Best FX Rates Guide & Interbank Rates Today

Do you want to find today’s foreign exchange rates? Are you looking for “official” interbank exchange rates, or is it the bank foreign exchange rates today you’re after? Do you know what the differences are between the two? Put simply, you might just be interested in the best forex rates today that you can possibly achieve for bank-to-bank transfers.

This comprehensive guide will provide the current foreign exchange rates for a variety of currencies focusing on the Pound Sterling, the US dollar, the Euro and the Australian Dollar. We also show the current interbank exchange rates, and present the best fx rates offers currently on the market. Our research is not specific to find the best pound rates, the best Euro rates, or the best fx dollar rates, but rather covers all commonly-used currencies.

Best Exchange Rates for International Bank Transfers:

WorldFirstWorld First‘s new pricing initiative, starting from August 2019 and effective currently is as follows:

  1.  FX rates of 0.15% to 0.5% less than the inter-bank currency rate, for ALL CURRENCIES.
  2.  No wire fees.
  3.  No hidden fees, and absolute clarify on what you’re paying in fees.
  4.  WorldFirst handles international bank to bank transfers exclusively.
  5. This is the best FX exchange rate for bank transfers based on our comprehensive comparison.
Current Best Forex Rates for Bank Transfers – WorldFirst*
Forex PairInterbank exchange rate*Your average bank’s rate ****WorldFirst’s best rate (large transfes)**WorldFirst’s min. rate***
Pound to Euro1.1085 EUR1.0864 EUR1.1069 EUR1.1030 EUR
Euro to Pound0.9021 GBP0.8840 GBP0.9007 GBP0.8976 GBP
Pound to Dollar1.2945 USD1.2686 USD1.2926 USD1.2880 USD
Dollar to Pound0.7725 GBP0.7570 GBP0.7713 GBP0.7686 GBP
Pound to Australian Dollar1.8417 AUD1.8048 AUD1.8389 AUD1.8325 AUD
Australian Dollar to Pound0.5430 GBP0.5321 GBP0.5422 GBP0.5403 GBP
Pound to Swiss Franc1.1883 CHF1.1646 CHF1.1865 CHF1.1824 CHF
Pound to Hong Kong Dollar10.0368 HKD9.7357 HKD10.0218 HKD9.9867 HKD
Pound to UAE Dirham4.7547 AED4.6121 AED4.7476 AED4.7309 AED
Pound to Singaporean Dollar1.7684 SGD1.7154 SGD1.7658 SGD1.7596 SGD
ANY CURRENCY2 – 5% Currency Spread0.15% Currency Spread0.5% Currency Spread
Immense saving against banks. 
Fully transparent, clear, and cohesiveness pricing.
Comparable rates to TransferWise’s as a whole for smaller volumes.
The best foreign exchange rates for large transfers. No other companies goes this low.
Access online, via email, or through phone.
Fully regulated company with 20 years of experience, trading several billions annually.

*The interbank exchange rates on the above table and this entire website, as well as WorldFirst’s exchange rates are estimated. We rely on external software providers to get those rates, and hence, errors could occur. Before exchanging any funds be sure to check for the official exchange rate, as well as attaining get a current quote from the provider you intend to use (WorldFirst or otherwise).

** WorldFirst’s Best Exchange Rate is 0.15% spread reserved for businesses and individuals transferring more than £5m annually.

*** WorldFirst’s Min. Rate represents a 0.5% spread for individuals who need to transfer less than £500,000 annually. For businesses and individuals transferring between £500,000 and £5m, a spread of 0.25% will be applied.

**** We used 2 – 5% Currency Spread to calculate what would an average UK bank charge in term of FX costs. That is a very rough average based on up to date industry reports, but is not bank specific. Some banks are remarkably cheaper like UK’s challenger bank Starling and Virgin Bank who teamed up with WorldFirst.


More about WorldFirst

World First

WorldFirst is a veteran money transfer company with a significant corporate FX department, owned by the massive payment company AliPay, which has  consistently ranked amongst our top 3 most recommended companies on Money Transfer Comparison since the site’s inception in 2014. The firm boasts 5 office locations across the globe, employing more than 600 people, and is the recipient of many prestigious industry awards such as the Sunday Times FastTrack Top 10 and the Queen’s Award for Enterprise in International Trade.

WorldFirst is considered by our staff as the company  providing the best foreign exchange rates for bank transfers of all sizes above its minimum requirement of £1,000.

WorldFirst accepts clients from regions such as the UK, EU, Canada, Australia, Singapore, Hong Kong, Japan, United Arab Emirates, New Zealand and many more but does not accept American clients. If you are seeking USA money transfer companies offering the best exchange rates check out OFX or Transferwise.


If you need to get the best rate for receiving large amounts from abroad then you should consider inquiring about Multi-Currency virtual bank accounts. WorldFirst also boasts such a virtual currency account for its business clients, and it’s one of the best EUR accounts and best USD accounts as per our comparison.

 

GUIDE: The “Official” Interbank Exchange Rate….

The official currency exchange rate is the real mid-market price in which banks trade currency in between themselves or the central bank. What do we mean by mid-rate? Currencies trade in the same fashion as other assets, so by mid-market we mean the price of the last deal that was made (a deal is made when the ASK price meets the BID price between two parties).

When you’re reading the morning news, or hearing some gloom and doom story over the television, when reports would mention “the rate” or the “official exchange rate” they mean exactly that. The interbank or mid-market rate. The acceptable rate as reflected by the latest deal between banks. The official interbank is not the best forex rate achievable for private clients. 

 

…as opposed to the bank’s Buy / Sell rates

Currency exchange board showing cross rates between various countries

However, that interbank exchange  rate is not the same as the foreign exchange rates offered to private or corporate clients.

