Earlier today UK unemployment fell lower than expected which created sterling strength. This is due to the UK economy looking stronger so demand for GBP climbed. So far sterling has climbed against the euro by nearly a cent. Anyone with a currency exchange to complete are €800 better off as a result for every £100,000 trading.
If you are planning on entering the currency markets to make an exchange the below will probably be of interest. However first a little knowledge sharing for first time traders and a reminder for regular traders.
There is three different rates we all have access to:
- Inter-bank price/ mid-market price – This is the price that banks trade billions at. We, (you and I) as mere mortals cannot achieve this price. This is however the price everyone will watch due to being the most easy to find. You can find it at http://www.xe.com/ on the internet, in the papers and on the radio.
- Commercial rate of exchange – This is the trading price specialist currency brokers have access to. Companies with the best buying partners will get the best prices. i.e. www.currencies.co.uk
- Tourist rate of exchange – This is what is available at the high street, through the banks and travel agents. This is normally 2%-4% WORSE than the commercial rate. http://www.natwest.com/tools/personal/currency_rates/default.asp
If you sit and watch the Inter-bank price you will see that they change every few seconds, only by a fraction, but over a day this can make a huge difference. Currently the normal amount seems to be about 1% a day, not much on a small transfer but on house purchases, invoices and wage payments it really add up. Now it is timing a transfer which can make the biggest difference with the aim of buying at the peaks rather than at its bottom.
So how do you buy at the best price?
Generally exchange rates are driven by 4 events in summary; political events, acts of terror, acts of god and economical events. We here have access to information due that drives the market, along with the forecasts of what they will show. Using this information we can make an educated forecast when trading might be the most fruitful. It is this information that we use for clients when creating strategies on when to potentially complete an exchange, saving clients thousands a week.
If this is of interest and you want to make sure you are getting the best exchange rate either call us today on 01494 787 478 and ask for myself STEVE EAKINS, or contact me directly via my email – [email protected]
Events this week to watch out for are:
- Tomorrow – UK Retail Sales – Retail sales has an affect on 60% of the UK’s GDP so can quickly change the price of sterling
- Friday – EURO Trade Balance figures – This shows the change in import/export, as the recovery in Europe is supposed to be lead from more exports this will change EURO forecasts and therefore its trading price.
For more information please feel free to contact us of return tomorrow for news on what happened.
Generally speaking if I was buying the euro I would ride the price up for the next few days, if I was a seller I would move quickly to limit risk