Best Exchange Rates UK reports on how gold and foreign money exchange reserves fell in January 2012, as 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.

It is the second monthly negative hit in reserves and highlights the difficulty faced by the Reserve Bank at a time when the global economy is at an all time low. It also brings to light how small declines in the reserve currency and indeed gold prices, can account for such huge craters in the world economy.

Ever wondered just how much gold there is in the world? The answer is somewhere between 120,000 and 140,000 tonnes – this obviously does not include gold yet to be discovered. If we were to divide this up so that everybody in the world had an equal amount, this would equate to around 22-24 grams per person, so about 1.1-1.3 cubic centimetres, with a worth of around 300 US dollars, so nothing to get too over excited about.

The value of the whole lot is about $1.8 trillion! If you multiplied its value by about 3, you might be getting close to paying off the US government’s sovereign debt.

To put the worlds gold reserves into perspective and to understand its importance to the world economy and money exchange reserves – you might want to digest the following facts and figures. The world’s gold is worth about one fifteenth of that of international bond markets (that are valued at approximately $26 trillion). Bonds are composed of around two thirds western government debt and the worlds gold supply would pay about 8% of the international bond markets overall debt. If only it were that easy! These figures are based on gold at its current valuation, which goes up and down every day in the same way money exchange rates do. 75% of the gold in the world is not available to governments even if it could be used to pay off sovereign debts. Much of the gold wealth in the world is privately owned wealth in the form jewellery, coins and gold bullion and about 25% is held by central bank gold reserves. Gold is most certainly a sound investment. Look out for more interesting gold facts in part 2 of this article.

Exchange rate euros continue to suffer, if it’s not Greece, its Spain causing the euro increasingly difficult survival issues. Millions of Spanish families and British ex-patriots are left battling for financial stability as demands are made for the country to leave the euro and return to their native Spanish currency – the peseta. Some towns are taking matters into their own hands and ignoring government warnings by returning to their former foreign currency.

Spanish inflation is out of control, unemployment is the lowest it has been since the civil war and millions fear the situation will only worsen. Spanish borrowing recorded in mid March 2012 demonstrated an all time high of nearly £270billion – exchange rate euros are taking a huge hit as a result.

Since 2001 when the euro was first introduced and exchange rate euros were at an all time high, essential household goods like washing products, bread and milk have increased by a staggering 43 per cent – this is simply unsustainable for the Spanish people.  Milk has nearly doubled in price and bread has more than doubled. Potatoes have increased by an unbelievable 115 %, making the average family struggle to produce even the most basic meal.

Dining out has increased by 40% which has had a profound effect on Spain’s most lucrative industry – Tourism. The feeling is that the only way to lure holiday makers back is to re-introduce the peseta, which would offer far more favourable foreign exchange rates than the euro. Villamayor de Santiago, a small Spanish town with over a third of its 10,000 population unemployed, reverted back to using the peseta in February 2012. Four other towns have since adopted the same approach.

Just shy of a quarter of all Spanish are currently out of work, half of which are surprisingly the under 25’s, who are leaving the country in search of an improved lifestyle. If and when the economy picks up, this could leave a shortage of young workers, who will be desperately needed to support a re-emerging economy back to health.

If Spain was to leave the eurozone, it is not know exactly how this will affect exchange rate euros but it would likely have a negative impact that would take some time to recover. Best Exchange Rates UK will be reporting on Spain’s position with regard to euro exchange rates as and when they happen, make sure you look out for future articles.

 

It’s April 2012 and the pound is strong – as we approach the 2012 Olympics, getting the best exchange rate for euros could become increasingly difficult as the UK’s economy is predicted to flourish and the pound strengthen against both the euro and other important foreign currencies. Some however believe that this Olympic related economic boost could end up being a false economy. Ever since London secured its Olympic bid back in 2005, it has been debated by economic experts worldwide how this might impact on the UK’s economy. When the bid was won, the UK economy was flourishing; however the 2008 global downturn meant a potential boost like that of the 2012 Olympics was much needed.

There is no doubt the UK economy has been given a boost in the years leading up to the world’s most prestigious and influential sporting event. House prices in the surrounding areas have increased, as has employment – nearly 40,000 jobs have been created as a result of the 2012 Olympics. Construction jobs, shopping centres, food halls, housing, the list is endless. Many tourists have already begun to visit the Olympic village from Europe and all over the world and will have been hoping for the best exchange rate for euros before the games actually begin.

