The Euro has gained favour over the course of the week, partly on improving Eurozone economic conditions but also by default as the US dollar declined to an 11 month low against a basket of currencies.

The US Federal Reserve left rates steady at 0.25% - 0.50% with the wording of its policy statement suggesting that it is now more relaxed than a few months ago about the state of the global economy. With the American economy clearly slowing down, prospects for a Federal Reserve interest rate hike in the near term have weakened.

Figures from the latest United Nations migration report* indicate that more than 5million people born in the UK have emigrated overseas.

Many of them will need to send money back to the UK from abroad. They may be paying school or university fees, supporting a mortgage on their British home or selling a property overseas and need to repatriate the funds. Some may be returning home after working or retiring overseas.
Whatever the reason for sending money back to Britain, you will need to exchange your foreign currency for sterling. And to make sure as much money as possible comes back home, it’s important to get a highly competitive exchange rate.

Since joining the European Economic Community in January 1973, which later became the European Union (EU), the UK has had an uneasy relationship with the project.

Its commitment has been tested several times over the years. More recently, the marriage has hit the rocks and may be about to break down completely.

Residency from A to Z - Eurofinesco explores the concept of Residency, and how it touches the lives of residents in Portugal.

CLICK HERE to read.

A change of fortunes this week with the British pound gaining ground against the single currency as the week progressed.

Bank of England Governor Mark Carney was keen to share his view on the UK’s current position and future prospects during his Economic Affairs Committee speech. He made strong reference to the negative economic implications should the outcome of the UK’s EU referendum vote be Brexit.
Carney indicated that the Bank of England still has room for conventional monetary measures, which may be called upon should UK economic conditions flounder after a Brexit outcome, although there is no appetite at all to dip into negative rates territory within the Bank of England’s Monetary Policy Committee. So the message is clear, interest rates in the UK could be tweaked below the current 0.5% level. No doubt opinion poll releases in the run up to the poll date of the 23rd of June will hold sway for sterling.

The European single currency started the week well against both the US dollar and the British pound, although the recent high’s soon gave way to profit taking and a rather strong reversal certainly against sterling.

Monday saw the pound trade at its lowest level against the Euro since June 2014 at €1.2350 as concerns that the UK economy is slowing and will continue to do so until the outcome of the UK EU referendum vote is known.

June 23rd seems like a long way away, however with the opinion polls now suggesting the leave vs remain in campaigns are now on equal footing, the uncertainty has left Sterling with few friends.

The euro continues to trade higher against both the US dollar and the British pound, despite the obvious weakness of the Eurozone economy and the very accommodative nature of the European Central Bank’s ongoing stimulus measures, which are in distinct contrast to the action of the Bank of England and the US Federal Reserve.

US interest rates will no doubt rise again at some point this year as qualified by this week’s release of the most recent FOMC minutes. The Federal Open market Committee did discuss the possibility of raising US interest rates again in April, however for the moment, with contradictory feeling running high amongst the USA Federal Reserve voting members, it seems that FED chairwoman Janet Yellen’s recent rhetoric has reaffirmed that US policy will see rates tweaked just two more time this year at most, rather than four times that were partially accounted for by the markets. Diverging interest rate policy should over time offer good reason to favour the US dollar over the Euro, but for now this is not necessarily the case.

The European single currency has maintained its recent strong tone having gained further ground against both the US dollar and British pound over the last week.

Weak European inflation currently running at -0.1 during the month of March was ignored by the markets, possibly due to the fact that it was marginally higher than the previous month. Certain aspects of Eurozone inflation are now beginning to rise, although still miles away from where the ECB would like inflation to be.