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 exchange rates today that you can possibly achieve for bank-to-bank transfers.
This comprehensive guide will provide the current foreign exchange rates (bank transfers) 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 exchange 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 Foreign Exchange Rates for International Bank Transfers
If you are looking to make a large international money transfer please view our list of best international money transfer companies by overall rating below. This list integrates many other considerations that are supplementary to the best exchange rate for bank to bank transfers. For example, these companies offer dedicated dealer support that will help you better time your overseas transfer, and result in potentially achieving optimal the optimal rates.
Our Top 6 Rated Companies, Updated for: August 2021
Approximate Best Exchange Rates vs Bank Exchange Rate
Interbank exchange rate*
High Street Bank Rate (Estimated) **
Recommended Provider Rate (Estimated) ***
Pound to Euro
1.1364 EUR to 1.1481 EUR
1.1598 EUR to 1.1657 EUR
Euro to Pound
0.8280 GBP to 0.8365 GBP
0.8451 GBP to 0.8493 GBP
Pound to Dollar
1.3491 USD to 1.3630 USD
1.3769 USD to 1.3839 USD
Dollar to Pound
0.6974 GBP to 0.7046 GBP
0.7118 GBP to 0.7154 GBP
Pound to Australian Dollar
1.8368 AUD to 1.8557 AUD
1.8908 AUD to 1.8841 AUD
Australian Dollar to Pound
0.5123 GBP to 0.5175 GBP
0.5228 GBP to 0.5255 GBP
Pound to Swiss Franc
1.2221 CHF to 1.2347 CHF
1.2473 CHF to 1.2536 CHF
Pound to Hong Kong Dollar
10.5969 HKD to 10.4888 HKD
10.7051 HKD to 10.7591 HKD
Pound to UAE Dirham
4.9552 AED to 5.0063 AED
5.0574 AED to 5.0830 AED
Pound to Singaporean Dollar
1.8259 SGD to 1.8447 SGD
1.8636 SGD to 1.8730 SGD
2 – 3% Currency Spread
1% to 0.5% Currency Spread
* Current rates provided to us by external provider, updated hourly. ** Represeting a 2%-3% bank margin, which is the average bank margin in the UK for internaional currency exchanges based on our indepedent research. *** Representing a margin of 0.5% to 1% which is the average margin our recommended providers charge for large transfers (£10,000 and up).
Best Exchange Rates for Smaller Bank Transfers
If you are looking to make a small payment online, or send remittances, then you should consider using Wise (formerly TransferWise) because they have fixed GREAT fx exchange rates (whereas other companies have a system in place in which larger transfers get bigger discounts).
Wise Money Transfer Fees / Exchange Rates
Wise.com Fee 2021 Updated
0.32% – 0.45%, depending on amount sent + $ 0.66 AUD fixed payment fee./p>
2.55-2.6%, depending on the amount sent + R$ 1.48 BRL fixed payment fee.
0.46% – 0.59%, depending on the amount sent + $ 1.77 CAD fixed payment fee.
0.3% – 0.43%, depending on the amount sentr + 0.58 CHF fixed payment fee.
0.33% – 0.45%, depending on the amount sent + Kč 6.50 CZK fixed payment fee.
0.31% – 0.44%, depending on the amount sent + kr 2.32 DKK
0.28% – 0.41%, depending on the amount sent + € 0.50 EUR fixed payment fee.
0.63% of the amount that’s converted + ¥ 63.00 JPY fixed payment fee.
0.35% – 0.49%, depending on the amount sent + $ 2.05 NZD fixed payment fee
0.66% Fee + ₺ 10.57 TRY fixed payment fee
0.31% – 0.41%, depending on the amount sent + $6.25 USD fixed payment fee
Best Exchange Rates for Businesses and Online Sellers:
WorldFirst‘s new pricing initiative, starting from August 2019 and effective currently is as follows:
FX rates of 0.15% to 0.5% less than the inter-bank currency rate, for ALL CURRENCIES.
No wire fees.
No hidden fees, and absolute clarify on what you’re paying in fees.
