August’s currency update
Things in Euroland have moved on a long way from the precarious situation in early July. Greece’s government has apologised to Brussels for messing around, the parliament in Athens has approved reform measures unthinkable a couple of months ago and a new bailout has been agreed, all bar the dotting of a few Is and the crossing of some remaining Ts.
Consequently, the euro is in better shape than it has been for some time. Since our last missive it has been the top-performing major currency, beating the US dollar by three quarters of a cent and taking one and a half cents off sterling.
A significant part of those gains has come from a swift re-assessment of the outlook for US and UK interest rates. Until recently, the assumption of investors was that US interest rates were likely to move higher in September or December and that UK rates would head north “around the turn of the year”. Developments in the last few days have poured cold water on those expectations.
The minutes of the Bank of England’s Monetary Policy Committee showed only one member voting for an increase in August. The bank lowered its inflation predictions for the coming year. And the governor backed away from his “turn of the year” forecast. Federal Reserve president Dennis Lockhart made a similar U-turn about a September rate hike.
Most recently China has begun what could be a progressive devaluation of the yuan, presumably to stimulate slowing economic growth and a top-heavy stock market. The move has spooked investors, leading to emerging-market and commodity-related currencies taking a battering. The suspicion is that policy-makers at the Bank of England and the Fed will hold back from raising interest rates to avoid making investors even more nervous than they already are.
For more information about these and the other options that are available to help send money to and from France as efficiently as possible call the experienced and friendly team at Moneycorp. You can call straight through to the trading floor on 0044 20 7589 3000 and quote “Sextant” to benefit from great rates and first transfer free (usually £15 over the phone and £9 online).
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Moneycorp are Sextant French Properties preferred currency partner and have been selected due to their great rates, great service and great solutions. These are some of the reasons they have transacted over two billion pounds for their clients.
Moneycorp has been in the business of moving money between countries and currencies for over 30 years and offers money-saving foreign exchange to customers ranging from blue-chip businesses to private individuals. We make money transfers simple and help you to manage foreign exchange rate movements.
Moneycorp also offer a number of different contract options for Sextant clients including a forward contract where you can fix a rate of exchange for a period in the future using just a small deposit, perfect to help take the risk out of the currency markets and budget for your French property purchase.