As we approach the event, there has been much speculation as to how the Olympics will affect the UK’s economy both long and short term, particularly whilst we are in the midst of a eurozone crisis. Will European visitors be deterred by potentially unfavorable euro exchange rates?

Either way our economy is set to enjoy one of the biggest tourism injections it will likely ever see again – billions of pounds will be pumped into our economy as tens of millions of visitors and participants flock to our country this summer.

The longer term impact will be how the amenities and facilities are utilized after the Games. There is talk of plans to develop 3,600 new apartments for the local community. This area ofLondonis currently quite run down and under developed, so this may well have a positive impact on inward investment and new business set up. Whether the 2012 Olympics will be enough to lift the economy long term is unknown but a short term boost has got to be worth something.

Best Exchange Rates UK are the best option for visitors wishing to get the best exchange rates leading up to the 2012 Olympics. Give one of our experts a call today to understand potential facts that may influence the strength of future rates against the pound, to make sure you get the best foreign exchange rates.

Foreign exchange costs could rise dramatically for EU companies with the introduction of a new financial transaction taxation, which could increase the costs for foreign currency exchange transaction by up to 18 times. This tax which has been proposed by the European Commission could add tax of 0.1% on derivatives, equity and bond transaction beginning in 2014, which will generate an estimated €57 billion every year.

This has caused uproar among many London based companies and institutions as the new tax could pose a very serious threat to the City’s future. It will dramatically increase the cost of foreign exchange transactions with Europe, affecting the most liquid and traded products, pension funds, insurance companies and major corporates will be those most badly hit.  What will end up happening is that these taxes will be passed on to their end-users.

While spot foreign exchange would not be affected, forex forwards will and this could directly increase the cost of transactions by up to seven times. To provide an example, the cost of a euro/dollar swap with a value of €25 million, would be subject to a tax rate of 0.01%. The current transaction cost for the end-user is €279, but when the new proposed tax is factored in, it could add €2,500 to the cost, which would be levied on both dealer and financial institution.

It is believed that if the new tax goes ahead, businesses will be driven out of the EU to more favorable jurisdictions. It is estimated that around 70% would be forced to migrate which could be anything from mobile phone companies to banks.

This foreign exchange tax would in effect penalise businesses trading with Europe, the combination of indirect and direct costs taking place as a result of a reduced liquidity in the market and wider bid-ask spreads, would mean that raising €1 in tax would likely cost users more than the amount of the tax itself.  Europe could once again be shooting itself in the foot.

Best exchange rates UK keep a close eye on business foreign exchange matters; look out for all the latest news as and when it happens.

Lately, there has been confusion over the state of the euro, due to the current financial crisis in Greece. As the country is in heavy debt and in need of a bail out, all the countries tied to the euro are in danger from the collapse as well. These countries include Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. Andorra, Kosovo, Montenegro and many islands of the euro nations also use the euro as the common currency.

The exchange rate euro would be affected for all listed countries if Greece were to leave the currency. Certain political figures do not support the financial bailout of Greece, and favour taking on a new currency as an alternative. After years of tradition a new currency would be difficult to adopt, as constructing, producing and distributing such a high amount of cash is both time consuming and costly.

Instead, Greece would most likely refer back to when the currency used was called drachma, before the switch to the euro. The new currency would be introduced officially over a holiday, with an interim phase between the two currencies. Aside from this, the country would have to put on other limits to ensure that the introduction runs smoothly and is put in place efficiently. Citizens would not be able to draw out as much of the new currency at first, because that would jeopardize the amount of drachma available.

In a recent political election, however, those that were voted in as new political figures are supporters of the bail out and supporters of staying with the euro. The exchange rate euro will not be affected as greatly with the continued membership of Greece. The rate for the euro at the time of writing was at 0.8  compared to pounds. The exchange rate fluctuates constantly, so it is important to check it often.

More information on the euro and other currencies can be found at Best Exchange Rates UK. The site includes an array of features including business currency exchange, private currency exchange, and exchange rates for various currencies used globally. Best Exchange Rates UK includes specialists and other relevant information relating to currency.

Following on from the previous article; here are some more useful questions and answers surrounding euro exchange rates and the best way to manage holiday finances during this period of instability within Europe.