Even a very large corporation, trading massive amounts of foreign exchange, using the best money transfer company or a bank’s corporate desk, isn’t going to get the exact interbank rate. Just like with any service there are costs to provide it – whether that be the investment in the currency trading infrastructure, regulatory and compliance requirements or simply staff costs we have to understand banks aren’t able to provide the service for nothing.

There will always be a SPREAD added into the mix, and our only gripe is that banks are often charging a far higher spread than is necessary to cover their costs and make a small profit. The spread is usually shown in percentages. A 0.5% spread means the amount of foreign currency you’ll receive in the deal will be 0.5% less of what you would have received if you were trading at official interbank exchange rates. In almost all cases, both for private individuals and most businesses, the banks exchange rates are the worst on offer. This is because a standard bank spread in the UK will be between 2-3% (for pairs like Pound v Euro or Pound v Dollar, or an even higher spread potentially for trades involving more exotic currencies). You can read more about that aspect above on the best fx rate for international money transfers comparison.

 

An example using the live foreign exchange rate:

The current exchange rate for Pound in Australian Dollars is 1.8417 AUD, and you need to transfer abroad an amount of £100,000 to Australian Dollars. Your bank’s spread is 2% so you’ll end up with 180,482.6155 AUD after the exchange. Definitely not the best fx rate for money transfers!

It means the spread fee you paid in practice (whether they’d like to call this a fee or not!) is £2,000 or 3,683.3187 AUD. rating

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Why wasn’t I aware of this before when enquiring about the best bank fx rates?

Most banks and foreign exchange bureaus operate in opaque ways, and try to divert you away from realising that the foreign exchange rate spread is the most meaningful aspect in a large foreign exchange transaction. They love to advertise a “0% commission” policy or toot their horn about their affordable £15 wire fees (if even) but a hefty spread makes all the difference in the world.

Have you ever seen a bank advertising their foreign exchange rates at all? In the UK, they don’t even publicly advertise the current rate they are offering their clients on their websites. Really, the only way you can enquire about the rate your bank will give you for an international transfer is to give them a call and more often than not speak to a generic member of the customer support team whom doesn’t have specialist knowledge of the foreign exchange industry. Put it to the test, call your bank to find the bank exchange rate today and compare this to the rates on offer with WorldFirst. In other regions, like Australia, they do, but that foreign exchange rate is still very much incomparable with what money transfer companies offer

Are you looking to calculate how much you overpaid on your past transfer? Use our proprietary tool below to get an estimation of that with our  money transfer fee calculator.

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Realistic expectations and some industry benchmarks for forex rates

We have already established the fact that achieving  the interbank currency exchange rate is unattainable, but what is? What is a fair price to pay for a foreign exchange transaction?

UK banks will charge 1.5%-4% on average in spread (bank exchange rates are worse than the interbank rate by that percentage). That average spread is true for USA banks, European banks, and generally speaking banks all across the world with the exception of ultra-competitive banking environments like Hong Kong where the spread is closer to 1%.

If you are a large corporation with significant trading volumes, you can get preferential business rates from the bank and  direct access to the trading desk. Those preferential exchange rates can be extremely good, but only a small subset of businesses are eligible (often with annual currency trading volumes of at least £10m).

Among all money transfer providers (the ones dealing exclusively with bank to bank transfers), the average spread will be under 1% for all currency pairs. Companies like Transferwise take 0.5-0.8% per transaction depending on the locations, Currencyfair’s average margin is reported to be 0.4%, and WorldFirst which is featured on our best exchange rate section charges spreads of between 0.15% and 0.5% depending on volumes. There are additional companies like Currencies Direct, OFX, or moneycorp whose currency exchange rate is at around the same ballparks but isn’t fixed (they quote customers on a client-by-client basis). If you wish to read more about this you can with our article on FX companies vs banks. There may be certain price points where currencies direct can offer a more preferential rate than WorldFirst – this would just involve negotiating with the broker over the telephone.

For example, as a purely illustrative purpose, if you were trading £480,000 to EUR then the rate with WorldFirst would be fixed at 0.5%, just below their £500,000 threshold for which you could achieve a rate of 0.25% – if you speak with Currencies Direct they might be willing to trade somewhere between the two spreads.

Getting the best foreign exchange rate for bank to bank transfers is feasible, just may require a bit of legwork, that’s all.

When it comes to travel money, there are different providers designated for that and upon a large £1,000 or more exchange, it is possible to obtain about 0.5% spread on the Pound vs Euro or the Pound vs Dollar (and slightly above that for less common currencies).

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Spot FX versus Forward Rate or Swap Rate

When we refer to “foreign exchange rate” we mean the current rate for a transaction happening now. There are other types of foreign exchange transaction which are either condition or suppose to take place in the future. That transaction happening now is called a spot FX transaction. If you want to read other types of transactions like a Forward Contract, visit our page dedicated to currency hedging.

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What should you be seeking besides the best Pound rate or the best Euro fx rate

The goal is to sidestep your bank and seek out to compare currency transfer rates  in order to discover the best exchange rate so you can pay less money on each transfer, that’s a given, but it’s not the only consideration to keep in mind. We believe safety, security, service, diversity of offering, and the global reach of each company should have a major impact on your decision too. If we put this plainly – FIRST you seek for a reliable company which adheres to the highest standards, and then among this subset of “approved” companies you compare the currency rates.

Below you can find out top rated companies by overall rating offering top FX rates:

Currencies Direct
  • Min Transfer: £/€/$ 100
  • Currencies Supported: 39
  • Offices : UK, EU, USA, India, South Africa.
  • Our Rating : 97.8%
  • Most Global Offices and Reach

    No Fees from Anywhere

    96% Client Satisfaction
World First
  • Min Transfer: £/€ 1,000
  • Currencies Supported: 121
  • Offices : UK, EU, Australia, HK, Singapore. USA-based clients not accepted
  • Our Rating : 95.4%
  • Easiest Sign Up Process

    Great Online Sellers Offering

    Transparent Exchange Rates
moneycorp
  • Min Transfer: £/€/$ 50
  • Currencies Supported: 120
  • Offices : UK, EU, Australia, USA, HK, UAE, and South America.
  • Our Rating : 92.8%
  • Friendly, Professional Service

    Discounted Rates

    No Transfer FeesDiscounted rates exclusively for our readers - great offer for large transfers

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Should I sign up with multiple companies or just one to secure the best exchange rate?

