Down, down, down with the pound!
Sterling looks very much set to become cheaper in the next six months, if the new governor of the Bank of England, Mark Carney, gets his way. Mr. Carney wants to inject billions in economic stimulus (called quantitative easing) into the UK economy, to spur growth. If he does so, the pound will tumble, because all those billions devalue the currency.
Sterling is already at a 3-year low against the US dollar at 1.48 in anticipation of this stimulus. Furthermore, the euro could soon reach its highest against the pound since November 2011, at 0.88, on the same cause.
Of course, what this means for you is that when you exchange currencies, you'll get a higher pound total. Your money will go further, so that you're able to go out more, do more things, and see more of the UK.
3 tips to get the best pound exchange rate
Of course, just because sterling is tipped to fall, you'll still need to know how to make the most of the exchange rate. Here are three tips to help you do so:
1. Don't expect the pound to fall and fall forever.
If you plan to buy pounds, you might have an exchange rate in mind that for you would be perfect. However, unless this exchange rate is realistic, you might be waiting for that "perfect" exchange rate a very long time. In other words, just because the pound is falling, doesn't mean it will fall forever! Instead, to find out what exchange rate you can realistically expect, talk to a foreign exchange broker for some advice.
2. Keep an eye out for fees and commission when you exchange currencies.
When you exchange currencies, the last thing you want is to fork out for fees and commission. For instance, if you use a bank to transfer your money to the UK, you could pay up to $40 a transfer. So instead then, shop around, and find a service that won't charge you extra to buy your pounds. Use a foreign exchange broker, for example, and you won't pay extra for your transfer.
3. Deal with someone you like and trust!
If you're studying abroad in the UK, chances are you'll be moving a good deal of money. Given that, it's vital that you deal with a money transfer service that you like and trust. So before you transfer your money, get an idea of whether you feel comfortable using the service you're thinking of. If you don't like it, it could be worth trying elsewhere.
Peter Lavelle is a currency dealer at foreign exchange broker Pure FX.To learn more about getting the best exchange rate when you study abroad in the UK, email him at [email protected]. He'd be happy to give you his expert advice.