Five Questions About: Foreign currency

 

What's happening with the exchange rate?

Sterling is getting stronger. In fact, in the past 12 months, the pound has climbed 8.6 per cent against the euro. This week it hovered higher than the €1.20 mark, its highest rate since November 2008.

So what's prompted the latest leap?

You may have noticed the financial and economic problems experienced in the eurozone during the last few years. With Greece on the threshold of collapse for months, last weekend's elections in that country – as well as presidential elections in France – have sent the euro into fresh turmoil.

Should I rush out and buy my holiday money now?

That depends on when you're going away and what you think will happen to the exchange rate before then. It will also depend on where you're going – if it's the States, for instance, the pound has actually weakened against the US dollar and is worth 1.2 per cent less than it was a year ago.

I'm Europe-bound in the summer. Shall I buy a fistful of euros now?

It's a tempting thought with the exchange rate so positive right now. But the risk is that the rate will get better. However, some experts predict that once this week's turmoil settles down, the euro will begin to strengthen again.

Can't you give a definitive answer?

No. It could go either way in the future. If you have savings available and are happy with the rate you can get on currency now then go ahead and buy it. But make sure you buy online – not the high street – for the best rates.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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