How will the EU Referendum affect currency exchange – and your money?
An agreement was finally reached at the European Council Summit – we now know that the Referendum vote will take place on 23rd June.
Yet the uncertainty continues, as speculations grows about whether there will be a potential “Brexit”, i.e., the UK leaving the EU. This will clearly have dramatic economic and political effects, not least on currency markets and exchange rates, which mean it is a critical time to be planning your currency transfers and looking at ways to protect your overseas payments wherever possible.
Following responses to the decision from key politicians, including London Mayor, Boris Johnson, who are backing the UK leaving the EU, there are increasing concerns that popularity is growing for an “Out” vote – this, in turn, is having a noticeable effect on worldwide markets, and the currency markets in particular. This was clearly demonstrated by sterling’s significant drop against its major currency pairings, as the UK currency fell to a 12-month low against the euro and a seven-year low against the US dollar in the aftermath of the Referendum announcements. We believe that sterling may continue to struggle during uncertain times in the coming months, as markets try to gauge the outcome of the vote in June and how UK-EU relations may change as a result.
This continued uncertainty about the UK’s future in the EU is causing considerable market volatility, so it’s more important now than ever to stay on top of the markets and speak to a specialist to help you plan ahead to protect your money. Ask your trader about protecting your overseas transfers with a Forward Contract, a tool that lets you set the exchange rate at a time that suits your requirements, protecting the amount against future exchange rate fluctuations, which, as we have seen, are all too common in the current climate.
Contact Smart Currency Exchange today to get a quote or contact your personal trader for the latest rates and news to help you with your currency plans.