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By Alex Ellis

Sterling exchange rates fell a cent yesterday as the market reels in the build up to New Years. In the new year we will see VAT rise to 20% as well as further budget cuts and austerity measures being introduced. If you have an upcoming currency exchange then there is the possibility that GBP/EUR exchange rates will fall further following this.

We have seen recently investors move away from those currencies currently seen as riskier and into those historically seen as safer havens – an example of this is the recent strength seen for the US dollar. At present the pound is still seen as a risky currency as the economy is still not growing rapidly.

By Alex Ellis

Sterling exchange rates may suffer once December’s retail sales figures are released, predictions show that the adverse weather conditions will have massively affected the retail sales in what should have been the busiest month of the year for the retail sector. This in turn could affect the economy so it is worth keeping an eye out for the impact of this release nearer the time, in order to do this speak to a currency broker who can ensure you are well informed beforehand.

In terms of data releases this week will be fairly quiet with only a few pieces of data due for the UK, the majority of which concerns the mortgage approvals for the UK in December. The housing market is still fairly sluggish and we could therefore see approvals affected. In order to discover the impact of these releases use Currency Line to contact an experienced currency broker who can ensure you are well informed and have a number of tools to protect your position.

By Alex Ellis

Looking ahead to next year there are 3 main factors that I believe will influence sterling exchange rates:

1. The Coalition’s austerity measures – these budget cuts are some of the most severe that the UK has ever witnessed and we could therefore see sterling weakness as a result. As unemployment is likely to rise following the cuts and VAT is set to increase we may see consumer spending affected.

2. Rising Inflation – this is a big issue because if inflation spirals out of control then the economy is much too fragile to be able to cope, until we can categorically see some significant growth. Usually the government would raise interest rates to tackle inflation but they are not able to in the present climate and therefore they remain stuck between a rock and a hard place.

3. Another issue for the pound is the exposure to the debt crisis within the Euro zone and this could escalate into a real problem if any further economies fall into a similar category as Greece and Ireland. I would expect that if this were to happen GBP/EUR exchange rates would suffer as a result.

As a currency broker we have a number of contract options which can be tailored to suit individual client needs and ensure that you minimise both your risk and are well informed before committing to an exchange rates. Currency Brokers’ exchange rates can be over 4% better than a high street bank, on a £100,000 currency exchange this equates to a saving of around £4000.

By Alex Ellis

UK GDP was revised downwards this morning from a previous of 0.8% to 0.7%, although this difference is marginal we have seen sterling suffer as a result. This could be the norm in the run up to Christmas as we could see retail sales figures suffer due to the adverse weather conditions when they are released. Obviously the Christmas period is supposedly the busiest time for the retail sector however predictions are that sales will be greatly impacted as people struggle to make it to work.

Looking in the longer term the Coalition budget cuts and austerity measures are due to come into play in the New Year as well as VAT rising to 20% all of these should cause the UK economy and ultimately the pound to stutter, therefore you may want to consider forward buying to protect your position and ensure you don’t risk losing thousands – December historically sees large drops in the exchange rates and this can be as much as 4% or a difference of £8,000 on a £200k currency conversion.

If you are looking at currency exchange or sending money overseas then an experienced currency broker can ensure that you are both well informed and minimising any risk when exchanging.

By Alex Ellis

Those of you based in the UK will more than likely have experienced the worst of the UK’s weather this week as inches of snow fall have hit across the country. This seems to have quietened down the market as we have literally seen sterling barely move throughout the day. A knock on affect of this snow is that UK retail sales figures are predicted to be massively affected and theoretically this week should be one of the busiest weeks for Christmas shopping.

It will be interesting to see when figures are released next what impact the figures will have on exchange rates.