British pound drops against the dollar

Amidst campaigns to determine the fate of Britain’s membership of the European Union, the pound has witnessed its sharpest decline in value since the 2008 financial crises creating a political basket of gold on both sides of the campaign.

In the four days that followed London’s Mayor, Boris Johnson, declare to support Britain’s exit from the EU; a defiance to the Prime Minister, David Cameron, the pound dropped 5cents to settle a seven-year low against the US dollar in all money exchange outlets.

The central question in the hearts of many people is whether they will be richer or poorer should Britain vote to exit. According to Cameron, Britain dropping out of the EU is like taking a leap in the dark. Meanwhile, HSBC and Goldman Sachs have cautioned that upon leaving the EU the pound could subsequently lose an extra fifth of its value.

Pro-Europeans are advising that the current hiccup in the currency is a sign of what could happen in the future should Britain decide to leave. However, the opposition has declared that voters would not give in to scaremongering carried out by independent banks that had warned of the repercussions of Britain withdrawing from the EU in the 1990’s.

According to Richard Trice, who is a supporter of the Leave.EU campaign, multinational banks are seeking to create volatility as it suits them in terms of profitability.

In the last week of February, most money exchange firms quoted the Sterling averaged at $1.3910 which was a seven-year low and heading for its worst weekly performance ever since 2009.

Following the poor performance towards the end of February, the Foreign Secretary, Philip Hammond, commented on the matter term it as a warning of the impact to come for leaving the EU. Hammond told parliament that voting to leave would create an uncertainty of the future which would further generate an adverse reaction in the financial markets.

According to the campaign supporting Britain to remain in the EU, the sterling pound could lose up to twenty percent more in value should the country decide to exit. In a nutshell, the exit would, therefore, mean that the prices of petrol, shopping, household gadgets and holidays would rise.

Britain’s relationship with its EU counterparts has been centralized on its currencies fate as well as the fact that London dominates the $5.3 trillion a day worldwide Forex market. Since the pound is one of the oldest currencies still in use, it has been an accepted symbol of Britain’s imposing might as well as a British exceptionalism.

The £ sign is utilized by the UK’s Independence Party as part of the emblem, and the Prime Minister David Cameron praised his European deal assuring it provided security for the currency. In a statement made by Cameron in regards to the deal, he said that not only had the deal permanently protected the pound and the country’s right to use it, but also ensured that Britain would not be discriminated. However, Cameron has not made any public statement regarding the fall of the sterling pound.

According to the deputy director of ‘Britain Stronger in Europe’ Lucy Thomas, the unpleasantness of the depreciating currency underlined the dangers of the country voting to leave the EU. Furthermore, the economic security of Britain would be put to risk not to mention that family finances would suffer a negative impact as well. Thomas also added that it was imperative for Britain to retain access to Europe’s 500 million customer market; just the possibility of leaving the EU has sparked a depreciation of the pound.

According to the CEO of Merlin Entertainment, Nick Varney, a weak pound would have a good effect on the British industry because it would be good for exports as well as tourism. He also added that should Britain make an exit, and the pound falls further in value, it didn’t strike him as an adverse outcome but rather a good one.

Man steals £40,000 from Bureau-de-change

If you thought the era of brazen, out-in-the-open robbery was a thing of the past, think again. Recently, it was reported that a con man stole £40,000 from the safe of a supermarket in Trafford Park, Greater Manchester and simply walked out of the store without being noticed. This shocking act of theft was committed with skill and a highly refined sense of timing, ac-cording to sources. When asked to describe the robbery, an informed representative stated, “…He apparently wore a glove, knew the code for the safe, punched it in and was able to empty it. At one point a senior member of the Asda staff walked past while he was in the ki-osk and even spoke to him, but he just kept up the pretense as cool as you like.”

So, who was this man, and how was he able to successfully pull off what should have been an incredibly difficult task? The fact that the individual’s identity and whereabouts are still unknown is bad enough, and yet, perhaps even more troubling is the fact that no explanation currently exists as to how he knew the code for the safe within the bureau de change.

Whether or not this suspect will be caught is, of course, important, but this story also provides us with a far more interesting revelation, that being the idea that many of our preconceptions regarding the security and, ultimately, legitimacy of neighborhood bureau de change locations are, perhaps, incorrect. Given the fact that the world of currency exchange has recently been rocked by allegations of counterfeit currency selling in the UK in a separate, unrelated incident, many individuals have begun to ask themselves whether or not their desire to exchange large sums of money for international travel or business at their local ex-change venue is, indeed, the right idea.

