of England released their latest Inflation Report and there was some positive news for the UK with BoE Governor Mervyn King saying "a recovery was in sight" and that inflation in the UK should fall to the targeted 2% within the next two years. The BoE also increased their growth forecast by saying that economic growth in 2013 should now be greater than 1% compared to the previous estimate of 0.9%.
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Despite the positive news any gains Sterling could have made were soon cancelled out by the news that UK unemployment has increased by 15,000 between January and March this year, with 2.52 million people now out of work.
There was also more positive news for the United States economy, figures released yesterday (Thursday) showed that inflation is currently running at 1.1% against a target of 2%, coupled with the talk that the U.S Federal Reserve (FED) may reduce it's on-going stimulus package the dollar has strengthened massively in the last few days, wiping out the gains the pound has made against the greenback since April.
What does this mean in monetary terms?
On the 1st of May I posted that GBP/USD exchange rates were close to breaking through $1.56 and the drop in rates we have seen since have not really helped anyone looking to purchase U.S dollars. A £200,000 trade today will now see you receive nearly $8,500 less compared to the start of the month. However, one mans loss is another mans gain so if you are selling dollars it is certainly looking a little brighter, converting $200,000 dollars back into sterling would now get you an extra £3500 compared to the same deal booked on the 1st of May.
How to make the most of your transfer
While know one can predict which way the currency markets will move there are a number of steps you can take to either protect yourself from adverse market movements or take advantage of any sudden spikes. If you would like more information on the different types of currency contracts I can offer or would like to know how much money I can save you, use the link below and complete the contact form for a free, no-obligation consultation.
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