How to Get the Best Exchange Rates on GBP/EUR? (Matthew Vassallo)

Pound to Dollar Rate Shrugs Off UK’s Economic Woes

In order to maximise the market value on any currency exchange, it is important to understand how and why the currency markets move and what affects the Pounds market strength. Sterling was always considered a safe haven currency in times gone by but has lost its attraction to investors over the past few years, as the economic down turn took a global stranglehold. With the most devastating effects seemingly taking place across the Eurozone, the UK economy was hit from two angles, as it struggled with its own fiscal requirements and those of the Eurozone, which has halted our once thriving export industry.

What is becoming apparent is that the UK economy is slowly improving and we are now seeing the economic data to back that up. With our Service Sector showing very positive results and the housing market taking a sharp upturn, there is reason to be optimistic. However, those expecting the Pound to rise purely on an improving economy only have to look at recent negative market moves for the AUD and the CAD (two economies performing consistently well) to see that one plus one does not always equal two.

There is a concern that unless we narrow our trade deficit, our economy has no way of performing at its full capacity and the only way to improve trade with weak economies, is to devalue that particular currency. There are various methods used to achieve this but the most popular are interest rate cuts and Quantitative Easing (QE). The Reserve Bank of Australia have cut their base interest rate, which has immediately cause the AUD to weaken and I think it is likely we will see further rounds of QE here in the UK to push the Pound back below 1.15 in the second half of 2013, with the hope this will kick start our export industry once again.

Here at we are able to provide our clients not only with award winning rates of exchange but a bespoke service designed to give you the client, as much insight into the markets as possible. If you would like to find out the type of rates or contracts we offer, or need to be kept up to date with all the latest market movements, then please call us on 0044 1494 787 478 or email me directly at [email protected].