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ANY QUESTIONS?: CURRENCY


AUSSIE DOLLAR AT 27-YEAR HIGH


EASING THE PAIN DOWN UNDER


We emigrated to Australia at the end of 2008, however we are now looking to sell up and return to the UK due to living costs being much higher than expected. This is partly due to the exchange rate dropping so much, which in turn means our pension income is much less than anticipated. We used a currency broker when we moved, but can UK brokers help us to get better rates bringing money back? We need to convert a total of around $450,000


Baxter Horton, Brisbane


Australia remains a top destination for Brits emigrating overseas, but you are certainly not alone in noticing how much less your pound is now worth Down Under. Many of our clients have been returning to the UK in the last year, but the good news is that AUD/GBP exchange rates are at record highs. When you purchased you were fortunate in that exchange rates


were very high, around $2.55 to the pound. In the last few years the rate has dropped by over 40 per cent to the lowest in 27 years, which of course will have seriously affected your pension income. The reason for the decline is the fact the Aussie dollar is a very strong currency. They have largely avoided recession while the rest of the world suffered contraction. Interest rates remain high relative to other countries, and most of their exports are to China, which is also enjoying good growth. The net effect is a very strong currency which is more expensive to buy. Currency brokers can indeed


assist with conversion of your Australian dollars to sterling, and at rates signifi cantly better than the banks can offer. Due to the decline in the


rate and the strengthening of the Australian currency, this also means it’s the best time in over 27 years to covert your funds back into pounds. In fact, converting your $450k at today’s rates compared to when you purchased your property nets you a staggering £127,000 more than you started with, purely due to exchange rate movements. It would seem every cloud does indeed have a silver lining! Even if it is some time until you need to convert your funds, a good


broker can help you fi x the current rate for up to two years into the future, allowing you to take advantage of the best rates of exchange in nearly three decades.


To fi nd out more about the exchange rates available from the Foremost Currency Group, call 01442 892066 and quote Ref APITSAJA


64 aplaceinthesun.com


This month currency expert Alastair Archbold of Foremost Currency Group offers expert advice on Euro and Australian money exchange dilemmas


GREEK BAILOUT AND UK QUANTITATIVE EASING; WHAT’S NEXT FOR GBP/EUR EXCHANGE RATES?


In mid-February the Bank of England pumped a further £50 billion pounds into the economy with their Quantitative Easing programme, in an effort to avoid a double dip recession. This had the effect of fl ooding the market with pounds, weakening the currency and pulling sterling’s buying power down along with GBP exchange rates. The pound/euro rate had recently been at an 18 month high, but the QE programme and signs of progress in Greece have pulled rates back down. At the time of writing, an agreement had just been reached


between EU leaders to provide new bailout funds to Greece in return for implementing new austerity measures. However no sooner had the headlines been printed, than Eurozone leaders demanded fresh conditions, plunging the hopes of a resolution to the crisis into doubt. As the farce continues with no real progress being made since


Christmas, the fact remains that European economies remain a million miles away from the kind of convergence that is necessary for effective monetary union. Indeed it seems economically disastrous the way in which there is seemingly nobody in charge. The latest data out of Greece shows an economy in a state of almost total collapse, a death spiral of plunging output, multiplying bankruptcy and calamitous capital fl ight, which has in recent months weakened the euro. It can’t go on forever, and despite the inability of the Eurozone to


agree a way forwards, sooner or later market forces will demand a robust plan that everyone agrees to. When this happens, the euro is likely to regain its strength and become more expensive to buy. In the meantime, while political wrangling and economic protectionism continues, buying levels remain near an 18 month high for those needing euros to purchase abroad. It’s unlikely to last forever, so to fi nd out how to protect yourself against adverse market movements and make sure you get the best exchange rate you can, speak to Foremost Currency today to discuss your requirements.


GBP/Euro over 3 months


1.2150 1.2100 1.2050 1.2000 1.1950 1.1900 1.1850


16/01/2012 24/01/2012 01/02/2012 08/02/2012


CURRENCY


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