Whether you are looking for the best Pound vs Euro rate, the best Pound to Euro FX exchange rate, or whichever currency pair – then sidestepping your bank and using a designated provider to beat the banks and get a top notch exchange rate is almost a sure way of doing it. In fact, our website – Money Transfer Comparison, is dedicated toward this worthwhile goal. We review currency brokerages and list their pros and cons,  ultimately providing our recommendation towards using them.

Signing up with multiple money transfer companies is easy to do, especially if you are in the UK, EU or Australia. It should only take minutes of your time to sign up with each provider. Until you sign up, some of the major companies won’t be able to quote you with a current exchange rate, so you won’t know what they are offering. Additionally and importantly, companies like Global Reach Group will be willing to negotiate the default fx rate if you are looking to transfer large amounts. You could contact them with competing offers and they may beat them by offering a better rate.

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What are “honeymoon rates”

Some companies will pull a strategy called ‘honeymoon rates’ for clients who need to use their services for multiple transfers. The first transaction will have the best bank exchange rate possible (and possibly the next few transfers to follow) and then the margin/spread will begin widening as the rates changed. The means that if in the first transfer the company offered you the “best rate” of 0.4% below the interbank exchange rate, the next transfer may be 0.5% and the 10th transfer may surpass the 2% margin, even. We’ve seen it happen and you should be on the lookout.

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Current, Official, Foreign Exchange Rates

Rates are updated on an hourly basis from an external provider. We do not guarantee accuracy. These are not rates for foreign currency bank transfers but rather the official rate used in trading between central banks. To view the best foreign exchange rate for bank transfers click here.

Common Currency Pairs – From GBP

GBP Exchange
Current Pound to Euro Rate:

  • 1 Pound is €1.1085 EUR
  • 10,000 Pound are €11,085.4254 EUR 

Current  Pound to US Dollars Rate:

  • 1 Pound is $1.2945 USD
  • 10,000 Pounds are $12,945.0006 USD 

Current  Pound to Australian Dollars Rate:

  • 1 Pound is A$1.8417 AUD
  • 10,000 Pounds are A$18,416.5934 AUD

Current  Pound to Japanese Yen Rate: 1 Pound is

  • ¥135.4759 JPY
  • 10,000 Pounds are ¥1,354,759.0353 JPY

Current  Pound to South African Rand Rate: 1 Pound is

  • R21.0345 ZAR
  • 10,000 Pounds are R210,344.6089 ZAR

Current  Pound to New Zealand Dollar Rate:

  • 1 Pound is $1.9572 NZD
  • 10,000 Pounds are $19,572.3231 NZD

 

Less Common Currencies Pairings – From GBP

  • Pound to Canadian Dollar Rate: 1 Pound is $1.7244 CAD.
  • Pound to Israeli New Shekel Rate: 1 Pound is ₪4.4102 ILS.
  • Pound to Hong Kong Dollar Rate: 1 Pound is $10.0368 HKD.
  • Pound to United Arab Emirates Dirham Rate: 1 Pound is 4.7547 AED.
  • Pound to Brazilian Real Rate: 1 Pound is R$7.4342 BRL.
  • Pound to Argentine Peso Rate: 1 Pound is $101.3982 ARS.
  • Pound to Mexican Peso Rate: 1 Pound is $27.4258 MXN.
  • Pound to Chinese Yuan Rate: 1 Pound is ¥8.6618 CNY.
  • Pound to Indian Rupee Rate: 1 Pound is R96.5877 INR.

Common Currency Pairs – From EUR

euro flag


Current Euro to Pound Rate:

  • 1 Euro is £0.9021 GBP
  • 10,000 Euro are £9,020.8537 GBP

Current Euro to US Dollars Rate:

  • 1 Euro is $1.1677 USD
  • 10,000 Euros are $11,677.4956 USD

Current Euro to Australian Dollars Rate: 1 Euro is

  • A$1.6613 AUD
  • 10,000 Euros are A$16,613.3394 AUD

Current Euro to Japanese Yen Rate:

  • 1 Euro is ¥122.2108 JPY
  • 10,000 Euros are ¥1,222,108.3018 JPY

Current Euro to South African Rand Rate:

  • 1 Euro is R18.9749 ZAR
  • 10,000 Euros are R189,748.7937 ZAR

Current Euro to New Zealand Dollar Rate:

  • 1 Euro is $1.7656 NZD
  • 10,000 Euros are $17,655.9062 NZD

 

Less Common Pairings – From Euro

  • Euro to Canadian Dollar Rate: 1 Euro is $1.5556 CAD.
  • Euro to Israeli New Shekel Rate: 1 Euro is ₪3.9784 ILS.
  • Euro to Hong Kong Dollar Rate: 1 Euro is $9.0541 HKD.
  • Euro to United Arab Emirates Dirham Rate: 1 Euro is 4.2891 AED.
  • Euro to Brazilian Real Rate: 1 Euro is R$6.7063 BRL.
  • Euro to Argentine Peso Rate: 1 Euro is $91.4698 ARS.
  • Euro to Mexican Peso Rate: 1 Euro is $24.7404 MXN.
  • Euro to Chinese Yuan Rate: 1 Euro is ¥7.8136 CNY.
  • Euro to Indian Rupee Rate: 1 Euro is R87.1303 INR.

