For businesses trading internationally, exchange money can pose many risk factors as a result of trading in a foreign currency, which may not be experienced when trading domestically. A business will generally generate revenue capital by borrowing or utilising their own equity to invest in assets, with the aim of generating a return on this investment. Often companies venture outside of their comfort zone and invest in products, services, property and assets abroad. There are often excellent international opportunities, particularly in emerging markets, when businesses exchange money and make overseas investments where they can see a quick and often more substantial return than they might enjoy in their native land. There are however increased risks with investing internationally.
In these types of business transactions, there are many reasons the transaction can pose a fiscal threat. For instance, risk can arise when a company has a committed cash flow to be received or paid out in a foreign currency. If the business sells its services or products linked to pre agreed credit terms, which might typically be anything from 30 – 120 days, it obviously experiences a delay in receiving payment (often quite a substantial delay). During this period of delay, the value of the foreign payment, once it is exchanged, could result in a loss for the company, if the exchange rate has shifted during the period of time the credit was granted. This is just one example of how a business can run the risk of generating less revenue than it forecast, or worse still make a loss. In part 2 of this article, Best Exchange Rates UK look at other risk factors surrounding international business exchanges.
Risks aren’t just restricted to foreign business transactions. Domestic business to business trading can still pose exchange money related risks, perhaps because the raw materials they use may be priced in a foreign currency or be sourced overseas and these prices fluctuate as a result of shifting foreign currency exchange rates. This could have a significant impact on the production cost of a product and therefore the margin made on sales, particularly if preferential rates have been pre-agreed or lengthy credit terms have been granted.

Since the introduction of the euro in 1999, the exchange rate for euro has seen a turbulent first thirteen years. In this article we will take a look back at the history of the euro and pick out some highlights in the history of the euro exchange rate.
Replacing the European Currency Unit (ECU) at midnight on the 1st of January 1999, the Euro was born and many were divided in their opinions as to how the young Euro would grow up – how it would fare, and what troubles it would encounter along the way. The task of printing and minting all the coins was a herculean task if ever one existed, and experts estimated that it would take a full three years: 7.4 billion notes and 38.2 billion coins were available for consumers and businesses on 1 January 2002, when the currency entered the public domain.
As midnight struck to usher in 2002, there were massive displays of celebration throughout countries in the Eurozone, which included a huge illuminated mock-up of a euro coin in front of the European Central Bank offices in Frankfurt. The transition played out incredibly smooth despite the forecasts of huge problems by some. From 2002, the exchange rate for euro improved dramatically after an initial slump that came before. The rate improved and peaked in 2004, and reached its best rate against the US dollar in 2008.
In the later months of 2008 disaster struck as the global financial crisis began – within nine years of life, the euro had entered its first official recession. The recession at first did not damage the euro as severely as many though that it would; some believed that the recession could ultimately lead to the breakup of the Eurozone.
As the world economy struggled as a whole, the exchange rate for euro was damaged as various countries fell into financial difficulties. Spain, Italy and Greece all struggled and put extra strain upon the Eurozone. The exchange rate for euro has been poorer when compared with the British pound as of late, meaning that many British citizens have been enjoying holidays in European countries, where they are now able to get better value for their money.

