Since my post a few days ago, we have seen the general downward trend in Sterling/Euro rates resume, falling from €1.38+ to €1.36 in the last couple of days. As the chart below shows, in the last 3 weeks alone the Pound has lost nearly 5% against the Euro:
Economic data from the UK has actually been quite good! Growth has been revised up, manufacturing has picked up, and the UK is now the fastest growing major western economy. Despite this, it looks like the Pound is going to drop further against the Euro.
The main reason as I’ve touched on a few times in the last few weeks is the general election. The latest polls suggest a hung parliament and it was this that was the catalyst for the drop earlier in the week. If we cast our minds back to last year’s Scottish referendum, the uncertainty that created pulled Sterling significantly lower against other currencies. The election is likely to have the same effect, and it could potentially be a much greater one. Tonight will also be interesting with the televised debate for 7 leaders, and could also cause the pound to come under pressure.
Nearly every forecast I’m reading suggests a drop. As an overall majority is highly unlikely, this uncertainty is likely to continue for at least several weeks after the election, which means a very volatile couple of months for the Pound.
When is the best time to buy Euros?
If you have Euros to buy in the next 6 months, then you’re still doing very well. Yes the rate has dropped from the recent 8 year high, but the rate is still very good indeed and around 10 cents higher than the start of the year.
If you need to buy Euros then you can lock in the current rate for up to 2 years by lodging 10% of the Sterling you want to convert. You are then protected against further declines in the rate and know exactly where you are.
When should you sell Euros back to Pounds?
If you need to convert funds back to Pounds, perhaps from a property sale overseas, then there is every chance the rate could get better for you as the Pound gets weaker. You should just hope this is the case though.
You can utilise what’s called a Stop Loss order, which means if the market moves against you your rate is fixed at a pre-agreed level, while still allowing you to take advantage of any gains in the market.
Getting the best Exchange rates
I work for one of the UK’s leading Foreign Exchange Brokerages; one of the few to be granted an e-money licence from the FCA, which gives you significantly more protection than a firm that is simply authorised by them. Clients that have contacted me directly from this blog over the last 6 years have now converted over £350m Sterling, and saved around 2 to 3% compared to their bank/existing broker.
I can trade over 35 currency pairs on a bank to bank basis for both private and business clients. We also have segregated client accounts, so you can trade with us safe in the knowledge your funds are very safe and secure.
If you need the best rates, are converting over £5k and needs funds wired to a bank account, then it is certainly worth getting in touch to see what rate I can offer you. It costs nothing to get in touch for a quote and you will likely be pleasantly surprised how much I can save you by getting you a better rate. I can also talk over various options and strategies you can consider so you can take control over your requirement. Don’t simply sit back and hope an exchange rate will get to a particular level; hope is not a reliable economic tool. Take advantage of my 15 years of experience in Financial Services today.
We will be closed over the Bank Holiday weekend, and will be back in action on Tuesday. Enjoy the break!