Common Currency Pairs – From USD

 

Current US Dollar to Euro Rate:

  • 1 US Dollar is €0.8563 EUR
  • 10,000 US Dollar are €8,563.4800 EUR

Current US Dollar to Pound Rate:

  • 1 US Dollar is £0.7725 GBP
  • 10,000 US Dollars are £7,724.9900 GBP

Current US Dollar to Australian Dollars Rate:

  • 1 US Dollar is A$1.4227 AUD
  • 10,000 US Dollars are A$14,226.8000 AUD

Current US Dollar to Japanese Yen Rate:

  • 1 US Dollar is ¥104.6550 JPY
  • 10,000 US Dollars are ¥1,046,550.0000 JPY

Current US Dollar to South African Rand Rate:

  • 1 US Dollar is R16.2491 ZAR
  • 10,000 US Dollars are R162,491.0000 ZAR

Current US Dollar to New Zealand Dollar Rate:

  • 1 US Dollar is $1.5120 NZD
  • 10,000 US Dollars are $15,119.6000 NZD

 

Less Common Pairings – From USD

  • US Dollar to Canadian Dollar Rate: 1 US Dollar is €1.3321 CAD.
  • US Dollar to Israeli New Shekel Rate: 1 US Dollar is ₪3.4069 ILS.
  • US Dollar to Hong Kong Dollar Rate: 1 US Dollar is $7.7535 HKD.
  • US Dollar to United Arab Emirates Dirham Rate: 1 US Dollar is 3.6730 AED.
  • US Dollar to Brazilian Real Rate: 1 US Dollar is R$5.7429 BRL.
  • US Dollar to Argentine Peso Rate: 1 US Dollar is $78.3300 ARS.
  • US Dollar to Mexican Peso Rate: 1 US Dollar is $21.1864 MXN.
  • US Dollar to Chinese Yuan Rate: 1 US Dollar is ¥6.6912 CNY.
  • US Dollar to Indian Rupee Rate: 1 US Dollar is R74.6139 INR

Common Currency Pairs – From AUD

australia flag

Current Australian Dollar to Euro Rate:

  • 1 Australian Dollar is €0.6019 EUR
  • 10,000 Australian Dollar are €6,019.2594 EUR

Current Australian Dollar to Pound Rate:

  • 1 Australian Dollar is £0.5430 GBP
  • 10,000 Australian Dollars are £5,429.8858 GBP

Current Australian Dollar to US Dollar Rate:

  • 1 Australian Dollar is$0.7029 USD
  • 10,000 Australian Dollars are $7,028.9875 USD

Current Australian Dollar to Japanese Yen Rate:

  • 1 Australian Dollar is ¥73.5619 JPY
  • 10,000 Australian Dollars are ¥735,618.6915 JPY

Current Australian Dollar to South African Rand Rate:

  • 1 Australian Dollar is R11.4215 ZAR
  • 10,000 Australian Dollars are R114,214.7215 ZAR

Current Australian Dollar to New Zealand Dollar Rate:

  • 1 Australian Dollar is $1.0628 NZD
  • 10,000 Australian Dollars are $10,627.5480 NZD

 

Less Common Pairings – From AUD

  • Australian Dollar to Canadian Dollar Rate: 1 Australian Dollar is €0.9363 CAD.
  • Australian Dollar to Israeli New Shekel Rate: 1 Australian Dollar is ₪2.3947 ILS.
  • Australian Dollar to Hong Kong Dollar Rate: 1 Australian Dollar is $5.4499 HKD.
  • Australian Dollar to United Arab Emirates Dirham Rate: 1 Australian Dollar is 2.5817 AED.
  • Australian Dollar to Brazilian Real Rate: 1 Australian Dollar is R$4.0367 BRL.
  • Australian Dollar to Argentine Peso Rate: 1 Australian Dollar is $55.0581 ARS.
  • Australian Dollar to Mexican Peso Rate: 1 Australian Dollar is $14.8919 MXN.
  • Australian Dollar to Chinese Yuan Rate: 1 Australian Dollar is ¥4.7032 CNY.
  • Australian Dollar to Indian Rupee Rate: 1 Australian Dollar is R52.4460 INR

The above official interbank exchange rates today are for educational purposes only. The easiest way to double check the rates  would be google. Insert queries such as “gbp in euro” or “10000 gbp in euro” or “gbpeur rate” and you should be able to get what you are looking for. Alternatively, use the Bank of England’s foreign exchange rates which are available on their website.

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Forecasts and History for the Pound Sterling

Pound vs Euro

Current Pound Vs Euro Rate:

If you want to conduct a spot FX transaction these are the current GBPEUR rates

1 Pound is €1.1085 EUR

50 Pounds are €55.4271 EUR

100 Pounds are €110.8543 EUR

1,000 Pounds are €1,108.5425 EUR

2,000 Pounds are €2,217.0851 EUR

10,000 Pound are €11,085.4254 EUR 

1 Euro is £0.9021 GBP

50 Euro are £45.1043 GBP

100 Euro are £90.2085 GBP

1,000 Euro are £902.0854 GBP

2,000 Euro are £1,804.1707 GBP

10,000 Euro are £9,020.8537 GBP 

Future Prospects and Predictions for Pound vs Euro

Money Transfer Comparison’s authors and editors do not have a positive outlook for the UK after its decision to leave the EU. In essence, the UK is gaining nothing from exiting the EU right now (it may benefit from its ability to strike moe personalised trade deals in the long term), but its trade will certainly suffer in the immediate term. We still don’t know to what extent Brexit will impact the UK and indeed the EU.There does appear to be a route forward now – with the UK formally leaving the European Union on the 31st January and entering into a transition period for the remainder of 2020. 

We must also understand that this divorce bill (currently set to run until the 31st Dec 2020) doesn’t paint a clearer picture on the future of the UK and the EU’s trading relationship at all.  It simply means trade can continue, by and large, as it is now until the end of 2020. A no deal would still be possible at the end of 2020 and is actually now far more likely, particularly if there is no way of extending the transition period. Something that could be written into law depending on what form of Brexit Bill is passed in Parliament. 