WorldFirst handles international bank to bank transfers exclusively.
Bottom line: This is the best FX exchange rate for bank transfers, based on our comprehensive comparison of 60+ providers. Please note the offering is strictly for business clients.
Current Best Forex Rates for Bank Transfers – WorldFirst*
Interbank exchange rate*
Your average bank’s rate ****
WorldFirst’s best rate (large transfes)**
WorldFirst’s min. rate***
Pound to Euro
Euro to Pound
Pound to Dollar
Dollar to Pound
Pound to Australian Dollar
Australian Dollar to Pound
Pound to Swiss Franc
Pound to Hong Kong Dollar
Pound to UAE Dirham
Pound to Singaporean Dollar
2 – 5% Currency Spread
0.15% Currency Spread
0.5% Currency Spread
The advantages of using WorldFirst’s service for international bank transfers for your business –
Immense saving against banks.
Fully transparent, clear, and cohesiveness pricing.
*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 transferring more than £5m annually.
*** WorldFirst’s Min. Rate represents a 0.5% spread for businesses 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
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 business bank transfers of all sizes above its minimum requirement of £1,000.
WorldFirst accepts only corporate and e-commerce 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.
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
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 1.8936 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 185,572.1713 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 3,787.1872 AUD.
Why wasn’t I aware of this before when enquiring about the best exchange rates for international transfers?
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.
Realistic expectations and some industry benchmarks for the best bank transfer foreign exchange 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 international 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 international 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).
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.
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:
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 bank transfer 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.
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 exchange 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.
Current Pound to South African Rand Rate: 1 Pound is
10,000 Pounds are R203,263.4305 ZAR
Current Pound to New Zealand Dollar Rate:
1 Pound is $1.9961 NZD
10,000 Pounds are $19,961.2516 NZD
Less Common Currencies Pairings – From GBP
Pound to Canadian Dollar Rate: 1 Pound is $1.7349 CAD.
Pound to Israeli New Shekel Rate: 1 Pound is ₪4.4940 ILS.
Pound to Hong Kong Dollar Rate: 1 Pound is $10.8132 HKD.
Pound to United Arab Emirates Dirham Rate: 1 Pound is 5.1085 AED.
Pound to Brazilian Real Rate: 1 Pound is R$7.2470 BRL.
Pound to Argentine Peso Rate: 1 Pound is $134.6371 ARS.
Pound to Mexican Peso Rate: 1 Pound is $27.6374 MXN.
Pound to Chinese Yuan Rate: 1 Pound is ¥8.9895 CNY.
Pound to Indian Rupee Rate: 1 Pound is R103.4815 INR.
Common Currency Pairs – From EUR
Current Euro to Pound Rate:
1 Euro is £0.8536 GBP
10,000 Euro are £8,535.8638 GBP
Current Euro to US Dollars Rate:
1 Euro is $1.1872 USD
10,000 Euros are $11,871.8881 USD
Current Euro to Australian Dollars Rate: 1 Euro is
10,000 Euros are A$16,163.4569 AUD
Current Euro to Japanese Yen Rate:
1 Euro is ¥130.2097 JPY
10,000 Euros are ¥1,302,096.8129 JPY
Current Euro to South African Rand Rate:
1 Euro is R17.3503 ZAR
10,000 Euros are R173,502.8956 ZAR
Current Euro to New Zealand Dollar Rate:
1 Euro is $1.7039 NZD
10,000 Euros are $17,038.6525 NZD
Less Common Pairings – From Euro
Euro to Canadian Dollar Rate: 1 Euro is $1.4809 CAD.
Euro to Israeli New Shekel Rate: 1 Euro is ₪3.8360 ILS.
Euro to Hong Kong Dollar Rate: 1 Euro is $9.2300 HKD.
Euro to United Arab Emirates Dirham Rate: 1 Euro is 4.3605 AED.
Euro to Brazilian Real Rate: 1 Euro is R$6.1860 BRL.
Euro to Argentine Peso Rate: 1 Euro is $114.9244 ARS.
