Sterling weaker against most currencies
When it comes to making overseas investments, the fluctuations in the international currency markets can make all the difference between making the most out of a transaction.
Sterling to euro exchange rate
Recent figures reveal that sterling is weaker against most currencies than it was 12 months ago. A pound will buy around €1.15, $1.56 (USD) and $11.74 (HKD) at current rates as of the end of April, compared to €1.20, $1.59 (USD) and $12.30 (HKD) on a year on year basis.
Depending on the sums involved in any particular transaction, this could mean hundreds or even thousands of pounds difference for those spending money in other countries.
This covers the whole gamut, from holidaymakers on cheap package getaways right through to serious investors looking to buy property overseas.
For this reason, it is even more crucial to compare the market before deciding how to send money from UK. It is worth bearing in mind that the rates offered by currency exchange specialists are generally much better than those offered by banks.
The fact is, apart from Iceland’s Krona and the Japanese Yen, the pound is now weaker against all currencies than it was this time last year. In the case of the Yen it is even more striking, as that particular currency has been deliberately devalued by the country’s own government.
Buying £50,000 worth of euros today will return a significant amount of €6350 less than it would have around the time of the Olympics last year, meaning that British buyers who had benefited from the Eurozone crisis, particularly for purchases in Spain, France, Greece and Italy, are now likely to be paying more in relative terms.
Economic uncertainty for the whole of the UK economy is one factor in the ongoing equation, but the recent downgrading of the country’s credit rating has also had an effect.
Thankfully the much feared ‘triple dip recession’ has failed to appear as of yet, but it has done little to halt the decline in the value of sterling against most other major currencies.
With little sign of the ‘green shoots of recovery’, analysts are finding it hard to predict exactly what is likely to happen in the medium to long term.