The UK’s Monetary Policy committee held their nerve in Q4 and maintained interest rates at 0.75% but forecasts predict a 60% chance of a rate cut for the UK by the end of June 2020 as the UK remains on track to miss its 1.3% growth target for 2019 (GDP data to be released shortly). 

In short, finding the best Pound to Euro exchange rate may have already passed with the conservative win election gains already retreating.  Much will depend on how well trade talks progress between the UK and the EU. Markets are fearing the worst-case scenario where the trading relationship immediately switches to WTO terms at the end of the year. If this continues to appear more likely there is likely to be a continued decline in the valuation of the Pound vs Euro. Ursula von der Leyen, the new European Commission president, has warned it would be “impossible” to reach a comprehensive trade deal by the end of 2020.

Historical Overview: Sterling’s demise against the Euro

Sterling has been able to hold its position against the Euro for much of the period since 1999 with overvaluation in comparison with the German economy offset by the fact that the Euro had been persistently dragged lower by weakness in other key countries. Sterling, however, hit fresh multi-year lows in 2019 as  Brexit fears have undermined confidence in the UK outlook. Lows not seen for GBP this severe since the end of the 2009 financial crisis.

Source For This Graph

2019 Onwards – Brexit Impasse and UK political uncertainty

The pound started steady in 2019 as the market maintained hope the brexit withdrawal agreement could be passed. Theresa May taking this for a vote in the House of Commons no less than three times, hoping that with its new found support from the DUP it could be pushed through. But with a number of conservatives voting against the government they couldn’t get close to the required majority. By historical standards some of the foundations of the UK economy appeared strong too, unemployment was below 4% and Q1 GDP was at 0.5%. This however slowed to 0.2% in Q2 and unemployment is reported to have risen throughout the year. 

In the hope it would help to push through a withdrawal agreement, Theresa May resigned and Boris Johnson was elected as the new prime minister. However with this only increasing the chances of a no deal GBP hit new lows against EUR, not seen since the end of the financial crisis in 2009. Taking the GBPEUR rate as low as 1.07.

After fresh lows in August 2019, the pound began to recover as parliament continued to search for ways to block a no deal brexit and the government increased its negotiations with the EU, seeking to reach a new withdrawal agreement that would replace the Irish backstop.  In October GBPEUR sat around the 1.15 level and continued on an upward trend throughout the year, peaking at a 3 year high of 1.207 after the December General Election. Shaking up the House of Commons and providing the conservatives with an overwhelming majority in Parliament. Gains however retreating back to mid 1.17 as concerns remain high for a no deal outcome at the end of 2020. 

Jan 2 2017 – 2019: Euro recovery

Overall Sterling sentiment continued to weaken in 2017 with the UK government’s inability to secure a majority in the General Election increasing fears of instability and also making it even more difficult to secure a satisfactory outcome to the Brexit negotiations. In 2018, the GBPEUR stayed within the range of 1.10-1.15. The closer it got to the end of the year, the lower the rate was based on concern of a “no deal Brexit” leaving the UK economy volatile and vulnerable. There was a slight recovery in November 2018 based on rumors the EU and the UK reached an agreement.. 

Selling pressure on Sterling was intensified by a strong Euro recovery as stronger growth rates triggered expectations of an ECB move to tighten monetary policy.

June 23rd 2016 – 2017: Brexit represents another UK shock

Pound Sinking In The Ocean Showing Depression Recession And Economic Downturns 3d RenderingThe relative balance of forces changed substantially following the June 23rd UK referendum on whether to remain in the EU.

There had been very limited expectations that the UK could vote to exit the EU and the leave result triggered a substantial market shock.

There were increased fears surrounding the long-term UK outlook with concerns that underlying growth rates would be substantially weaker over the medium term.

The Bank of England also cut interest rates once again to 0.25% which undermined Sterling confidence. The inconclusive June 2017 election increased fears over political instability and there were expectations of difficult negotiations with the EU.

2014 – June 22nd 2016: Euro weakness dominates

During this period, there were further concerns surrounding the Euro-zone outlook as governments and the ECB were unable to find a permanent solution to the crisis.  The debt crisis continued to flare-up with another bailout for Greece while the Euro was trapped in permanent low growth with further speculation that the Euro would break up.

As confidence in the Euro-zone and Euro continued to weaken, ECB President Draghi announced that he would do whatever it takes to protect the Euro. Draghi was successful in preventing a break-up of the Euro area.

The ECB, however, was forced to cut interest rates very aggressively in an attempt to meet its inflation target and ease financial tensions. The move to zero interest rates and a negative deposit rate, together with the quantitative easing programme, pushed the Euro sharply lower against all major currencies. Sterling was, therefore, able to make headway as EUR/GBP retreated to the 0.7000 area despite very low UK interest rates.   

2011 – 2014: UK recovery, Euro-zone crisis

The UK economy gradually emerged from recession with a return to growth and there was a steady recovery in the banking sector.

At the same time as a gradual UK recovery, confidence in the Euro-zone outlook deteriorated sharply.

The Euro-zone had been pushed into recession during the global banking crisis and, although fears surrounding the banking sector were slower to emerge, fears escalated during this period.

The Greek debt crisis also emerged for the first time in 2010 with the Euro-zone members effectively forced to bailout Greece in order to prevent a serious collapse within the Euro-zone banking sector.

Governments found it very difficult to control the debt crisis and the Euro-zone as a whole lurched from crisis to crisis with persistent fears over a sovereign debt crisis.

The tables were, therefore, turned in global currency markets with the Euro under sustained selling pressure while there was a net recovery in Sterling with EUR/GBP declining to the 0.8000 area. 