Euro to Mexican Peso Rate: 1 Euro is $23.5909 MXN.
Euro to Chinese Yuan Rate: 1 Euro is ¥7.6733 CNY.
Euro to Indian Rupee Rate: 1 Euro is R88.3304 INR.
Common Currency Pairs – From USD
Current US Dollar to Euro Rate:
1 US Dollar is €0.8423 EUR
10,000 US Dollar are €8,423.2600 EUR
Current US Dollar to Pound Rate:
1 US Dollar is £0.7190 GBP
10,000 US Dollars are £7,189.9800 GBP
Current US Dollar to Australian Dollars Rate:
1 US Dollar is A$1.3615 AUD
10,000 US Dollars are A$13,614.9000 AUD
Current US Dollar to Japanese Yen Rate:
1 US Dollar is ¥109.6790 JPY
10,000 US Dollars are ¥1,096,790.0000 JPY
Current US Dollar to South African Rand Rate:
1 US Dollar is R14.6146 ZAR
10,000 US Dollars are R146,146.0000 ZAR
Current US Dollar to New Zealand Dollar Rate:
1 US Dollar is $1.4352 NZD
10,000 US Dollars are $14,352.1000 NZD
Less Common Pairings – From USD
US Dollar to Canadian Dollar Rate: 1 US Dollar is €1.2474 CAD.
US Dollar to Israeli New Shekel Rate: 1 US Dollar is ₪3.2312 ILS.
US Dollar to Hong Kong Dollar Rate: 1 US Dollar is $7.7747 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$5.2106 BRL.
US Dollar to Argentine Peso Rate: 1 US Dollar is $96.8038 ARS.
US Dollar to Mexican Peso Rate: 1 US Dollar is $19.8712 MXN.
US Dollar to Chinese Yuan Rate: 1 US Dollar is ¥6.4634 CNY.
US Dollar to Indian Rupee Rate: 1 US Dollar is R74.4030 INR
Common Currency Pairs – From AUD
Current Australian Dollar to Euro Rate:
1 Australian Dollar is €0.6187 EUR
10,000 Australian Dollar are €6,186.7953 EUR
Current Australian Dollar to Pound Rate:
1 Australian Dollar is £0.5281 GBP
10,000 Australian Dollars are £5,280.9642 GBP
Current Australian Dollar to US Dollar Rate:
1 Australian Dollar is$0.7345 USD
10,000 Australian Dollars are $7,344.8942 USD
Current Australian Dollar to Japanese Yen Rate:
1 Australian Dollar is ¥80.5581 JPY
10,000 Australian Dollars are ¥805,580.6506 JPY
Current Australian Dollar to South African Rand Rate:
1 Australian Dollar is R10.7343 ZAR
10,000 Australian Dollars are R107,342.6907 ZAR
Current Australian Dollar to New Zealand Dollar Rate:
1 Australian Dollar is $1.0541 NZD
10,000 Australian Dollars are $10,541.4656 NZD
Less Common Pairings – From AUD
Australian Dollar to Canadian Dollar Rate: 1 Australian Dollar is €0.9162 CAD.
Australian Dollar to Israeli New Shekel Rate: 1 Australian Dollar is ₪2.3733 ILS.
Australian Dollar to Hong Kong Dollar Rate: 1 Australian Dollar is $5.7104 HKD.
Australian Dollar to United Arab Emirates Dirham Rate: 1 Australian Dollar is 2.6978 AED.
Australian Dollar to Brazilian Real Rate: 1 Australian Dollar is R$3.8271 BRL.
Australian Dollar to Argentine Peso Rate: 1 Australian Dollar is $71.1014 ARS.
Australian Dollar to Mexican Peso Rate: 1 Australian Dollar is $14.5952 MXN.
Australian Dollar to Chinese Yuan Rate: 1 Australian Dollar is ¥4.7473 CNY.
Australian Dollar to Indian Rupee Rate: 1 Australian Dollar is R54.6482 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.
