The facts on why the pound has fallen

The pound has been on a rollercoaster of a ride against the Euro since the 10^th of December 2015.

7 weeks later and the pound is still down 10 cents from the high period with not much indicating that we are going to see a significant rebound.

The loss fall from 1.42 down to 1.3150 at present is representing some very attractive selling Euro opportunities for those of you looking at repatriating funds back to the UK. Those of you though that are buying over in Europe may have agreed your properties when the price of buying the currency was stronger. If your completion is fast approaching and you are hoping for the rate to bounce back to the high 1.30’s in the near future then you may be in for a surprise. If you have recently agreed to buy a property then hopefully you have all budgeted at a worst case scenario as you always should do. If you can exchange your funds above that level at least you will be ahead of the game.

Many clients have been locking in their Euros of late. The uncertainty of what is around the corner, in what has been one of the most volatile starts to a calendar year always makes clients question what if the rate does continue to fall. If you do not want to take that risk, forward buying your Euros is a wise way of knowing that you cannot lose out by a single penny regardless of what happens to the rates. And the best thing about it is that you do not need to settle the full amount of your funds straight away.

The facts on why the pound has fallen:

Referendum:

Headline news at the moment. Scotland this week stated they would pull out of the union if this were to happen. The last Scottish referendum caused the pound to fall 4%. Could you imagine what would happen if we pulled out of Europe! The referendum may not be called until the end of 2017. That would be nearly two years of uncertainty for the British economy and the great British pound.

David Cameron may call it by the end of June or July but this is looking unlikely unless he negotiates exactly what he needs now.

Global uncertainty:

One of the world’s largest economies China is going through a slowdown. The growth has been one of the lowest for years now. This has sent shock waves through financial markets and the uncertainty of how things will pan out has led to comments from central banks that raising interest rates just now is not a wise move.

Oil Prices:

The price of a barrel of oil has fallen significantly over the last month. This does effect the UK economy as it is one of the main reasons inflation is so low. With the potential for Iran to flood the markets with even more oil the price could fall further. Inflation stays low and again it will be difficult for the UK to raise interest rates.

Inflation:

The lower inflation gets or while it remains at these levels it effects the pound. We need inflation to rise to be able to hike interest rates. While interest rates are low the pound could continue to be sold off. Bank of England members just last week stated that all of the above gives the bank the opportunity to keep interest rates low for a longer period of time.

The above to me means that it could be a while before the pound and more importantly against the Euro will significantly rise back to 1.40.

Trying to second guess the market can be very difficult and sometimes more is lost through indecision than a bad decision. Finding a currency specialist that can provide you with the information to help you decide when to buy the currency could be a great asset for you to have.

Do you want more information ?

So if you need to buy or sell sterling and would like to be kept up to date with all the latest data releases and exchange rate movements then feel free to contact myself Ben Amrany. If you are buying or selling a house in France we will make sure your monies are in the right place at the right time, we work hand in hand with you and Cle France.

For more information on the currency service I can provide please feel free to contact myself...

Ben Amrany from FC Exchange follow this link or phone and ask for myself and quote "Cle France" on 020 7989 0000.

You may contact me directly using this form (click here) with your requirement and I will explain the options that are available to you in getting the best exchange rate.