Foreign Exchange Trends

No one could have predicted the political turbulence which occurred in the second half of 2016. The impact on the foreign exchange (FX) markets was marked; the Pound Sterling (GBP) went from a six month high the day before the Brexit referendum to a 30-year low within a week. The US election result meanwhile has strengthened the US dollar (USD) beyond what many had predicted and further, uncertainty is rife in the Eurozone with fears regarding the upcoming French election result and a potential ‘Frexit’.

With a weak pound, investing within the UK as a foreign national with a foreign-currency income is becoming increasingly popular, particularly with regards to property. As the triggering of article 50 draws closer, the GBP could fall further; low interest rates added to the already weak pound sterling makes for an attractive investment to foreign nationals, buying at cheap rates now as a longer term investment.

Yet, whilst the Euro has performed comparatively well against GBP of late, political risk in France is not being underestimated after the unexpected advent of Brexit and the election of President Trump, some analysts predict the Euro may weaken over the coming year. Added to this Germany goes to the polls in September; with two-thirds of Germans wanting Angela Merkel out of office, the uncertainty surrounding the Euro could grow even further later in the year.

The USD does, however, appear to be weathering the political storm better than the Euro or GBP, having been significantly strengthened by the end of the Federal Reserve’s expansive monetary policy, a weakened euro and economic optimism behind Donald Trump.

With the unpredictable FX markets, it is important that you have the ability to be able to exchange currencies quickly and cheaply as deals may depend on the swiftness of your ability to access different currencies.

At Enness we have an exclusive partnership with Argentex. Argentex offers significantly better rates than the banks and other small retail FX brokers and provides a tailored advisory and execution service to its international client base. Furthermore, our expert brokers’ relationships with Argentex means we are able to help guide and facilitate the most attractive rates to suit your purpose.