Editor’s Note: The Pound is at a two year high against the Euro, reducing the cost for UK cash-buyers by thousands, if not tens of thousands of Pounds. Foreign currency exchange specialist Luke Trevail looks at the factors driving exchange rates, and what the near future might hold.
The pound has continued its resurgence this Summer as a glut supportive data recently has underpinned the hopes that we’ve seen the worst and come through the other side.
Markets reached a near 2 year high in July of €1.2660, a change of 12 cents year on year. To put that into perspective. If you transferred £100’000 in July 2013 you’d have got €114’600, to buy that same amount this July it would only cost £90’521. Quite a change on a large sum of money.
Hopes of a return to the good old days of €1.30+ have been dented recently however as the International Monetary Fund issued a warning stating that the pound is overvalued by around 5 to 10% because of the “lack of competitiveness and limited export diversification”.
A settling down of the buoyant market may now shape the remainder of the year as the IMF went on with recommendations that the UK should continue in cuts to public spending and focus on efforts to boost productivity to make the country more competitive.
The Treasury has rejected the comments and said, “It is clearly nonsense to suggest out policies prevent companies appointing the skilled workers they need”
Those of you who are wanting to secure rates for euros may need to act soon to take advantage of these fantastic prices, and be mindful that if the IMFs predictions come true and we do move down even 5%, then we may not be above €1.20 for too much longer.