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The following article is the first of monthly updates from Foreign Currency Direct that we will be sharing with you.
Here’s the latest currency update news for september 2014:
Following an extremely volatile few weeks for the Pound we finally have the decision from the Scottish referendum and Scotland has decided to stay with the U.K.
We saw a huge turnout as far as voting goes (84%) which just goes to show how much this has captivated Scotland and divided opinion north of the border.
Sterling has had a roller coaster ride against all major currencies over the past few weeks as polls have swung back and forth both ways after we had months of the markets almost assuming we would see a No vote.
More importantly what this means for the Pound is that it has bought both economic and political certainty to the U.K for the time being, both of which should give the Pound a little strength in the coming days.
Investors and speculators alike hate uncertainty and the mere fact that the referendum had seemingly been in the balance has been holding Sterling back recently even with fairly solid economic data still being released almost on a daily basis.
Sterling exchange rates have moved around three and a half cents from high to low against the Euro, four cents against the Dollar and ten cents against the Australian Dollar in the past two weeks as the markets try to second guess just what would happen with the vote.
Finally this morning the time has come and I am pleased to say the U.K will indeed remain as one and now hopefully politicians and the Bank of England can fully concentrate on pushing the economy forward as a whole, rather than having to unravel an exceedingly complicated tangle that may have cast a grey cloud over the Pound and kept it weak for months to come.
So what does this mean for me if I have currency to exchange?
Being an unprecedented situation, nobody really knows the exact impact this will have on Sterling but in my personal opinion I now feel that the Pound will kick on and gain a little strength over major currencies and heads can now turn towards if or indeed when interest rates may rise.
For those looking to sell foreign currency I would say now could be the time to secure your exchange rate. If you take the Euro as an example, it was only a few weeks ago that the European Central Bank not only cut interest rates but also indicated a few changes in Fiscal policy coming up. Most notable of these is QE (Quantitative Easing). QE can generally weaken a currency once put into place and was one of the big reasons we saw both Sterling and the Dollar weaken a lot over the past few years. In my opinion once the dust has settled over the referendum the focus will come back on to Europe which still has huge problems to tackle and I feel the Euro could be in for a tough time of things.
One must remember however we have crossed this bridge before and The Euro is a powerful beast. Only two years ago most analysts expected a rise through 1.30 when the Euro had even more problems than they do today and within a few months it was back below 1.20.
In essence the key thing you need to make sure you do is to keep in close contact with a currency broker no matter what your requirement in these particularly volatile times.
Here at FCD we pride ourselves on not only the very best rates of exchange but also in being extremely proactive for our clients, making them aware of any spikes in their favour or drops against them. We can’t let you know if we aren’t aware of what you are looking to do so make sure you. Contact us to place a rate alert in FCD’s system to make sure you do not miss out on a great opportunity.
There is very little out in terms of economic data today so I would imagine we will see the reaction to the no vote take centre stage throughout the day.
Sterling is trading at over a two year high against the Euro, a two week high against the Dollar and the highest we have seen against the Australian Dollar since March this year.
If you would like to speak with one of our experienced and knowledgeable traders about any currency pairing then click the banner below to request a call back or contact Lisa from Family life in Spain and we will contact you.
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