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Posted August 24th, 2012 by Charles Purdy

Tracking the pound against key currencies

The feel-good factor of the Olympics and consequent injection into the UK economy from hosting the event have helped the pound remain strong against the euro during August, typically a quiet month in the financial markets when the nation heads off on holiday and businesses on the Continent grind to a halt. This should continue into September and after, as the Eurozone battles its debt crisis and concern about the economic stability of southern Mediterranean countries continues to undermine the single currency.

Anyone considering a transfer at the turn of the month should bear in mind that both the Bank of  England and European Central Bank have policy meetings on 6th September, so there could be some movement in the £/€ rate around then.

With the USA being less exposed to the Eurozone crisis than the UK and the dollar’s on-going safe haven status, the pound is not expected to make any serious gains against the dollar in the short-term.

The next Federal Open Market Committee (FOMC) Announcement is on 13th September when Fed chairman Bernanke could announce plans for a third round of quantitative easing, although he may offer an indication of the Fed’s plans prior to that at the annual banking conference in Jackson Hole on 31st August. Expect movement in the dollar’s value around both of these events. All the while market expectations of more monetary loosening in the USA are alive, the dollar’s strength will be limited.

During the last month, the pound has lost value against the commodity based currencies of the Australian, New Zealandand Canadian dollars.

See below to see how the pound has performed against key currencies over the past month:

$ AUS$ NZD$ CAN$
August 28 1.274 1.579 1.501 1.954 1.563
August 14 1.273 1.569 1.494 1.944 1.556
July 30 1.281 1.570 1.496 1.941 1.575

Based on interbank exchange rates

If you’re moving or buying property overseas, there are ways to minimise your exposure to currency fluctuations. To find out more, download our free guide entitled ‘Why overseas property buyers lose money… and how you can avoid it’ by clicking here or speak to the Smart Currency Exchange team today by calling 0808 163 0102.

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