Currency Warning For Overseas Money Transfers

We’ve seen a tumultuous couple of weeks in the Eurozone, as the ongoing problems in Greece appear to have no end in sight. Lack of preparation for those transferring money abroad could result in huge financial losses.

It is generally agreed that European nations need to accept austerity measures in order to prevent collapse, and with an openly anti-austerity party gaining power in France, and several anti-austerity parties making gains in the (unresolved) Greek elections, it seems as if the Eurozone’s troubles are only just beginning. However, these worries now seem to be causing ripples beyond nations that employ the single currency. With the Eurozone holding its breath for Greece's election in mid-June, it seems unlikely the Euro is going to see any significant growth for the next month.

Concerns about the Eurozone as a whole are causing people to move away from currencies seen as being 'close' to the European currency, such as sterling, and move to less 'risky' currencies such as the US dollar. This caused sterling to fall to two month lows against the American currency yesterday, giving us the lowest rates for transferring money to the USA that we’ve seen since March.

Sterling's case wasn't helped by the announcement that UK retail sales saw a record fall of 2.3% in April, primarily caused by fuel sales being down by 13.2%. This is especially shocking for the UK economy, seeing as retail sales had, in fact, risen 2% in March, helped by panic buying of petrol. The BoE policymakers yesterday said that they intended to introduce further quantitive easing in the Euro crisis continued to cause more chaos. Due to the ongoing problems with Greece, this seems incredibly likely, and will almost certainly devalue sterling further. Sterling’s woes were furthered earlier today as the Office of National Statistics announced their GDP figures, showing that the UK economy shrank 0.3% in the first 3 months of the year.

Sir Mervyn King, governor of the Bank Of England, also expressed concern that the extra bank holidays caused by the Diamond Jubilee in June could reduce national output. In more positive news, despite its own weakness, sterling continues to remain strong against the euro, gaining a slight increase in the rates for international payments to the eurozone.

The US dollar has seen a relatively positive week, caused by the confusion in the Eurozone. As the two major world currencies, the dollar and the euro are essentially on a see-saw. If one gets weaker, the other gets stronger. In this case, the ongoing weakness of the euro is causing the dollar to reach higher and higher.

There is alot of speculation in the media concerning Greece completely falling out of the euro, or even the EU entirely.  European council President Herman Van Rumpuy has stated that he wants Greece to remain in the Eurozone, but would respect its commitments if it chooses not to. The markets themselves seem to be in a state of disagreement over whether or not Greece leaving the Euro would be a positive move for the zone as a whole. On one hand, cutting out what is doubtless the weakest member of the currency would stop the rest of the EU being dragged down with it, and prevent any further massive bailout packages. On the other hand, Greece leaving the Euro would make the currency look weaker on the international stage, causing investors to move even further away from it.

In these troubling times of economic woe, it is important to know that you’re sending money overseas using a currency broker that can give you the best rates available. Anybody looking to transfer money overseas, or keep up to date with the latest currency news, should register with a currency broker to help minimise their exposure to volatile exchange rates. Failiure to seek the right advice could cost thousands more when transferring money abroad.

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 Author: Steven Walsh

Sales Executive

Tel: 0800 043 2623

DDI: 01923 725 727

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