This is not to say, of course, that sweeping reform or oversight is needed, but rather that specific problems have emerged in recent months that do need to be addressed by those in a position to remedy them. In time, such direct action will help ensure that the future of cur-rency exchange is not fraught with underhanded, illegitimate dealings and accusations of illegal behavior.

More information about this specific act of theft is likely to be provided in upcoming weeks as police continue their search for the culprit in question.

Is it now time to buy your holiday cash

Following the plummeting value of the pound, holiday makers are flooding money exchange outlets to stockpiling Euros for their holiday money amid fears of further devaluation of the pound. The possibility of Britain pulling out of the European Union has lead to a decrease in the purchasing power of the pound in other countries.

As a result, currency brokers such as Asda Money and Hifx have received overwhelming orders to supply holiday cash to families that are speculating the possibility of costs rising before Easter or summer breaks.

In comparison to the end of February 2015, 43% more Euros got exchanged by Britain’s largest currency seller, The Post Office, in the last few weeks alone. According to The Post Office, it has been selling twice the average amount of Euros for the month of March.

According to Darren Kilner, from FairFX, the past weeks have been busier than usual as customers are concerned that the EU referendum might have an impact on their holiday plans.

Just a few days ago, the Sterling pound dipped against the dollar to its lowest point since the 2009 financial crisis. One year ago, one pound exchanged for $1.51, but the devaluation has brought the exchange rate down to $1.35 per pound.

To the Euro, the pound has depreciated by 9%, and it is now trading at £1 for €1.23; a drop from €1.40 in July last year with experts predicting the collapse of the currency as the EU referendum takes place on June 23.

HSBC estimated the pound could fall further by 20% should Britain vote to leave the EU. From another point of view, USB says the pound could eventually equalize with Euro in terms of value. According to Panmure Gordon stock brokerage’s financial commentator David Buik, talk of the pound falling to a point of parity with the Euro is a bit extreme; however, it is possible that an exchange rate of €1.15 will be reached. He further added that he expected the pound to experience a sharp rise in the future.

According to a panel of neutral experts, it is advisable to visit a money exchange and buy some of your holiday money at the moment.

According to Justin Urquhart, founder of 7 Investment Management, the uncertainty of the British currency will continue to worsen until the countries stand in the EU referendum id established. He added that since it is not possible to know which way a currency will go, it would be advisable to get at least half of your holiday money now. He further stated that he could not see why the pound should gain value.

David Black, the founder of DJB Research; a financial research firm, says the currency’s exchange rate is going to fluctuate in the coming months and advises holidaymakers to estimate how much they are willing to spend and get at least half of the money now.

However, the director of Wealth Club investments, Ben Yearsley advises that should Britain gesture it wants to leave the EU the pound could further depreciate with the reverse also being the case. Thus, he does not rush to get the holiday money just yet.

Is there such a thing as a money tree?

Money is the key to the modern world. Our lives pretty much revolve around it or at least depends on it.

No, there is no money tree that is magical. The magical money tree is something that has been heard of all around the world. Even the prominent people of the world, at one point in their lives used this phrase. However, this phrase is completely false. This is because if it was true, we could not be having limited cash in circulations and central banks could be issuing limitless amounts of it

Giving limitless amounts of currency to the public is not a good practice. This is because according to the bank of England, who aims to ensure that the growth of money is according to its objectives of maintaining low as well as stable inflation.

If there was an endless amount of money, it would have little value for all. This is the true restriction on creation of money as policymakers are always on the lookout not to overproduce it. Producing money is not as easy as talking about it, but a very complex process that depends on skill and luck. Commercial banks create money through some activities like issuing loans to the public. Loans are often limited by government, and can destroy families and businesses easily.

A magical resources-producing tree does not exist and neither does magical money. There is not enough money and resources in existence to meet each and every need and expectation.

Investors who work tirelessly to make their ends meet, definitely do not trust politicians with the so-called tree. Therefore, the power over the supply and circulation of money is taken very seriously by the known major investors.

In 1997, the financial markets welcomed a move of monetary policy powers to be handed down from the politicians and the Treasury to the Monetary Policy Committee (MPC), which is a strong team of nine. These monetary policy powers were formed on the basis that the government was not trusted as being in charge of the interest rates as well as other monetary policy instruments. Therefore, the financial markets entrusted technocrats like Monetary Policy Committee with monetary policy powers. This led to independent banks with least borrowing costs from the government, which is clearly represented by on 10-year bonds.

