May’s currency update

The last three months have not made a great deal of difference to the value of euro. It is half a cent above its average daily price against the US dollar and half a cent below its three-month average against sterling. Over the last month the story is very similar; the euro has conceded three quarters of a cent to the pound and is stronger by half a cent against the dollar.

The situation today is almost exactly as it was at the turn of the year. The European Central Bank’s tussle with persistently low inflation could see it embark on a money-printing programme similar to those carried out by Britain, America and Japan. The US Federal Reserve is winding down its own presses but not as quickly as investors would prefer. And the Bank of England is being deliberately vague about its plans to increase sterling interest rates.

So investors are left to scrutinise the economic data as they appear, reading into them whatever they think they can about the future. In April they failed to come down strongly in favour of any of the major currencies. Sterling came out on top because the UK data were stronger than the rest of the field. The Australian and New Zealand dollars were at the rear of the field because of nervousness about “risky” investments. The US dollar struggled, especially after news that its economy hardly grew at all in the first quarter of the year. And the euro soldiered on, aided and abetted by the president of the ECB.

ECB President Mario Draghi would like his currency to settle down, even to weaken, to help him return Euroland inflation – currently 0.7% – to its 2% target. He says he has a money-printing strategy on the stocks, ready to launch if inflation remains low. But the market’s assumption is that the ECB will do its utmost to avoid going down that path. Investors are therefore relaxed about the euro’s monetary outlook and are not inclined to punish it for something that has not yet happened and might never. They rattle the euro’s cage from time to time, just to show they are taking an interest, but they have no inclination to give it a hard time. Unless and until the ECB does act to dampen the currency and lift inflation – and it is not inconceivable that the move could come in early May – the euro is unlikely to suffer to much damage.

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).


What next?

Call +44 (0) 20 7589 3000 (Open 7:30am – 9pm Monday 9am to 1pm Saturday to Friday UK Time)

> Open a Currency account today

> Request a call back

> Ask questions about Currency Exchange

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.


This entry was posted on Wednesday, May 7th, 2014 at 12:56 pm and is filed under Currency exchange, Finance, Money transfer . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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