This led to speculation that the government is against a further interest rate cut by the Bank of England, who are of course supposed to be independent. While normally this should have bolstered the Pound, in the current climate it just raises more uncertainty which in turn has weakened the Pound further. You can read more about this here on Reuters.
As you can see from the chart above, in less than a month the Pound/Euro rate has dropped by 7 cents, illustrating how quickly things can change. Anyone that needs to convert currency shouldn't just be watching the rate and hoping things will get better. Instead, you should take stock of your options and decide on a sensible strategy to limit any further losses in the rate.
Converting Sterling to Euros?
You have a few options. Firstly, sit back and hope the rate will go up. It might, but the only direction it's moved recently is down. If you want to hold out, then consider a 'Stop Loss' order that fixes your rate if it continues to drop below a pre-agreed level. In this way you can still take advantage of a rebound, but have protection in place in case it drops further. Alternatively, just fix the rate now with a Forward contract, so that you know what your Euros will cost you. (You can fix today's rate for up to 2 years by paying a 10% deposit). If you're unsure what to do, then consider hedging your bets; convert half your funds now, and wait and see what happens before converting the rest.
If you need to convert Pounds to Euros, click here to make an enquiry, get a quote and find out more about how we can help you get the best rates and avoid adverse exchange rate movements.
Converting Euros back to Pounds?
Many of our clients are selling properties in the EU and want to convert their funds back to Sterling. In the last year, the rate has improved by 19%. Even if you haven't found a buyer for your property, you can fix the rate now for you for a 2 year period, so you can take advantage of Sterling's weakness while waiting to sell. Considering the 19% gain in the rate, this gives you room to manoeuvre on your selling price. Bear in mind you're nearly 20% up just due to the exchange rate alone, this means you could lower your price to get a quick sale, and still gain significantly due to the rate.
Selling property overseas? Click here and have a free consultation with us about how you can make the exchange rate work for you. We provide exceptional rates of exchange for our clients, and have a range of contract types to help you make the most of your currency.