This article follows on from Gold And Foreign Money Exchange Reserves Fall as They Are Pressured by Lowering Gold Prices part one.
We continue our article on how gold and foreign money exchange reserves fell in January 2012, as a result of declining gold prices and from direct repercussions in gains to the dollar which had an impact on best exchange rates for US dollars. We discussed how much gold there is in the world – 140,000 tonnes, its value – so if you were to carry out a money exchange for all the gold in the world you would end up at a figure of $1.8 trillion! We discussed how far the worlds gold would go towards paying off national debt if it could and how the worlds gold wealth is split between governments of the world, the US being a major gold owner and private owners in the form of jewellery an bullion. Some more interesting facts about gold:
Around 90% of gold found above the ground has been mined since the 1848 California gold rush. The price of mining gold has gone down since this time as modern machinery has been developed to help with the extraction process.  Where it is known that gold exists it can be extracted, gold that has yet to be mined appears on mining companies books as ‘reserves’. It is estimated that underground gold reserves account for about 40% of that found above ground – around 50,000 tonnes and of this figure, South Africa holds 50%.
So who actually owns the worlds gold? About 25% is held in central bank vaults. The US holds the biggest share, followed by Germany.
The remaining which forms the bulk of the worlds gold reserves is held by private individuals, the biggest percentage is held in the form of jewellery and coins which accounts for a massive 70,000 tonnes which accounts for half of the worlds total reserve, and the rest is held in privately owned bullion, this accounts for around 20,000 tonnes. There are many high street shops and gold specialists nowadays that will happily value your gold and offer a good rate of money exchange. Often people are unaware of just how valuable gold is. For all of your best exchange rate needs including foreign currency exchange visit us at Best Exchange Rates UK.
Since the introduction of the euro as an accounting currency on the first day of 1999, the Euro exchange rate has (as expected with any currency) been in a perennial state of flux.  After a drop in value relative to other major currencies in the first year of the currency’s life, many Euro-skeptics felt that their opinions were vindicated.  However, theirs was a pre-emptive victory, proved to have been declared too soon when the value of the euro increased year upon year, eventually peaking on July 15th, 2008.  On this date, the euro exchange rate peaked against the USD at an impressive $1.5990.  For those that supported the Euro, their victory was to be short-lived as the world would soon see the dawn of the Global Financial Crisis – the most severe since the Great Depression of the 1930’s – which caused significant dips in stock markets all around the world.
As other currencies now slowly begin to recover from the economic slump they previously found themselves in, increasing doubt has been cast over the future of the euro as a currency.  With Greece’s Euro fate still uncertain, and many other problems still plaguing the currency, other currencies are now capable of benefiting from a better euro exchange rate.  Holiday makers from Britain that choose to visit countries in Europe for their holidays will now be able to get increasingly profitable exchange rates.  Approximately 5 per cent of the 36 million holidays that the British population take each year are to Greece and its surrounding islands.  Were Greece to leave the Euro currency, the transition period in which the currency is replaced would see the pound get a better exchange rate against the new currency.  As problems persist with the Euro, it would be safe to assume that the number of people going on holiday to European countries would increase.
It is of course worth considering that when a new currency is created, it is done so with the intention of lasting for centuries, and judging the future of the Euro based upon its very short history would be incredibly difficult to do.
Perhaps the recent decision of the Bulgarian government to suspend their plans to join the euro zone is indicative of further woes that may be awaiting the euro.  Europe’s poorest country deciding to opt out of the currency could certainly signal further troubles ahead for the euro exchange rate.
If the euro starts to collapse what will happen regarding getting the best exchange rate for euros, if everyone bails out of the euro, how will this affect the UK and the rest of the world? There is a whole host of debate surrounding the euro at the moment. Will it survive or will it decline into economic meltdown? Many believe the collapse of the euro could actually help the UK economy, maybe not in the short term but perhaps in the longer term.
The big problem area for the euro is Greece. If the Greek government cannot agree on how to honor its debt liabilities, it is unlikely to secure any more bailouts from its neighboring EU countries. Greece would then be unable to pay back loans secured against its national deficit and the country would go into default, resulting in expulsion from the euro currency. The knock on effect of this could also trigger other weak economies into meltdown, namely Ireland and Portugal, who are in a similar position to Greece. They could then be closely followed by other vulnerable economies like Spain and Italy, who are very much on the border line of economic collapse. Many believe the situation will be like a domino rally, with Greece being the first domino to fall in the potential collapse and disintegration of the euro, making getting the best exchange rate for euros an impossibility and a thing of the past.
So what would all of this mean for the UK and issues like getting the best exchange rate pound for euro. In the short term, Britain will certainly not be as badly effected as other EU countries like France and Germany, who Greece have borrowed very large sums from at very high interest rates – a direct result of the financial risk associated with lending to a weak economy.  Our UK banks are however still linked to Greece, through the sale of insurance and other guarantees on debt. It is highly unlikely that the UK would lend anymore money, however if it lost any money it has tied into the Greek economy, there will be a gaping hole in the UK banking system and therefore less money available for banks to lend. This could lead to another stunt in the UK’s growth and possibly to yet another credit crisis. In part 2, Best Exchange Rates UK reports further on the potential effects of the euro collapse and its effect on best exchange rate for euros.
The import and export market is what fuels foreign money exchange rates and in turn the global economy. The countries of the world have different skills and products available to them and this determines what goods and services they can export to the rest of the world and conversely what they need to import from other countries. At Best Exchange Rates UK we have looked at the biggest export countries in the world, which will help reveal some useful insights into how foreign money exchange rates and the world’s economy go hand in hand.
In first place as the world’s largest exporter, producing and exporting nearly $120 trillion worth of goods annually, is China. Among the main products produced are power generating and electrical equipment and machinery, apparel, iron and steel. The Chinese workforce is well known for being permissive – labour can be bought at a far lower rate than in many other countries, who often find it cheaper to produce and import items from China rather than on home turf – this can be a topic of heated debate.
In second place is Germany. Maybe one of the reasons for Germany’s robust economy is attributable to its huge annual exports, which total $1.12 trillion. Export forms the economic backbone of Germany and accounts for 1/3 of its total economic output. In fact mechanical engineering accounts for 20% of the total world market for mechanical engineering products.
The third largest exporter is the US, with an annual export revenue of $1.05 trillion, capital goods such as engines, boilers and factory components form the bulk of its production output.  The main strategic thrust behind Obama’s masterplan for America’s future is to increase exports. At an annual trade conference he told delegates that America would be significantly upping their game when it comes to the exportation of goods, ninety-five percent of the world’s customers and fastest growing markets are outside of US borders.
In 4th place is Japan, who exports $581 billion worth of goods annually. This East Asian country is well known for its expertise in the production of cars and car parts, computer accessories, industrial machinery and video equipment. Japan may not be the world’s number one exporter but it does have the worlds fastest growing export economy- watch this space!
It is easy to see the importance of import and export activity on a countries economic wellbeing. Foreign money exchange rates affect the feasibility of transacting internationally and buying in goods from other countries. If exchange rates are unfavourable, alternatives will be sought. For all of your foreign currency needs visit us at Best Exchange Rates UK.