Investors were very excited to see that they were no longer controlled by the government. The government was no longer the key monetary policymaker. An example is drawn from England where Ken Clarke is said to have ignored the advice of Eddie George on interest rates who was the governor of the bank of England. This ignorance was because he wanted to ensure that the economy was growing rapidly as the election was approaching.

Comparing the yields on US and UK government bonds within a 10 year period, maturity stood at 1.8 percentage, which points in the decade before the Bank of England became independent. Consequently, Martin Weale, who is a member of the MPC attributed the central bank’s independence as a foundation of credible policy making, which ensures that the public have faith that it is free of political interference.

This clearly shows that there is no money magic tree. This clearly shows that there is no money magic tree. This clearly shows that there is no money magic tree. Monetary policy makers make sure that the money that is in circulation is just enough so as to maintain the value of money.

British Currency Taking a Hit

Those who make a point of following currency exchangexchange-related news will likely not need to be told that the British Pound has not fared well in recent times. In fact, it’s fair to say that little good news can be found related to the performance of the Pound recently. A series of repetitive, volatile swings in pricing earlier in the month have left investors somewhat rattled. The Pound has consistently performed poorly against the dollar recently, mainly due to strong economic indicators in the US and continued instability throughout the European Union and the United Kingdom at large.

That being said, it is also important to note that the British pound has been unable to hold value against the EU dollar as well. Earlier in April, the pound was unable to shake investor worry and continued to slip well below expectations. This continued poor performance resulted in a chain reaction of slides against global currencies, including the Hong Kong Dollar and the NZ Dollar. The pound also performed poorly against the Australian Dollar.

Although the month began in a rather turbulent fashion, recent news is far more encouraging. Many analysts are now confident that the downward trajectory of the British Pound has been all but abated. Also, it is important to note that dubious signals related to the strength of the US domestic economy have caused the American Dollar to slide relative to the pound. Neither nation, it seems, has much to be thankful for when it comes to long-term optimism. However, it will be quite interesting to observe precisely how the looming threat of Brexit continues to influence the value of the Pound. After last year’s rather mundane period of sedentary activity, recent global politics have once again swung FX markets into action and ensured that traders are on they toes. For those who are considering whether or not now is, indeed, the time to reconsider investment in the Pound, a growing number of experts are adopting buy positions on the currency. The outcomes of big bets on the currency exchange will likely be revealed in the upcoming weeks as the currency moves towards stability.

Have banks ignored the lessons taught from the crash?

Many people tend to recall very well some of the terrifying events occurring on 15 September 2008, when Wall Street bankwent under bankruptcy. As these sad news broke out, the atmosphere was filled with panic. Many were restless and could hardly find ways to transfer their savings to safer banks.

This situation was very frustrating as people just sat looking at their screens like statues not knowing what to do next. Even if there were some opportunities to be explored, they could not act since they were paralyzed. Phone calls were coming from family members giving suggestions to get as much money as possible out of the banks. Now as they try to recall those days, they feel humiliated by their vulnerability.

Two years later, these people who were very terrified when the incident occurred, they spoke as if they were not shaken by the event. However, the families who phoned their loved ones said that they were experiencing a domino effect. What they were afraid of is that the going into bankruptcy at such a huge institution could halt the financial system. This means that it could have been impossible to withdraw their money, and credit flow seized. This financial crisis was close to causing total failure of the global financial system. If this situation had occurred, then the global trade would have stopped working within a short period.

After the crash and threats of 2008, there has been a lot ignorance among the members of the public the political mainstream. The financial field tried as much as possible to hide the reality from the media by portraying themselves as innocent and that the crash was caused by greed or by some fault amongst the respective bankers. Even after the affected banks declared the need for significant changes in structure, people had doubts and questions about the reality of the crash.

Investigations began into the matter as well as reconstructions by writers, journalists and politicians. Many books have been published on this crash with extensive hearings and recommendations. However, they have not been given much attention by the public as they totally ignored the tragic event.

Euro to Dollar conversion rate declining

As could probably expected given the tumultuous nature of international politics and, perhaps more importantly, the global economy, the fx markets have experienced quite a shakeup over this past month. Although many of us would probably enjoy seeing some degree of stabilisation in the near future, the unfortunate truth remains that many ongoing issues are slowly reaching their apex in coming months (think Brexit, for starters). But, before we continue on what may happen in the future, let’s take a moment to discuss recent shifts in Euro to Dollar conversion, as these actions provide us with a decent context to predict future swings.

