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British pound pummels commodity currencies

Nicole Mondville
EU leaders are taking a hard line on Brexit negotiations. (Source: OFX)

The kiwi and loonie are crumbling against the British pound. As US 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.

In recent weeks, the pound has been bolstered by strong data out of the UK, but commodity currencies have taken a number of hits recently. The result? In the last six months, the Kiwi is down 9.5 per cent against the GBP, and the AUD and CAD are both down over 7 per cent 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 7 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 8 June, but EU 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 24 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

  1. 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.
  2. 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.
  3. 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.
  4. Speak to one of our customer service agents 24/7 to keep more control over your money.

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