If you’re going abroad, whatever your reason, you will likely need to exchange money to get your foreign currency. Best Exchange Rates UK have some tips to approaching currency and your trip in the right way to ensure your trip goes without a glitch, both before, during and after your holiday.

Work out how much money you might need for your trip. If you take too much you are inviting thieves and it will cost you double if you have to exchange money back to your own currency when you return. Taking to little can also be a problem, you never know what can happen and when you might need some cash. Try to strike a balance. Take a credit or debit card as back up.

  1. Big notes are a big no no. Many grocery stores and taxi companies will simply not have sufficient change and you will be searching round to get smaller denominations.
  2. Tipping is a fundamental part of most holidays; we tend to be quite stingy when tipping in the UK. InAmerica it is considered of the utmost disrespect to not tip a waiter or waitress. You would not be welcome back at the restaurant in question ever again if you did not tip. Check out tipping etiquette for your chosen destination.
  3. How many people do you hear, that went abroad and suddenly their bank card stopped working or their phone wouldn’t work because their card issuers or mobile phone contract suppliers suspected fraudulent activity. If this happened you could be stuck with no money and no communication method for sorting out the problem!
  4. Book your money exchange well in advance with Best Exchange UK. It will often benefit you to be early and organised, if you have weeks to go, we might be able to advise of a best time to exchange so that you get a the best exchange rate.

On your return to the UK, if you get home and realise that you have some foreign currency left over, you might to consider the following when your exchange money back. You could hang onto leftover small change – especially if there is a chance you may return to the destination in the future. For your best exchange rates in the UK visit us at Best Exchange Rates UK.

Best exchange rates UK know the British pound inside out; we have devised a short profile of some of the important facts about the currency.

The central bank of the UK is very practically called the Bank of England. Even though the United Kingdom is a member of the European Union, back in 1999 when the euro was born, the UK decided to keep its national sovereignty and announced it would not be joining the euro but keeping the pound sterling as its foreign currency (much to the pleasure of the great British public).  The British Pound is now the world’s fourth most traded currency on the forex market. It isn’t just British people and institutions in the UK that trade in pound sterling but many institutions and individuals outside of the UK use the currency to trade goods and services.

Best exchange rates UK have found that foreign exchanging from the euro to the great British pound, is the most common form of foreign exchange where the pound is concerned. This is closely followed by the US dollar, Australian dollar, the Indian Rupee and then the Canadian dollar.

Some other useful facts and figures about the pound:

  •  The symbol for the British pound is – £ (pound) / p (pence)
  • The Central Bank Rate is 0.5
  • The Top Conversion is euro to pound
  • Inflation is currently 4.8%

The pound has the following name variations – Pound Sterling is the official name, but it is also called sterling, quid, cash and sponds. Not having enough of it is commonly referred to as being skint!