Experts consider a recent dip in the noted University of Michigan confidence index to have sparked a brief rally in an otherwise gloomy Euro Dollar slide. While the USD has fallen slightly, the Euro has been given an opportunity to gather the forces needed to initiate a much needed rally. Unfortunately, a host of dismal economic data being recently reported out of the Eurozone has made it somewhat difficult for the Euro to gain traction. According to recent reports, a surprisingly painful contraction in the EU’s trade surplus earlier this year (weighing it at just about 2.6 billion Euros) has proven to be a serious impediment for the Euro Dollar. Combined with the fact that inflation is occurring at a much faster rate than previously thought, the EUR has little positive news to pin a rally on.

In fact, even a spate of negative news out of the US is not providing a true foundation for upward momentum within the EUR. Consumer price date in the United States is at a depressingly low level, which would, historically, provided a valuable ‘bump’ for the EUR – this time around, however, no surge occurred. Likewise, statements from the Fed regarding squeamish monetary policy have almost always paved the way for EUR gains…except now. Suffice to say, it seems larger issues may be on hand if the Euro Dollar cannot find a boost in these historically rich offerings out of the United States. That being said, it is also important to note that international news outside of the US / EU domestic economy can also affect currency prices, and this scenario is no exception to the rule. China has recently announced a higher than expected growth percentages and a substantial boost of exports, news which was received warmly in the US and helped yet again strengthen the USD against the EUR.

What with all of the tumult in the EU regarding a potential Brexit, it is, perhaps, more easy to understand why traditional indicators are not yielding traditional results. The implications of such an observation are, however, troubling in their own right. With a break from history and, thus, historical trends, comes a journey into proverbially ‘uncharted waters’. There is little that analysis can offer when proven indicators do not yield proven results. Of course, this situation could change at a minute’s notice, or perhaps when the US releases their next round of economic reports. Until then, however, it will be quite interesting to observe how the Euro dollar withstands a seemingly unending stream of bad news spilling out of the European press. Sentiment, of course, plays a huge role in both traditional stock exchanges and the fx markets alike. With that in mind, it seems quite reasonable to assume that low morale could easily attribute to low value. Experts advise investors to watch closely for tests of support in the 1.230/20 region, as a break here may signal larger losses in the near future.

You can now change unwanted foreign money into pounds by using this clever machine

Let’s face it – one of the most frustrating elements of international travel is the vast assortment of foreign coins and bills that find their way into our bags, wallets, and purses when we return. Given the lofty commission rates and exchange fees that are often found in both high street banks and local exchanges, many individuals simply do not attempt to convert this money back into local currency, effectively rendering it useless. The times are changing, however.

Recently, a series of new kiosks are being installed throughout London which will allow users to convert a variety of foreign currencies into dollars, pounds or euros. Given the fact that these three currencies are considered staples within the money exchange industry, these kiosks allow for simple, no-hassle transactions for those seeking some of the more common exchanges.

When asked to describe the reasons why these kiosks were originally developed, co-founder Jeff Paterson explained, “The idea was born out of frustration…I had a whole lot of money lying in a drawer that I could do nothing with as the value of exchanging it outweighed the value of the money.”

Although it seems as if the need for a kiosk such as this has been around for as long as anyone can remember, the actual development of this machine is ground-breaking. The new kiosks will, literally, be the first of their kind.

The company behind the development of the kiosks, Fourex, has received valuable support and publicity from a number of high-profile organisations, one of the most noteworthy being Virgin Media. In fact, Fourex recently won Virgin Media’s acclaimed “Pitch to the Rich” competition using this kiosk.

In the upcoming months, kiosks will be installed in various tube stations, beginning with King’s Cross and Blackfriars. Fourex’s plans on have at least 400 kiosks in London by the end of 2017. Although the process of installing and fine tuning these money exchange machines will likely take some time, the fact that Fourex has remained focused on their singular goal is proof enough that this operation will be a resounding success. Although some customers and foreign exchange experts remain curious as to exactly what rates these machines will offer, most are in agreement that they will likely be far more affordable than more traditional money exchange businesses. Believe it or not, the world of money exchange is about to become significantly more convenient.

