Strong pound encourages Brits to snap up foreign currency in April
Last Wednesday saw the Pound rose to a 22-month high against the Euro.The Pound’s renewed purchasing power has led to a surge in interest from Britons who are looking to buy holiday money, to purchase property abroad or send money to loved ones overseas, says foreign exchange specialists, Moneycorp.
The Euro, which is by far the most popular currency, was in huge demand. Moneycorp completed 67 per cent more Euro purchases for its customers in April, than it did during the same month last year. The total value traded was also up 50 per cent year-on-year.
Moneycorp senior broker, Alex Lawson, said: “After a prolonged period of relative weakness, the Pound is on the up. But note that this has less to do with the strength of the British economy – which is officially back in recession – than the market’s lingering doubts about the Euro.
“After being on the back foot for so long, people are thinking that now is a good time to buy. Whether they’re looking to buy a property in Provence or some spending money for a summer holiday in Spain, many are being tempted to get in while the going is good.
“Our view is that while this urgency is understandable after a prolonged period of Sterling weakness, there could be an even better time to exchange further down the line. The eurozone is still looking extremely fragile and the Euro could easily fall further.
“Many of these transfer transactions, where clients are buying fairly large sums of foreign currency and sending it abroad, are very rate sensitive. A small change to the exchange rate can make a big difference to the amount of money which comes out at the other end.
“For larger transactions, we continue to recommend people make the most of the full range of hedging strategies that can protect them against any sudden movements in the euro/pound rate. The markets are extremely volatile and while the momentum is with Sterling right now, anything could happen.”