2008 – 2011: global financial crisis, UK banks badly damaged

The first real evidence of the great financial crisis emerged in August 2017 with redemptions halted in two property funds.

The immediate UK impact was limited, but stresses quickly emerged in the money markets as wholesale lending started to seize up. Given that there had been an increased dependence on money-market lending by UK financial institutions, confidence in the sector quickly declined and financial difficulties emerged.

The initial focus was on Northern Rock which requested government support in November 2017. The crisis intensified rapidly in early 2008 with Northern Rock nationalised. The UK suffered a wider banking-sector crisis as Lloyds Bank and the Royal Bank of Scotland required government support to avoid collapse.

The banking crisis was an important factor in pushing the UK economy into a deep recession and the Bank of England was forced to cut interest rates very aggressively to stabilise financial conditions.

Although the banking crisis was a global feature, the UK banking crisis was a key factor in triggering heavy selling pressure on Sterling as EUR/GBP peaked at record highs around 0.9800.

2003 – 2007: the great moderation, false UK optimism

At the time, the period between 2003 and 2008 was marked by an optimistic period for the UK economy. Under the Blair government, government finances were boosted by strength in tax revenue and deficits appeared to be under control in historic terms.

The Bank of England Monetary Policy Committee remained successful in controlling inflation which held close to the 2% target and there were no serious concerns surrounding the balance of payments. Overall GDP growth also maintained a firm tone which helped underpin Sterling sentiment.

With hindsight, the macro-economic policy framework was building up excessive debt amid lax regulation and compounded by excessive global debt expansion, although these concerns were relatively limited at the time.

Jan 1st 1999 – 2003: Euro teething troubles

The Bank of England was granted independence to set interest rates following the 1997 general election and by the time of the Euro’s introduction in 1999, the framework was well established.

The Euro was unable to make headway following its 1999 launch and the single currency weakened sharply to lows below 0.8500 against the dollar in 2000 with an underlying lack of confidence in cohesion for the new currency. EUR/GBP hit a low below 0.5700 in early 2000.

Pound to Euro Rates Analysis Summary

Sterling was able to recover after the 2008 financial crisis as Euro-zone fears dominated, but has now weakened to similar levels with expectations of permanent damage to the UK economy if there is a disorderly EU exit.

We believe there does at least appear a route forward now for a Brexit withdrawal agreement to be passed. But just because a route forward now looks possible, it simply reflects just how poor the state of affairs were before when a withdrawal agreement just did not look likely to be struck. And just because a route forward looks possible it by no means provides security it will happen. Much could still go wrong to scupper the withdrawal agreement at this stage.  Ultimately the UK’s withdrawal from the EU will damage both the UK and EU’s balance of trade in the coming years, but with the UK exporting a far greater percentage of its exports to the EU than the EU does to the UK it is only a logical assumption it will have a greater impact on the UK.

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Pound vs Dollar

Current GBP Rates (GBPUSD):

If you want to conduct a spot FX transaction these are the current GBP/USD rates

1 Pound is $1.2945 USD

50 Pounds are $64.7250 USD

100 Pounds are $129.4500 USD

1,000 Pounds are $1,294.5001 USD

2,000 Pounds are $2,589.0001 USD

10,000 Pound are $12,945.0006 USD 

1 Dollar is £0.7725 GBP

50 Dollars are £38.6250 GBP

100 Dollars are £77.2499 GBP

1,000 Dollars are £772.4990 GBP

2,000 Dollars are £1,544.9980 GBP

10,000 Dollars are £7,724.9900 GBP 

Future Prospects and Predictions – GBP vs. USD

Money Transfer Comparison’s authors and editors still believe in a strong dollar under the growing U.S economy in spite of some market turbulence in 2019. Current US growth is below expectations but we are seeing a general slowdown in economies globally, in no part down to the growing US and China trade war.   China is also experiencing a general and gradual slowdown of its GDP output (but to a greater extent than the US) and its growth numbers are not meeting targets. Investors are wary of the wider global impact on China’s trading partners, including Japan and Australia. This together with the relative instability in Europe for both GBP and EUR, we believe the Dollar will remain the safe haven for investors.  Even despite the growing trade war between the US and China and the US economy growing at a slower rate than 2017 and 2018. 

With growing concerns from the impact of Brexit we believe Sterling could continue to weaken  in 2020 if a ‘no deal’ outcome continues to looks likely. In any case, leaving the EU will see a general slowdown in the UK economy over the next 5 to 10 years so the Pound is expected to maintain its comparably weaker position against  most major currencies and in particular, the US dollar. At a range of 1.3 to 1.35 of Pound vs Dollar, this might be the best Pound to Dollar exchange rate to be had.

Historical Overview: Sterling’s demise against the dollar

Optimism surrounding the UK economy triggered Sterling strength in the period ahead of the global financial crisis and GBP/USD moved to levels which were substantially overvalued. However, in the past 10 years, two major shocks have put GBPunder heavy selling pressure. Sterling slumped during 2008 as the financial crisis intensified and it was then tested further to 31-year lows after the 2016 Brexit vote.

 Source For This Graph

Future Prospects and Predictions – GBP vs. USD

Money Transfer Comparison’s authors and editors still believe in a strong dollar under the growing U.S economy in spite of some market turbulence in 2019. Current US growth is below expectations but we are seeing a general slowdown in economies globally, in no part down to the growing US and China trade war.   China is also experiencing a general and gradual slowdown of its GDP output (but to a greater extent than the US) and  its growth numbers are not meeting targets. Investors are wary of the wider global impact on China’s trading partners, including Japan and Australia. This together with the relative instability in Europe for both GBP and EUR, we believe the Dollar will remain the safe haven for investors.  Even despite the growing trade war between the US and China and the US economy growing at a slower rate that 2017 and 2018. 