Major bank set money aside to refund customers for wrong foreign exchange payments

If there wasn’t enough grief already in the world of foreign exchange, the latest news emerging from Barclays is likely to cause a new round of complaining and frustration amongst British travellers. According to a recent report, an internal probe within Barclays discovered that the company had been exchanging currency for their customers at incorrect rates between the years of 2005 and 2012. Essentially, customers who had visited the bank during this period in order to exchange domestic funds for various international currencies were likely given less money in return than they had rightfully deserved. Now that the probe has unearthed this controversial information, Barclays has announced that they are setting aside nearly 290 million pounds sterling in order to ensure that they can properly compensate all of those who may have been “short-changed” by this oversight.

It seems as if stories such as this are abundant throughout the foreign exchange industry. Over the past several years, a number of high-profile controversies have occurred regarding the rigging of the wildly frenetic foreign exchange markets and bureau de change locations. In many of these scenarios, banks found guilty of illegal actions in the fx markets are now being sued by their former customers.

It is also important to note that this is not the first substantial monetary loss that Barclays has incurred this year. In May, Barclays was forced to pay a 1.53 billion pound fine due to accusations of fx market fixing. In another recent incident, it was discovered that Barclays employees were verbally offering customers less than optimal exchange rates on foreign currency and then keeping the difference between their stated rate and the actual exchange rate at the time.

According to David Buik, a broker with Panmure Gordon, the fact that Barclays has taken the initiative and announced this new compensation package for their clients is an attempt to minimize the fallout from the situation at large. Transparency has also been an issue in the fx markets, and yet, in recent years, it seems as if bureau de change locations and other foreign exchange services have developed a particular dubious reputation. It will be very interesting to observe what, if any changes will be made in both the short and near future to ensure that these types of problems are properly dealt with before they become a public grievance. If banks such as Barclays are to preserve their relationship with the general public, scandals such as this must come to an end as soon as possible.

The ‘ins and outs’ of Exchanging Your Currency

Ever since the Brexit results, the pound has suffered against the euro. This can make for a difficult and, oftentimes, confusing journey to exchange your sterling in anticipation of a holiday outside of the UK. The drop in the pound means many families had to refine their travel budgets to accommodate the change in what their pound will get them.

Some bureaux de change offices are offering barely above €1 for £1, especially if you wait till the last minute and changed your money at the airport, for example. On top of the poor exchange rate, you can count on high fees and charges being billed by some of Britain’s biggest banks, such as Lloyds. Lloyds charges 2.99% for every debit car transaction while abroad. It also adds a £1 standard fee on top of the percentage fee. It can cost you £4.50 each time you take money out of a cash machine in Spain. If you must make a cash withdrawal in another country, it is best to take out a large amount, once, than a lot of little withdrawals. By doing that, you can avoid the myriad of flat fees every time you use a machine.

Many people are unaware that you can order money online, ahead of time, and save a lot. Even the pricy airport exchange bureaux can be the best deal, if you order ahead and pick up your money at the airport bureau. There is a website that can help you find the best deal to exchange your currency. TravelMoneyMax.com will search, using your postcode, for the best deal near your house.

Ordering at least 24 hours ahead of time can mean the difference between €1.05 per £1 and €1.17. Some bureaux even offer next-day delivery if you are unable to get to the office in person. There is a small fee for this service but, compared to bank fees, it is a still a good deal. A good thing to keep in mind, whether you are walking up to counter to exchange or you have ordered in advance, is to never use a credit card to exchange. The transaction will be treated as if you were withdrawing money from another country and you will be hit with a lot of fees. Always use cash or a debit card.

No matter how diligent you are when making your vacation budget, something is always bound to come up. Plans change or you face unexpected expenditures. When this happens, it’s wise to be aware of the best way to withdraw money in another country. Most big banks with take off the top approximately 10% of the money you are withdrawing. One exception is Nationwide building society. If you have the society’s FlexPlus account, you can take money from cash machines with no fee at all and the exchange rate is near-pure market rates. There is a monthly fee for this account but it includes family travel insurance and coverage for a car breakdown. Other banks that are fairly cheap are Norwich & Peterborough building society and Metro Bank. It’s understandable that you may not want to switch banks just for a holiday or two. Research your options and you’ll be better off for it.

The last point, and perhaps one of the most important ones to remember, is that many cash machines abroad will ask if you want your transaction to be in pounds instead of in euros. Even in shops, the shopkeepers will ask you this. Always say no. If you say yes the bank or shop will apply its own exchange rate and that rate is guaranteed to be horrible.

Wherever you’re headed for your well-earned vacation, be informed and research before you exchange your money or use a credit or banking card in another country. You worked hard for your money, don’t let a currency exchange take a lot from it.

Category: Exchange & Remmitance