Q. How do I go about getting the best rate?

A. Come to Best Exchange Rates UK, we offer the most competitive rates around and we also offer impartial advice on when to exchange to get the most out of your money – this is obviously a hugely important factor.

Q. How big a journey has the pound really been on?

A. 2008 was the last time anybody could even hope to clear €1.23 for their pound. This was when the pound was halfway down its freefall towards parity – when one pound equalled one euro! Recently sterling has begun to flourish against the euro; markets have reacted to the leftward swing in France and the political uncertainty in Greece. Which have all contributed to the resurrection of sterling and euro exchange rates.

Q. Is it best to grab the euro now whilst rates are good or is something better on the horizon?

A. The pound has been appreciating against the euro over the course of the last few months, by as much as €1.30 at its peak. The longer the euro debt crisis continues the more positive the outlook for euro exchange rates in favour of the pound. A whole host of political and economic international events could swing this situation ether way. The most sensible way to tackle exchanging your foreign currency would be to buy half now and wait until nearer the time to exchange the other half. Travel companies adopt this practise – it’s called partial hedging.

Q. Will strengthened sterling mean my holiday will effectively be cheaper?

A. When it comes to your day to day spending i.e. food and drink, yes it will cost you less, as you have exchanged at a favourable rate. However your holiday itself won’t cost any less because you have paid for it through UK tour operators. Tour operators have the right to surcharge travellers if sterling falls, but unfortunately this does not work the other way round. Any profit made by travel companies as result of them hedging currencies when booking holidays will be kept for them, as with any corporate entity.

Have a look at our real time euro exchange rates online, or call us for a chat about your foreign currency needs.

 

It’s a tempestuous time for the euro exchange rate. There is still no conclusion to the Greek elections and France has a new President – uncertain times lie ahead. One good thing for British holiday makers is that the best exchange rate pound for euros has strengthened, great news for the summer, provided of course it stays that way.

Here are some useful questions and answers on the best way to manage holiday finances during this period of instability within Europe.

Q. I’m slightly nervous about the situation in Greece, I booked my Greek holiday last year and always take an amount of euros and my credit card. What if Greece withdraws from the euro either before I go or when I’m there?

A. If you were to buy euros now you would get the best exchange rate since 2008 (however it could still improve in favour of the pound). There are two precautionary steps you should take as a result of the uncertainty.

It would be a good idea to add an additional €100 or so to your holiday spending allowance. Often people take a debit or credit card for emergencies, however if Greece was suddenly to leave the euro while you’re holidaying, electronic banking would likely be frozen for up to a week, maybe even more, so you could end up stuck!

Also it would be a good idea to make sure you exchange €5, €10 and €20 euro notes because if Greece does suddenly leave the euro when you are out there, the interim currency would be the euro with an overprinted delta symbol (standing for drachma). The Greek euro exchange rate value would likely fall by as much as 40 per cent. Tourists would be required to pay in euros but would be given change in the new currency. So for example, if you paid for a meal in euros and it cost €15, you paid with a €50 note, and you receive change in Greek currency, you would only get €20 change – this is why carrying low denomination notes can not only be handy but could save you a small fortune.

Q. What about if Greece leaves the euro before my trip but I have already pre-bought my euros?

A. The euro itself remains a strong currency and competitive money exchanges will be all over the place in Greece, for you to exchange your euros to the new Greek currency – just make sure you do it in small and modest amounts as it won’t be worth anything when you exchange it back.

Q. How will the situation affect Portugal/Spain/Italy/Cyprus?

A. To be on the safe side treat these countries with the same precautionary measures that you would treat Greece. For the best rates – Best Exchange Rates UK will ensure you get the most out of your money when it comes to visiting Europe.

Exchange rate for euro may not be at its best given the current euro debt crisis but this does not mean that there aren’t opportunities for investment within Europe, times of crisis often open doors. At the moment, two European countries with promise are Poland andTurkey, who look set to benefit from a major European logistics boom.

European industrial property, in particular logistics property is set to undergo a major boom within the next decade. Planned infrastructure development projects within the EU, mean that Poland and Turkeywill benefit the most. Turkeyis already thriving from tourism at the moment as a result of poor exchange rate euros, meaning travellers are avoiding Europe in favour of destinations like Turkey, where good money exchange rates can be enjoyed. All of these factors are making Turkey an excellent property investment prospect. Property prices are currently relatively low but as Turkey’s economic climate continues to flourish, these prices are likely to soar over coming years and this could represent a flight to safety for investors.

