Is euro weakness set to continue?

STERLING’S best exchange rate against the euro since November 2008 is good news for anyone in France with a UK pension or savings – but the rates are volatile so now is a good time to fix a good deal, currency experts say.

Exchange firms say they have seen a surge in demand from customers moving money to France or arranging future exchanges locked in at today’s rates. Elisabeth Dobson at World First said: “People should be hedging themselves if they are on a tight budget.

“If you’ve been doing some of your sums around these levels, book now. There is an element of volatility. The rate could continue to get better but it could also get worse.”

She said World First had seen a “massive increase” in people moving large sums to buy property since May. “People are returning to the market and being a bit more confident,” Ms Dobson added.
“Those who are in the market to buy are going for it now.”

HiFX analyst John Freeme said the rallying pound had come as a surprise. “If you’d asked anybody six months ago if you’d see these sorts of rates, more than likely the answer would have been no,” he said. “It looks unlikely that we’ll see the euro turn around in the short term,” he added. “Most forecasts out there are expecting e1.24 or e1.25 in the next three months.

“However if you look at long term forecasts coming out of some of the big institutions it seems unlikely you’re going to see a return to 1.4. The global economy doesn’t have the momentum for that recovery.”

MoneyCorp’s representative in Normandy and Brittany, Philippa Weitz, agrees that anyone thinking of moving a sum from the UK to France should consider fixing rates. “If you don’t need your money this week or this month, it is worth doing a forward purchase,” she added.