How will the general election affect the cost of your future international payments?
Find out what are the ‘experts’ predicting…
Sterling has dropped nearly 8% against the US dollar since January.
The UK recovery is at best slow-moving whereas the US economy has enjoyed two consecutive quarters of positive growth significantly better than the UK’s.
Also, in the last few weeks, political concerns in the UK have taken hold– namely the possibility of a hung parliament.
On March 1st, sterling dropped 3% to a 9 month low against the US dollar as a Sunday Times opinion poll put the Conservative lead at 2% – lacking the required majority to avoid a coalition government.
This is an issue for the financial markets as a coalition is likely to lack the political willpower to push through the tough legislation required to clear the UK’s record budget deficit.
The investment bank Nomura are forecasting a 35% chance of a hung parliament and if that happens, many analysts are predicting a ‘sterling crisis’ as investors avoid the UK completely.
From recent market reaction, it seems that the best outcome for sterling would be a clear Conservative victory (60% probability according to Nomura). If this doesn’t happen, the pound is likely to suffer.
And a hung parliament is not the only problem…
Another major problem for sterling is the Bank of England’s program of “Quantitative Easing” (the pumping of money into the UK economy). At the moment it is on hold, but the door has been left open for further emergency measures should the economy need further stimulus.
The consequences of further money being injected into the economy are more than likely to be disastrous for sterling.
US dollar and Euro predictions
If this were to happen (which is not too unlikely given the mixed nature of the economic data released recently) analysts are predicting sterling exchange rates heading towards:
– US dollar $1.40/ £1
– Euro €1/£1 (called parity)
There is likely to be some serious movement in exchange rates over the next few weeks and the period up to the election will be critical for the pound. Whichever way the outlook goes over the next few weeks, expect sterling to see large movements.
Get in touch now to avoid unfavourable affects on your international payments (to or from the UK), as we can help put a strategy in place that minimises your exposure to the market movements. Smart Currency Exchange can supply excellent exchange rates for all popular currencies so ring today on 0207 898 0541 or visit http://www.smartcurrencyexchange.com/
Limited Time Offer: Place In the Sun Tickets for Free (£8 value)
Smart Currency is currently offering complimentary tickets to this months ‘Place in the Sun’ exhibition at Earls Court, London. Tickets are available for all Smart clients, so if you already have a Smart account, simply email the below address requesting tickets. If you’d like tickets, yet don’t have a Smart account, simply open an account today! As soon as we receive your request, we’ll send your tickets out in the post. Please note that we have a limited supply of free tickets – once they’re gone, they’re gone…so request them ASAP.
Dates: 26th, 27th and 28th of March (Fri, Sat, Sun)
Time: 10:00 – 17:00
Venue: Earls Court (London)
Children under 16 are free
For more information on the UK’s top overseas property exhibition, go to: http://aplaceinthesun.com/exhibition
To claim your tickets
Smart account holders – to request your tickets, please email the address below along with the amount of tickets needed (up to 4):
Non-Smart account holders – to become a Smart account holder please fill out our online form at: http://www.smartcurrencyexchange.com/applyOnline.aspx (in the comments box, please note that you’d like to take advantage of the free ‘Place in the Sun’ tickets. Let us know if you need 2 or 4 tickets).
Jargon Buster: Downside Risk
In layman’s terms: Downside risk is the risk of the exchange rate moving against you and causing your payment to cost more.
For example, there is a lot of downside risk at the moment, as the Bank of England has not discounted the possibility of pumping more money into the economy. There is currently a lot of downside risk for sterling as concerns grow over a hung parliament.
How Smart helped at an amazing Grand Charity Event!
On the 26th February 2010 Peace and Harmony Freemasonry Lodge of Paphos held a Grand Charity Event and raised almost 24,000 euros for “Help for Heroes”, http://www.helpforheroes.org.uk/ in the UK.
But first of all – what is the charity for? Well, “Help for Heroes” is all about our men and women of the Armed Forces who are injured in the course of their duties. All profits raised will be donated to the charity, which in turn will use these funds to transform the lives of wounded service personnel.
Smart are very proud to have been involved with the event.
Do you need a live quote or more information on just how much Smart Currency can save you? Call 0808 163 0102 or visit http://www.smartcurrencyexchange.com/ today!