Today we had more bad news for the UK that weakened the GBP to its lowest level for 16 months against the EURO and 8 months against the DOLLAR. The reason for today’s fall is due to information released from the Bank of England (BOE) Minutes of their last meeting. In the meeting the head of the bank Mervyn King voted for an extension to the Quantitative Easing (QE) program which currently stands at £375 billion and he was not the only one. Out of the 9 members 3 voted for an increase. This has increased the potential of more QE from the bank in the near future. QE increases the flow of money in the system by “printing” more which in turn makes the money in the system worth less which de-values that currency i.e. the pound goes down.
Why does the rate continue to fall? Currency war?
Sterling has continually been falling this year and has already fallen 7% against the EURO and 6% against the DOLLAR since the beginning of the year. There is speculation that the UK Government is aiming to weaken the pound to help our exports. It is thought that this could assist the UK grow in Q1 of 2013 so as a result avoid a return to a recession. A recession would weaken the view of the pound globally plus be a political nightmare for the government. This is a growing thought inside investors so as a result we could see rates continue to fall.
Should I buy euros now before it gets worse?
My view is that if you need to buy euros or dollars this month to move sooner rather than later. Longer term through April I still think the trend will continue to be negative for the pound but there will
continue to be spikes that buyers can take advantage of. For example over the last 7 days GBPEUR has had a high/low difference of 2 cents. So timing a trade well could still save you thousands. That is the service that we offer here. Helping our client base time trades well when SPIKES occur, plus while gaining access to the award winning exchange rates of offer.
If you need to make a currency transfer and want the best price at the right time feel free to contact us here. We have been helping people for over 12 years save money and am 100% sure we can save people money.
There is nothing to lose by getting in touch – Call today on the normal number or email [email protected] – Thank you, Steve Eakins