Hello and hi. Am guessing you heard the news last week about the ‘flash crash’? No? Yikes. Under a rock, much? I kid. Well, last week the currency here on this not so small island lost 6% of its value against the dollar. Then a few days later, the pound had fallen again. Yikes.
So, what’s a person to do? Well, said person contacted the BBC with the following question: I am planning a trip to NY in December, should I get my cash NOW or should I wait? Will there be much change between now and then? Should I stay or should I go? If I stay will there be trouble? If I go, will there be double? You gotta lemme know, should I stay or should I go? Please know that the last bit in italics, was a song reference by The Clash. How funny am I? Quite.
Before I get started…I am curious to know who on earth seeks out financial answers from the BBC? I mean, they are great and all but come.on. Actually, Anthony Reuben, from BBC Reality Check agreed with me and said: “The BBC does not give financial advice, but here are a few things to bear in mind…the exchange rate between the pound and the dollar reflects the views of investors about the relative strengths of the two economies.” Hmm. What did he just say there? If you know, please let me know. Yes. Please do.
In brief, since the BREXIT vote in June, the pound has fallen approximately 18% against the dollar-on the basis or judgement, rather that growth is more likely to be stronger in the US than the UK-and with UK interest rates falling, as US rates are expected to be upwards. According to the BBC, “but it’s always possible that something could happen to change that view – there is a presidential election in the US in November, for example. The outcome of that could make a considerable difference to the exchange rate.” Well yes of course. But the real and proper advice, from Reuban came as:
“You do not necessarily have to put all your eggs in one basket – there is also the option to hedge your bets and buy half of your dollars now and half of them just before you go, as long as you are not going to be hit by extra charges for carrying out two transactions.
“It is always worth shopping around when buying currency – avoid buying your currency at the last minute at the airport. There are plenty of comparison sites online that will help you get the most dollars possible for your pounds, even if it is fewer than you would have got a few months ago.”
So, there you go. Knowledge is power, people. That is all.