With growing concerns from the impact of Brexit we believe Sterling could hit new lows in 2020 if there is a ‘no deal’ outcome. In any case, leaving the EU will see a general slowdown in the UK economy over the next 5 to 10 years so the Pound is expected to maintain its comparably weaker position against  most major currencies and in particular, the US dollar.

Pound Sinking In The Ocean Showing Depression Recession And Economic Downturns 3d RenderingAugust 2019 Onwards: Slight recovery for Sterling

The US is currently growing at an annualised 2%, lower than its 3.1% target.   Despite this the fed held rates in their latest December meeting, keeping the rate between 1.5-1.75%. None of the policy makers are expecting to set rates below 1.5% until at least the end of 2022, and only if the economy is really slowing.

News of a new withdrawal agreement for the UK  temporarily pushed sterling higher in October, gaining  value against the dollar to recover from all time lows. GBPUSD pipped 1.30 before levelling out to around 1.28 towards the end of October. But ended the year stronger, fluctuating between 1.30-1.35 throughout December 2019.

April 2018 to August 2019: Sterling slips back to lows

Pound Sinking In The Ocean Showing Depression Recession And Economic Downturns 3d RenderingThe US dollar gained significantly against all currencies throughout 2018 because of four rate hikes by the Fed. And generally maintained its strength throughout 2019 despite two interest rate cuts. Of the four rate hikes in 2018, whilst the first one did not hit the market by surprise, the September and December rate hikes made the market understand the no-interest era was gone in the US. The fed then came under heavy pressure from Donald Trump in 2019 to slash interest rates in a complete change of policy to boost consumer spending.

But whilst the fed did lower rates at two points, taking base rates to within 1.75-2%, it didn’t cut rates anywhere near as much as Trump desired. In addition to this, the pound had been showing signs of weakness based on Brexit – the closer the date was ticking to March 2019, when the UK was originally set to leave the EU whether there was an agreement in place or not, the higher the levels of concern and panic. Prime Minister Theresa May demonstrated a lack of support for her actions and the deal she reached with the EU was rejected by parliament multiple times., Eventually ending in Theresa May’s resignation in order to make progress on the issue of Brexit.

January 16th 2017 until April 2018:  Sterling recovers from 30-year lows

Pound Sinking In The Ocean Showing Depression Recession And Economic Downturns 3d RenderingSterling dipped to 31-year lows just below 1.2000 in January before recovering some ground as the economy regained momentum. Sentiment, however, weakened again from June following the UK General Election. The government’s inability to secure a majority increased fears of instability with fears that Brexit negotiations would become even more difficult given UK weakness.

Sterling selling was intensified by a strong Euro recovery as stronger growth rates triggered expectations of an ECB move to tighten monetary policy while UK rates remain at record lows.

The dollar spiked higher following the unexpected election of US President Trump amid expectations of aggressive tax cuts which would tend to strengthen growth and potentially trigger a faster pace of Fed tightening. Confidence in Trump and the reform agenda faded rapidly and allowed GBP/USD to stabilise around 1.30 as the dollar came under sustained pressure.

June 23rd 2016 – January 15th 2017: Brexit shock triggers Sterling slump

The June 23rd UK referendum on whether to remain in the EU was an important shock to global markets, especially as there had been strong expectations that late momentum would be more likely to favour the remain side.

Fears surrounding the long-term UK outlook increased with expectations that underlying growth trends would be weaker and longer-term deterioration in the economic performance.

The Bank of England also cut interest rates once again to a record low of 0.25% which undermined Sterling confidence. Selling culminated in a flash crash in early October with GBP/USD losing over 5% in a matter of minutes before recovering ground.  


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July 2014 – June 22nd 2016: Dollar strength dominates

During this period, there were fluctuations in Sterling confidence with volatility, for example, surrounding the Scottish independence referendum.

The UK economy was relatively stable with solid underlying growth. The Bank of England, however, was unable to find a reason to raise interest rates and Sterling lost ground.

The main focus was on the dollar which appreciated sharply from July 2014. The Federal Reserve moved to end the quantitative easing programme with bond buying completed in October 2014.

Crucially, the Federal Reserve was the only major central bank which was tightening monetary policy. The ECB was cutting interest rates amid fears surrounding deflation while the Bank of Japan maintained a very aggressive easing. In this environment, the dollar gained firm support with strong gains over the second half of 2014, although Sterling also maintained a generally robust tone.

November 2010 – 2014: US and UK recovery, relative calm

Following the financial crisis, the US and UK economies gradually recovered ground during the 2011-2014 period.

The Federal Reserve was still very uneasy surrounding the pace of recovery and the quantitative easing programme continued. The Fed announced a second round of bond purchases with purchases of government bonds of $75bn per month with total purchases of $600bn.

The Fed also announced a policy to keep long-term interest rates lower and there was a third round of government bond purchases between September 2012 and December 2013.

The expansionary Fed policy was important in restraining dollar support, although the Bank of England also maintained interest rates at extremely low levels of 0.50% which limited the potential for Sterling gains.  Overall, the UK currency eventually advanced to the 1.70 area before fading.

2008 – November 2010: global financial crisis, dollar gains by default

The first real evidence of the great financial crisis emerged in August 2007 with redemptions halted in two property funds.

Stresses quickly emerged in the money markets as wholesale lending started to seize up which put pressure on UK financial institutions.

The crisis intensified rapidly in early 2008 with Northern Rock nationalised while Lloyds Bank and the Royal Bank of Scotland both required government support to avoid collapse.

The banking crisis was an important factor in pushing the UK economy into a deep recession and the Bank of England was forced to cut interest rates very aggressively to stabilise financial conditions.

The US economy also suffered a deep recession and the collapse of Lehman Brothers Bank was a crucial factor in intensifying the global crisis.

In times of financial turmoil, however, there tends to be demand for US Treasuries and the dollar on defensive grounds and there were capital inflows into the US currency. An important feature was very high volatility across all asset classes.

