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Virtually all the Western economies have been in trouble over the past few years and their respective currencies have borne the brunt. There have been many false dawns for the global recovery in the past 12 months alone, but each sign of optimism has been quickly overcome by a shaky data report or ratings agency downgrade.
Exchange rates have reflected this, fluctuating up and down, proving a nightmare for anyone involved in sending money overseas. It has long since been accepted that the UK economy is “bumping along the bottom” of the longest period of protracted economic decline that anyone can care to remember. But if we look at the fortunes of the Pound in isolation, it has been doing rather well against may of the key currencies of late, including the Israeli Shekel.
Sterling has remained relatively weak against the US Dollar, however it has fared rather better against the beleaguered Euro which has fallen to its lowest value in years. People with transactions coming up in the not too distant future have been locking in, to take advantage of the situation.The evidence is there in the numbers: £300,000 would buy you approximately €370,000 at today’s prices versus around €330,000 at the same time last year. Many investors have been swooping in to take advantage of property bargains, particularly in France, but also elsewhere in the Eurozone.
The Pound has also fared fairly well against the Shekel in the past few months, as Israel’s economy has slowed. The rates are (at the time of writing) at 6.3 versus 5.8 at the same time last year. This is good news for anyone planning a visit, an investment, or a large purchase of any kind in Israel anytime soon.
A weaker Shekel isn’t entirely a bad thing for Israelis either. As an export-heavy economy, a decline in the value of their currency makes goods more attractive to foreign buyers, which could help re-energize growth. UK exporters are faced with precisely the opposite problem, and the UK’s recovery could stutter as a result.
Ben Mitchell is an international currency specialist at foreign exchange company, World First