Staying up to date with the latest currency news can help you determine the best time to move your money and maximise the returns on your currency transfer.
What’s been happening?
The Pound has come under notable selling pressure over the past few weeks as investors have grown increasingly unnerved by the UK’s economic outlook.
Despite Liz Truss’s new government promising to freeze energy prices, most economists seem certain that a UK recession is now inevitable, with the bleak outlook leading GBP exchange rates to fall to multi-year lows.
The Euro has also faced headwinds in recent weeks, particularly after Russia’s decision to indefinitely shutdown the Nord Stream 1 gas pipeline. The move stoked fears that energy shortages could plunge the Eurozone into a recession this winter.
Expectations for a 75bps rate hike from the European Central Bank lent some support to the single currency, although the hike itself did little to support the Euro as it was accompanying by a slashing of the bank’s Eurozone growth forecast.
Meanwhile, US Dollar has remained well supported, with global recession fears fuelling demand for the safe-haven currency.
This upside in USD exchange rates has been reinforced by some upbeat US economic releases, which have underpinned Federal Reserve rate hike bets.
What do you need to look out for?
Looking ahead, it's likely that Europe's looming energy crisis could infuse significant volatility into the currency market.
Elsewhere we are likely to see the Bank of England and Fed’s latest interest rate decisions direct movement in the Pound and US Dollar. In terms of the BoE, the bank’s reluctance to accelerate its monetary tightening leaves Sterling at risk of further losses amid fears the bank may be falling behind the curve.
Meanwhile, the Fed is expected to deliver another 75bps rate hike later this month, with the US Dollar poised to extend its bullish run if the bank signals it will maintain the current pace of tightening through the remainder of 2022.
Protecting your transfers from currency volatility
With the outlook in the currency market looking increasingly uncertain you may want to take steps to protect your transfers from any potential volatility.
While many people rely on their bank to handle their international transfers, banks generally operate on higher margins, meaning less competitive exchange rates, and they don’t offer the same support and services as some specialist brokers do.
With a leading currency broker like Foremost Currency Group, you’ll likely secure a better exchange rate, along with expert guidance and different services that allow you to mitigate the effects of market volatility.
One particularly popular service is the Forward Contract, which allows you to fix the current exchange rate.
While locking in a rate in this way would mean you'd miss out if the exchange rate strengthened, your transfer would be protected from any negative market movements. Making forward contracts perfect for anyone going through the often-lengthy process of buying or selling a property.
To find out more about how you could save money and protect your currency transfers contact Jack Wiles at, JSW@FCGWORLD.CO.UK, +44-1442 892 073 or +44-7720088962.
Disclaimer: The information provided in this article is being provided solely for promotional and informational purposes and should not be construed as investment, tax or legal advice.