Expat Cairo’s head trader gives his insight on this week’s major currency movement.
The GBP/USD rate has been on a downtrend since hitting the giddy heights of over 1.56 a few weeks ago. Yesterday marked new territory for the pair with a level of 1.5099 being hit in the London session. There has been a bounce however this morning as BOE credit conditions improved in Q2 and Market Services PMI (Jun) rose against a general consensus, giving Sterling a good boost from some surprisingly upbeat figures.
Do I expect us to push back up short term to 1.55? Simply put, no. As the USD has strengthened against 23 out of 24 currencies lately I’d expect us to push lower with a level of 1.50 coming into play at some point over July.
So what for our old friend and foe EUR/USD? It’s still the ugly parade unfortunately. Who is the best of a bad bunch? At the moment USD is coming out on top as EUR/USD is under the key level of 1.30. Should we remain under this level for any length of time we’ll see bearishness intensify. With softer than expected number from the Euro zone earlier today disappointing the market coupled with recent events in Portugal and Greece I expect EUR/USD to target and break 1.29 in July. Do I see any fundamental reason why the EUR shouldn’t be lower? No. Will the assorted Government officials/politicians and ‘experts’ talk the EUR up again? I’d say there’s a strong possibility
The main things to look out for this week are the US jobs report (known as Non-Farm Payrolls) due out on Friday. These reports are likely to give us a clearer direction on GBP/USD and EUR/USD over the course of July.
What does all this mean for you?
Do you get paid in USD? If you get paid in USD and exchange into GBP or EUR then you’re in a healthier position to convert back to your ‘base’ currency this month. With the recent USD strength coupled with the weakness of the pound and EUR you will be around 1-2% better off exchanging now than you would have been last month. Over the course of a year this can be quite substantial as alluded to earlier.
If you have any questions whatsoever please contact the email address below and one of our traders will be happy to come straight back to you with an answer.
The majority of Expats go through their banks when they need to make foreign payments due to convenience.
Banks will often charge anywhere between 2.5% – 3% off the interbank (live) rate for exchanging one currency into another. Add charges on top to make an international payment and suddenly moving your money becomes extremely expensive.
However, there is a choice! Banks are not the only provider of exchange rates and as an FCA authorised institution with 8 years of experience in dealing with contractors we can guarantee to save you money each and every month.
Aston Currency Management will offer expats that work through Brunel a special, fixed rate of exchange of around 0.8% off interbank. This will equate to an average saving of 1.7% to 2.2% on every transaction you make. Over the course of a year for an average contractor, this can add up to in the region of $3000.
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