Sterling drops 2 cents over night against the dollar..

[Samaya]

Over the last 12-hours, (since 6.00 p.m. Wednesday) sterling dropped 2-cents from $1.566 to $1.543.

http://www.xe.com/currencycharts/?from=GBP&to=USD&view=1D

 

[flortlebap]

Blimey, you're on the ball!!

 

[wayneg]

Blimey, you're on the ball!!

Some of us watch the exchange rates and stock markets more than TV Checking the Dollar rate is definitley the most used app I have on my phone, not good reading last night.

 

[Pootle]

Some of us watch the exchange rates and stock markets more than TV ......

So true, so true

 

[disneyholic family]

and of course, with my impeccable timing, i bought my disney uk tickets when the sterling was at its highest in recent months...
and considering i actually pay in dollars when it hits my credit card, that was not a good thing....ah well...at least i have the tickets...

 

[flortlebap]

Maybe I should add currency checking to my obsession list...

OH wants to just take a small amount in cash and use our debit card the rest of the trip... It's mildly filling me with dread!!

 

[MichelinMan]

Just bought my currency today. I think the rate will drop further - the incoming head of the BOE supposedly wants to devalue Sterling to help exports and stimulate the economy. The forecast I've seen is a rate of 1.47 going forward, with some estimates down to 1.40.

 

[wayneg]

Just bought my currency today. I think the rate will drop further - the incoming head of the BOE supposedly wants to devalue Sterling to help exports and stimulate the economy. The forecast I've seen is a rate of 1.47 going forward, with some estimates down to 1.40.

Its not something anyone can forcast. If there was the slightest chance of the exchange rate dropping to these levels everyone would sell the £ ASAP. but they are not, infact its risen a little since yesterday. The Forex markets take into account all known data plus a few predictions, the level we are at is what they believe its worth, they will have taken into account the new head of the BOE.
Merv King tried his best to devalue the £, everytime he spoke the £ went down a little, then rose again, one man rarely has much influence unless its devastating news.
Could be wrong and your forcast correct though, no-one knows.

 

[wayneg]

Just bought my currency today. I think the rate will drop further - the incoming head of the BOE supposedly wants to devalue Sterling to help exports and stimulate the economy. The forecast I've seen is a rate of 1.47 going forward, with some estimates down to 1.40.

Getting closer. http://www.bbc.co.uk/news/business-23177463

 

[MichelinMan]

Hate to say 'I told you so' but.....

I really hope people got their currency early like I did.

The fall is all down to the new BoE head indicating that interest rates aren't going to rise for a long time. He did the same whilst back in Canada.

Personally, I can't understand why markets react so violently to one man's statements (especially when he has s*d all power to actually do anything meaningful to change exchange rates), but they do.

 

[Samaya]

Still staying just above $1.50 and like the BoE yesterday the ECB (European Central Bank) stated that they would be supporting the current low interest rates in Europe and for an extended period of time.

The Euro also suddenly dropped against the dollar on that news while the stock markets saw a significant rise.

Sterling-Dollar over last 24-hours.
http://www.xe.com/currencycharts/?from=GBP&to=USD&view=1D
Euro-Dollar over last 24-hours.
http://www.xe.com/currencycharts/?from=EUR&to=USD&view=1D

 

[Samaya]

Dropped again at 01.30 today to $1.489.

 

[wayneg]

Going back up today, now back to being better off using my credit card rather than jumping in and buying dollars. $1.51170 this morning, hopefully rise a little more before August

 

[xxpeplyxx]

Going back up today, now back to being better off using my credit card rather than jumping in and buying dollars. $1.51170 this morning, hopefully rise a little more before August

I'm with you on this one! Keeping my fingers and toes crossed!!

 

[rex008]

Hate to say 'I told you so' but.....

I really hope people got their currency early like I did.

The fall is all down to the new BoE head indicating that interest rates aren't going to rise for a long time. He did the same whilst back in Canada.

Personally, I can't understand why markets react so violently to one man's statements (especially when he has s*d all power to actually do anything meaningful to change exchange rates), but they do.

"Risk free" - ie government bond - interest rates are the biggest driver of future FX rates.

http://en.wikipedia.org/wiki/Interest_rate_parity

The maths looks scary, but it's really not - I can hold my currency here at UK rates and then change it in the future, or I can change it now and hold it in new country rates. If the end amounts are not the same, there is an arbitrage opportunity, which an efficient market will always correct. So if the market thinks the future rate is wrong because the assumed interest rate is wrong, the current rate will change.

All of which means that the man who has the most influence on future gilt interest rates also has the most influence on FX rates. And indeed everything else in the market where price has a time dependency.

Clear as mud, I know!

Personally, I always get my currency at pretty much the last minute - paper $ don't earn any interest, and there is a theft risk while they are sitting in a drawer.

 

[arieliwish]

Just to let you know I've just bought some dollars at 1.50 from Travelex, so it looks as though the rate is rising again.

 

[MrRomance]

The problem we have right now is that all major currencies are on a race to the bottom. They're all trying to devalue their currency to lower the costs on international trade.

In the grand scheme of things, there really won't be much of an impact on the amount of $'s you get on your holiday currency. I don't think there is much to lose by holding out or much to gain by buying early. As Wayne pointed out, paper $'s earn no interest and there is a risk of loss or damage while they're stored at home.

I don't see the rate going below $1.45 or above $1.55