Coin variations include – £1, £2, 1p, 2p, 5p, 10p, 20p, 50p
Banknotes currently in circulation include – £5, £10, £20, £50. There is a £100 note in existence but it is rarely used, maybe by the rich and famous!

Debit and credit cards are often more commonly used in modernBritainthan actual physical money.

The Central Bank is the Bank of England.

Best exchange rates UK are not just experts in the pound but all foreign currency exchange, look out for some of our profiles on other world currencies.

Exchange rate euros and the euro zone debt crisis have far reaching effects, way beyond the boundaries of the European Union. The 2008/ 2009 global meltdown has often been described as the result of corporate greed, misconduct and the failure of governments to exert control. Unfortunately we are looking at a far worse crisis than we were faced with back in 2008/2009; it is not just the collapse of banks and corporate institutions but the collapse of entire countries that are at stake.
If Greece waves goodbye to the eurozone, the European Central Bank would have to shoulder a huge loss and could even face insolvency. Greek debt stands at nearly 57 billion euros, debt write offs of this magnitude could be catastrophic for the euro currency.
The European Financial Stability Facility, the association set up to assist in fixing the European liquidity crunch, was sanctioned to access 440 billion Euros, 250 billion Euros of which was left once Ireland and Portugal were bailed out. The European Financial Stabilisation Mechanism was another programme set up to help overcome the euro debt crisis. This programme is dependent on money raised through the financial markets and assured by the European Commission by using the budget owned by the European Union as collateral. It has the power to raise an additional 60 billion. However with insignificant economic growth in the most developed European countries – France, Germany, Italy and Spain, who carry the majority of the guarantees – it seems impossible that this will ever become a realisation, particularly when we consider that Italy and Spain are in troubled times themselves. This will affect exchange rate euros in an unfavourable way.
In a situation like this it is the US Dollar that will appear as the safest currency. When the euro begins to decline, the US dollar is immediately strengthened; this in turn causes the Indian rupee to fall because of the dollars increasing strength and India’s dependence of the US marketplace.  The rupee has already reached record lows, so this could have a meteoric impact on the Indian economy. Find out more about how falling exchange rate euros are having a huge impact on the Indian economy in Part 2 of this article. Best Exchange Rates UK are continually monitoring world foreign currency patterns in order to help predict what will happen to exchange rates, so that we can be sure to give our clients the most accurate and up to date advice when exchanging money.
The Exchange rate euro is still in a volatile position; however European banks announced they are selling off $30bn worth of property loans in May 2012. The property loans are likely to transact at significant discounts which could prove to be a fantastic investment opportunity for both Continental property credit funds and independent investors. The opportunity counteracts poor exchange rate euro and opens the door for those wanting to invest in overseas property, particularly in emerging markets.
There have been a number of European banks retreating from markets or moving to domestic loaning over the past few months, these include Euro Hypo, Societe Generale, DG Hyp, Yorkshire bank and Clydesdale.
DTZ Investment Management, a top investment research company, suggests Italy, Germany, UK and Spain will be the main centres for sales. DTZ also predict a gradual increase in discounts as banks try to relieve non-prime stock. Santander was recently rumoured to have sold property loans to Morgan Stanley at a large discount of 60%.
All of this is happening amidst a rather gloomy outlook for Europe and exchange rates euro.  Europe needs in excess of $1trillion of refinancing over the course of the next four years.
Met Life are one of the many non banking institutions that have entered Europe’s market and  US insurers New York Life and Mass Mutual are also believed to be considering the move.
Even with lending from corporations outside of the banking arena, alongside hedge funds, this will not be anywhere near enough to fill the  vacuum left by Europe’s major banks. The anticipated funding gap in Europe is expected to more than double in the next two years – from $107 billion to $215 billion.
This situation will mainly be a result of the additional capital requirements by the European Banking Authority on 65 of Europe’s banks, having a larger effect than the recent $1trillion cheap loan program by Frankfurt’s European Central Bank. The EBA stipulates that 65 banks have to reserve 9% of capital, in line with the International Monetary Fund’s view that banks should cut back loan books by 6% to 10% by 2013. Europe will be accountable for around  85% of the $216 billion global funding gap over the next two years. This will be politically led by the UK, who will be responsible for around $35 billion and Spain, who will be responsible for $26 billion.
Best Exchange Rates UK regularly report on the money exchange market and exchange rate euro and how the financial markets can impact on opportunities for investment within Europe and the rest of the world, call us today for free impartial advice.