Exchange Rates For The New Year

If you are buying or selling a property this year, or moving overseas, January is a good time to start talking to a currency broker to discuss when in the year you will be needing the transfer and discussing what sort of rate you want to achieve. The most money is saved on overseas property purchases by those that not only use a broker to avoid the bank’s poor rates of exchange but also use all the tools available to them to ensure that they catch the very best exchange rate in the constantly moving markets.

A forward contract for example allows you to book an exchange rate well in advance of needing the transfer - meaning that if a fantastic rate is achieved months before you need to complete you can still take advantage of this. With various nations across the globe still pulling themselves into recovery at different paces, we are likely to see another volatile year in the currency markets. Throughout 2010 for example, the cost of an overseas property to someone needing a GBP – EURO transfer fluctuated by 11 percent.

In terms of short term movements this week, UK markets have opened with Sterling at the 1.56 levels against the Dollar and the 1.16 levels against the Euro. The Pound has experienced fairly varied and volatile movement against the Euro and Dollar since the weekend so far – as well as gaining on the Australian Dollar.

Economic news is focusing around very strong manufacturing figures coming out of the US as well as the new VAT rise in the UK. The US manufacturing figures have added to growing optimism for a strengthening US economy into the coming year and there has been a certain amount of hype over whether the UK VAT rise will have a negative impact on retail figures and consumer spending which could therefore bring a wave of data to make Sterling more vulnerable.

In terms of what may move the exchange rates this week there is a significant amount of data from Europe on the remaining days of this week such as retail sales and unemployment figures, and significant employment and payroll statistics from the US on Thursday and Friday which is positive as expected, may push the Dollar higher.

For further advice or how to save thousands on your property purchase compared to the bank, protect yourself from currency movements or set up regular mortgage transfers, get in touch with the dedicated Property Secrets currency specialist: Nigel Hodges of Currency Solutions on +44 (0) 207 740 0000 or by clicking HERE to leave an enquiry.