Will the Pound get stronger in the next few weeks? Sterling strength against Euro, Dollar, Australian Dollar, Canadian Dollar, South African Rand and more?

I have a huge amount of clients in the middle of buying a property overseas at present and the general thought on their minds is should I buy my currency now or shall I hold on until closer to completion?

Always a hard choice and one way to look at it is that you would never go forward with a house purchase in the U.K if you didn’t know how much it was going to cost and essentially that is exactly what you are doing if you have agreed on a foreign property yet you have not secured your exchange rate – It is indeed a pure gamble as the markets unfortunately do not move on hope.

There are a few options available for you to protect yourself from a nasty surprise should the market suddenly shift, I will list them below:

Forward contract – This is where you can lock into a rate of exchange for anything up to two years in advance, paying just a small deposit to hold the rate and then paying the balance on or before the date that has been agreed. This contract is great if the rates are above budget and you want to take advantage of them without having full availability of funds.

Limit order – If there is a specific rate you want to achieve then a limit order is for you, there is no cost to place the order and it can be canceled or amended at any point in time as long as the order has not been filled. The order stays in the market 24 hours a day 7 days a week so if you are a busy individual and do not have time to keep watching the exchange rates than this may be ideal for you.

Stop loss order – The opposite to a limit order if there is a rate you want no worse than then this is for you, If rates should suddenly drop away then as soon as the market hits your lower level your currency is bought out meaning you are protected from going over budget.

Hedge your bets – Why book out all your currency in one go, many of my clients split the risk by carrying out their transactions in chunks, meaning if rates should drop away they are not as exposed and if rates should spike they still have the ability to take advantage with a proportion of their money.

How will the Pound perform in the near term?

Of course we can never be sure exactly what is around the corner but after some positive news for the U.K yesterday I think the Pound could be on to have a good few weeks against the majority of major currencies, the NIESR (National Institute of Social and Economic Research) actually believe that our economy grew by 0.8% in the third quarter of 2012. 0% or above would technically mean the U.K is back out of recession and although I have no doubt that we still have a huge amount of problems to resolve in the U.K this can only be seen as a positive thing for the Pound.

I generally have a good feeling about economic data this month and think the Pound could have a solid performance, however be aware that there is a lot going on with other economies most notably within Europe so even with good data for the U.K this still could switch our fortunes back around.

For more information on getting the very best exchange rates plus a forecast unique to your particular requirements please feel free to make contact directly with me Daniel Wright djw@currencies.co.uk  or call  01494 787 478 asking for me directly. I welcome any enquiries for  clients looking for assistance on their transfers. I look forward to hearing from you and hopefully enlightening you! Thank you.

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