The combination of dollar recovery and heavy Sterling losses triggered a massive GBP/USD decline to below 1.40 from near 2.00.

July 2001 – March 2008: the great dollar slide

Origami dollar arrow pointing down over a world mapThe dollar index peaked just above the 121.0 level in July 2001 before embarking on a prolonged slide over the next 3 years with the dollar index dipping to lows near the 80.0 level.

The US currency initially came under pressure in the face of interest rate cuts and a slide towards recession. The Federal Reserve continued to cut interest rates as the economy moved into recession and rates eventually declined to lows of 1.0% in 2003.

The US currency continued to be undermined by a loose monetary policy over the next 3 years. In contrast, there was increased optimism surrounding the UK outlook as hype surrounding the Blair government hit a peak which boosted Sterling support.

GBP/USD broke above 1.90 during 2004 and, although there was a retreat to the 1.70 area in 2005, the UK currency regained ground and rallied to above the key 2.000 level in 2007 as the dollar index hit a low of below 74.0 in early 2008.

Jan 1st 1999 – Jan1st 2002: Dollar in charge

The Federal Reserve tightened monetary policy during 1999 and rates peaked at 6.5% in July 2000 from 4.5% at the beginning of 1999.

Although there were significant fluctuations in UK interest rates, there were only limited net changes as US policy dominated. GBP/USD declined to lows just below 1.3700 in June 2001.

Pound to US Dollar Rates Analysis Summary

Historically, Sterling has had a pattern of mean reversion with the currency moving back towards fair value against the dollar after periods of under and over-valuation. Sterling is now under-valued once again, but this time around there is a genuine reason for concern with the coming brexit which to date has not been negotiated through. If the UK fails to find an adequate replacement for free trade with the EU, the British economy will suffer and as a result the Pound Sterling will continue trading at current levels or lower.

If  Brexit is negotiated to the satisfaction of the markets, or even better, is reversed by lawmakers, then we can expect the GBP/USD rate to climb back to at least 1.50. The question is whether this is even a possibility, and as time passes by, it most certainly looks less possible.

Our assumption is that the pound will continue to decline against a solid dollar supported by an American president whose main agenda is to cut taxes and strengthen the economy.  Just as we made a prediction last year that GBPUSD could hit 1.20 we may well see the same in the coming 12 months if the UK cannot find a way forward for a Brexit deal.

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Additional Read

The top two resources for you:

Recommended resources for a better understanding of the foreign exchange rates:

Summary of we this guide taught us:

  • The foreign exchange interbank rate is the official rate banks use when trading currencies with each other.

  • Bank foreign exchange rates made available to clients is not the interbank rate. It contains a built-in spread.

  • Banks’ fx rates for bank to bank transfers can be 2.5% worse than the interbank fx rate using high-street banks.

  • The best bank exchange rates are still usually not as good as the specialist broker’s best FX rate for bank money transfers. The dedicated companies/brokerages can provide you with a better-than-bank foreign exchange rate.

  • We believe WorldFirst has the best FX for international money transfers offer currently on the market.

  • There are many considerations when choosing a provider that go beyond the exchange rate offered.

  • The Pound to Euro and Pound to USD exchange rate is expected to rattle throughout 2020.

     

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 Image Credit:Icon made by Freepik from www.flaticon.com is licensed under CC BY 3.0
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Save on Foreign Currency - Eyes on the Dollar
5 years ago

[…] understanding of your costs. When you have this number, you can simply compare it to the official exchange rate. If 10,000 Australian Dollars are officially 7,070 American Dollars, but you’re only getting […]

Sue
4 years ago

Hi, could you please give any advise to sister and I, we would be very grateful. My sister who lives in Canada is coming home to the uk for a holiday, we are then all going to Benidorm. What we would like to know is the most economical why to change her money. Should she change her CAD to GBP then to Euro or CAD straight to Euro. I doesn’t matter about changing the money back to CAD. We would appreciate any suggestions as we are totally confused to where all the currency is blending into one. Thank You in… Read more »

Hermine
3 years ago

Very nice article, just what I needed.

Abiodun Williams Emmanuel
3 years ago

Hi, I’ll like to confirm your process flow for onboarding an energy company with its operations in west Africa – Nigeria and currently have a intermediary coy based in U.K to carry out international payment on our behalf to our global suppliers I.e Trafigura and others. We currently have capacity to exchange Naira for USD quarterly between $10-40Million To support our clients i.e Total Nigeria Plc, Sahara Energy Resources Ltd, Conoil and some others. You can please check us out on http://www.sceptrumenergy.com to know much about our business. We have also identified Ebury Partners UK sometime in December 2016 to… Read more »

D
2 years ago

What do you think about the EUR? Sell? Hold?

Cadence
2 years ago

Wow, never knew the banks get such a big margin on exchange rates. I saw that different banks have different rates, but the difference from the cheapest bank rate and the interbank exchange rate it’s still huuuuge. Thanks for the info. It was eye opening..for me at least.

OWUSU ARTHUR
2 years ago

DEAR SIR/MADAM,
I LIVE IN DUSSELDORF AND WANT TO BECOME AN AGENT.I HAVE MY STORE OR OFFICE ALREADY TRANSFERING MONEY WITH RIA MONEY TRANSFER.I WILL BE HAPPY IF YOU REPLY ME.

ANJALI
2 years ago

PLS BALANCE SHEET PRIPRASATION

Jeff Magnes LLC
1 year ago

What is happening with the Sterling? I am following since brexit, against the dollar it is generally getting stronger until recent months, against euro it is moving up and down in the same range 1.11 to 1.15, there are contradicting projections and I am not sure whether to trade now before brexit vote in a week from now or just wait and hope for the best do you have any advice for me

Daphne 1999
11 days ago

Why don’t more currency brokers use worldfirst system? it means better rates to customers