Pound Pummels Commodity Currencies

2 May, 2017

The kiwi and loonie are crumbling against the British pound. As U.S. President, Donald Trump, continues to threaten critical trade partnership agreements like NAFTA and the TPP, export economies with strong ties to the U.S. including Australia, New Zealand and Canada are paying the price.

GBP Kills Two Birds with One Stone

In recent weeks, the pound has been bolstered by strong data out of the U.K., but commodity currencies have taken a number of hits recently. The result? In the last six months, the Kiwi is down 9.5% against the GBP, and the AUD and CAD are both down over 7% in the same period. That means this could be the rate you’ve been waiting for, if you’re looking to trade your GBP for weaker currencies.

Euro Woes Ahead?

When it comes to the currency markets, the turbulent times are likely here to stay:

France will choose between two polarising candidates on 7th of May and the euro may feel it--especially if the far-right candidate Marine Le Pen succeeds.
Theresa May is seeking to consolidate conservative power by holding a general election on 8th of June, but E.U. leaders are taking a hard line on Brexit negotiations and have gone on record with concerns about London’s unreasonable expectations.
The German federal election is scheduled for 24th of September, and Merkel faces stiff opposition and rising discontent over Europe’s immigration crisis.

It’s clear that 2017 isn’t likely to get less volatile when it comes to foreign exchange markets. So what can you do to protect your money?

Here Are Our Top Tips For Risk Management:

Use a Forward Contract to lock in an exchange rate for up to twelve months. With a Forward Contract, you can transfer anytime between two days and one year from now at the rate you want.
Consider sending a series of smaller payments. If you need to make a sizeable transfer, but aren’t keen on locking in one exchange rate, you may want to consider making a series of smaller payments.
Use a Limit Order to set your target exchange rate. When that rate is reached, we call you to confirm your transfer, so you can get the rate you want even while you’re on holiday.

Speak to one of our customer service agents 24/7 to keep more control over your money.

IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.

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