Why the pound in your pocket is disappearing.

The last 3 weeks or so has seen the pound trade against the euro eadrom lows of 1.129 to a high of 1.1650 which has quite an impact on any money you transfer. Pretty good news though if you are sending your money back to the UK . The recent change in rates means that if you are transferring a £1000 insteadof getting around 1150 euros you will probably receive today around 1120 euros, it doesnt sound a great deal but multiply by 12 and all of a sudden you have lost at least 360 euros per year.

Now why is is happening?

You have no doubt read quite a bit about all the problems in the Eurozone, not least recently with Portugal having to go cap in hand to the ECB and IMF for a bailout and the rumour mill still persists that Spain will follow. Nobody is too sure if this will happen, what we do know is that Spain certainly is trying to manage its economy in a far stronger way than Portugal had been. It has introduced a string of measures to tackle the problem by increasing taxes etc and it hopes to avoid non repayment of its debt.

-The interesting time will come at the end of ths month when its due to pay back interest on funds raised earlier.

Whilst much has been said about the eurozone the UK has unfortunately been creaking a little and ocassionally this goes unnoticed by the general public although a quick look at the rates of exchange will confirm all is not right in the UK.

Consumer confidence is low, retailers have been issuing various profit warnings and just recently have announced the lowest March retail figures for a considerable time. Manufacturing sector is also showing concerns due to the increase in raw material costs. Add this to the poor housing sector with an insufficient number of new mortgage applications and you start to answer, why the pound is performing so poorly.

Generally people in the UK are attempting to pay off their debt as they are concerned about the possibilty of interest rate hikes and the impact on their pockets, they are paying off debt rather than incurring it . Of late eyes have also been focussed on the UK banking sector as the Independent Commission will soon publish its report on the Banking sector.

The aim will be to ensure the British taxpayer will not have to bail out the banks in the event of another crisis. One of the views is that It appears the banks will have to ring fence customer savings and deposits from any high risk future investments. Further far reaching proposals will be included so keep your eyes open for the publication of this report.

With the recent interest rate hike in the Eurozone and the concerns in

America it is clear that investors have an appetite for the euro hence the

additional reason for its strength as it at the moment the favoured

currency. Against the dollar it has recorded recent highs of 1.4490 and

the probabilty of going beyond this figure is not that far away.

As with all things the market can change quickly so if you don't need to

change your money now then it may just be worth the wait. Are you a

gambler?

If you need any advice on when to transfer your money to the Canary Islands please contact our preferred partner Moneycorp on 951 319 700 and mention Goldacre Estates of Fuerteventura

http://www.buyin-fuerteventra.com

Currency Market Update From Moneycorp Foreign Exchange Specialists

Over the last three months the foreign exchange market has generated plenty of noise but hasn't thrown much light on relative currency values. From sterling's point of view in late February, nothing has really changed from its position in late November against the euro, the Australian dollar and the Canadian dollar. The pound has strengthened by three yen, four US cents and six New Zealand cents. Among the major currencies it has only lost ground to the Swiss franc where it is down by six cents.
The Swiss franc's gains are down to nervousness among investors. They worry about Portugal going down the same path as Greece and Ireland moving towards sovereign bankruptcy. The recent bond auction in Portugal will be the last, the next step will be cap in hand to the IMF and nobody really wants that
And they are worrying now about Australia and New Zealand. The pound has achieved a substantial recovery this year against the Aussie and Kiwi dollars following natural disasters there; flooding in Australia and earthquakes in New Zealand. It looks as though both countries' economies will stagnate in the first part of 2011.
Concerns about America are more entrenched. By the end of its 'quantitative easing' programme, the Federal Reserve will have printed some 2.6 trillion dollars. What happens when it stops the printing in June? Will the States follow Greece and Ireland into receivership? Maybe not, but the unease lingers.
Sterling is currently feeling the benefit of investors' belief that interest rates will head higher this year. The Bank of England argues, perfectly reasonably, that at least half the current 4% inflation rate is down to two things: high oil prices and January's increase in the standard rate of VAT. Critics say the Bank is neglecting its duty to keep inflation at 2%. The pressure on the Bank to be seen to be doing something is growing. It looks likely that rates will go up this year though not by much and that the anticipation should support sterling.

Finally the worry now is about the rash of revolution spreading across North Africa and the Middle East. The potential impact upon global economies if we continue to see oil price increases although thankfully as I write the oil price has shown a slight decrease.
..If you are concerned about the euros in your pocket or transferring funds abroad talk to our currency specialists Moneycorp on 951 319 700 and mention BuyIn Fuerteventura or Goldacre Estates for your preferencial rates .

http://buyin-fuerteventura.com

International Money Transfers Cost Britons £101M Each Year

Poor bank rates and high charges for foreign exchange transactions mean individuals need to be savvier when transferring money overseas. Research by Moneycorp reveals that Brits are potentially losing over £101m a year by not shopping around for the best deals when transferring money abroad. Furthermore, uncompetitive exchange rates and high bank charges are costing individuals a lot of money, despite a concerted effort by most to reduce their outgoings on luxury and even staple items.

Head of Personal Clients at Moneycorp David Kerns, comments:

“While many individuals are visiting comparison websites more frequently, checking voucher code sites and consulting online consumer forums before purchasing goods in order to save money, this mindset doesn’t seem to have extended to foreign exchange. As a result, individuals are missing out on a very large sum of money they could be saving, by transferring funds overseas through a foreign exchange specialist rather than a bank. Not surprisingly, high street banks are cashing in as a result of this surprisingly apathetic approach.”

People who own additional properties abroad and make regular mortgage and/or utilities payments will also be badly affected, as every transfer is open to individual transfer charges, in addition to exchange rates.

People buying or selling property overseas and people emigrating or repatriating will be particularly affected, though this issue will affect all Brits who are transferring money overseas.

Data from the UK’s number one property website, Rightmove Overseas, reveals that the average house price in the Costa del Sol in Spain is currently €369,860.68. With a deposit of 10% (€36,986), using a high street bank rather than Moneycorp would cost an individual, on average, an extra £558 on their deposit alone.

An individual who wants to transfer a lump sum of £100,000 to an account in Europe would lose out on an average of €1,690 by using their bank for the transfer into euros.

David Kerns concludes: “Despite the UK coming out of recession recently, individuals shouldn’t be lining the pockets of their bank managers and it’s in their best interest to maximise their investments. Prior to making any overseas payments, we always advocate that people shop around to get the best rates possible.”