New infrastructure and supply chains across Europe will be heavily influenced by economic growth. In particular Poland is destined to become a major player; it has the advantage of having recently benefited from new infrastructure, manufacturing investment and consumer demand growth.

Istanbul is already a part of the European rail network, and has an additional 14,336 km of track development planned over the next 10 years, which will encourage freight through the South Easterly European border.  This coupled with the development of new deep water ports in Turkey will facilitate the increase of transhipment in the eastern Mediterranean.

Within the next 10 years ports within the North Adriatic will play an important role as they expand their capacity for containers in response to increased trade between Europe andAsia, which will create the opportunity for new supply chains. It is expected thatChinaandIndiawill play an ever increasing role in world trade over the course of the next decade. This will hopefully have a positive impact on euro exchange rates as more and more freight can arrive at European ports and then make its way across the continent.

Increased manufacturing output from Asia will flow through Europe’s main logistics entry points which include Turkey and Poland. Logistics is predicted to become one of the biggest sectors for these countries over the next 10 years, who will in turn likely become excellent commercial and domestic property investment havens, as jobs increase and economies flourishes.

 

Lately, there has been confusion over the state of the euro due to the current financial crisis in Greece. As the country is in heavy debt and in need of a bail out, all the countries tied to the euro are in danger from the collapse as well. These countries include Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. Andorra, Kosovo, Montenegro and many islands of the Euro nations , who also use the euro as the common currency.

The exchange rate euro would be affected for all listed countries if Greece were to leave the currency. Certain political figures do not support the financial bailout of Greece, and favour taking on a new currency as an alternative. After years of tradition a new currency would be difficult to adopt, as constructing, producing and distributing such a high amount of cash is both time consuming and costly.

Instead, Greece would most likely refer back to when the currency used was called drachma, before the switch to the euro. The new currency would be introduced officially over a holiday, with an interim phase between the two currencies. Aside from this, the country would have to put on other limits to ensure that the introduction runs smoothly and is put in place efficiently. Citizens would not be able to draw out as much of the new currency at first, because that would jeopardize the amount of drachma available.

In a recent political election, however, those that were voted in as new political figures are supporters of the bail out and supporters of staying with the euro. The exchange rate euro will not be affected as greatly with the continued membership of Greece. The rate for the euro is currently 0.8 using pounds. The exchange rate fluctuates constantly, so it is important to check it often.

More information on the euro and other currencies can be found at Best Exchange Rates UK. The site includes an array of features including business currency exchange, private currency exchange, and exchange rates for various currencies used globally. Best Exchange Rates UK includes specialists and other relevant information relating to currency.

We have the best money exchange rates for UK residents looking to buy a property abroad and potentially secure a mortgage. When you are buying a property in the UK, there is no end to the choices when it comes to financing the venture.  There are mortgages for lenders of all financial walks of life, from offset mortgages, 100% mortgages, buy to let, interest only, adverse credit mortgages and everything else in-between.

It’s a little different when you buy a property abroad, financial mortgage arrangements tend not to be anywhere near as flexible, sophisticated or as easy to attain as they are here in the UK. The likes of HSBC and Abbey do have lending partners to help you with lending in the likes of Spain and France but you could be searching forever and a day trying to find help in Dubai, China or Croatia, in fact until recently, many foreign countries were really only interested in cash rich buyers.

If you have found the right property, in the right country what are the next steps in terms of financing the purchase? Any equity you are able to put down as a starting point, will always help, this could be via releasing equity from your existing property or savings. Banks overseas have recognised there is now a strong market for UK buyers and have began providing mortgages and lending toUKinvestors. There is still a big difference between these mortgages andUKmortgages, which is that foreign mortgages are nearly always created from scratch and are bespoke to the individual. This means the whole negotiation process and finalising and agreeing terms is often frustrating and can take forever. There are many more factors to consider with an overseas mortgage, you may experience cultural barriers to understanding legal and financial issues and you will more than likely also have matters of foreign currency and money exchange rates to consider. For instance you may need to convert your sterling and get the best rate from pound to euro. In summary buying a property abroad can take a little longer and may not be quite as straight forward as it might be closer to home, regardless of this, it can be the best decision you make in your entire life. For your best exchange rate pound to euro visit us at Best Exchange Rates UK.