Future Prospects and Predictions for Pound vs Euro
Money Transfer Comparison’s authors and editors do not have a positive outlook for the UK even after its decision to leave the EU ended up in agreement as opposed to a no-deal brexit that was feared. 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), and its trade balance will certainly suffer in the immediate term, or at least won’t gain anything as compared to the past.
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 remained on track to miss its 1.3% growth target for 2019 (GDP data to be released shortly), and that was pre-covid which had a dire impact on UK’s trade (as well as global trade as a whole).
In short, finding the best Pound to Euro exchange rate may have already passed with the conservative win election gains already retreating, and then the rally from Dec 2020 to March 2021 which has since shrieveled.
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.
2020 – Covid year, Brexit Agreed – not seeing the pre-Brexit Pound ever again?
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. Sterling hit its lowest-ever rate against the Euro early in the year because the market were predicting no trade deal will be signed.
It was a last ditch effort to finalise a brexit agreement but it finally go through just before the end of 2020, at the end of the very year that change the face of the world and made markets go crazy, and it was expected the Sterling will jump significantly.
The GBPEUR rate shot up significantly from December to March 2021 but the rally did not sustain and the Pound Sterling is trading at approximately the same levels it was ever since 2016 i.e. the 1.1 to 1.18 range against the Euro.
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
The 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. Even after a Brexit agreement was formed after the 2020 pandemic year, the markets were still hesitant to believe the United Kingdom and the Pound Sterling will ever go back to their glory days.
Those who require GBP to EUR, GBP to USD, GBP to AUD or any other currency exchange from Pound Sterling should not look at this long 22 year history and even imagine that the exchange rate would ever be this high. The key to finding the best exchange rate for international transfers is to look at recent 12 months history and understand the trendline, because it is almost impossible to predict events like Brexit and the agreement thereafter.
Money Transfer Comparison’s authors and editors still believe in a strong American economy in spite of some market turbulence in 2019 and the March-April market dip of 2020 due to COVID, but that does not necessarily mean a strong dollar. The DXY (dollar exchange rate against major currencies) has been down throughout 2020 other than when it crawled up in a frightening pace while the USA economy faced one of its biggest challenges in a 100 years. Wth looming inflation, growing US and China trade war, and asset bubble only a fool would put a predication on the future of the Mighty Greenback.
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 an even scarier rate than 2017 and 2018.
With that, we would say that the Pound Sterling is generally on the downturn and the fact it was hit so badly with COVID and restrictions were on for so long did not help restore investors’ confidence in it.
Considering all of the above it will make sense for the US dollar vs Pound exchange rate to improve (dollar appreciating), and hence today might be the best exchange rate for international transfers from Sterling to USD.
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.
August 2019 onwards: slight recovery for Sterling, crash, and more recovery
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 2019. But ended the year stronger, fluctuating between 1.30-1.35 throughout December 2019.
Then Covid happened and the GBP to USD foreign exchange rate was at its worst at years touching 1.15, the brexit agreement was announced, and the USD remained low helping the rate to reach almost its pre-brexit level at 1.39 in May 2021 (it was 1.44 on April 2016 shortly before the referendum).
April 2018 to August 2019: Sterling slips back to lows
The 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
Sterling 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.
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
The 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.
Below, we will provide a list of the best exchange rates in history to give some perspective.
The best GBP to EUR exchange rate in history was 1.75 in May, 2000.
The best EUR to GBP exchange rate in history was 0.97 in December, 2008.
The best GBP to USD exchange rate in history was 2.64 in March, 1972.
The best USD to GBP exchange rate in history was 0.95 in February, 1985.
The best EUR to USD exchange rate in history was 1.59 in April, 2008.
The best USD to EUR exchange rate in history was 1.21 in October, 2000.
The best GBP to AUD exchange rate in history was 3.03 in September, 2001.
The best AUD to GBP exchange rate in history was 0.78 in October, 1976.
The best EUR to AUD exchange rate in history was 2.07 in December, 2008.
The best AUD to EUR exchange rate in history was 0.85 in August, 2012.
The best USD to AUD exchange rate in history was 2.07 in April, 2001.
The best AUD to USD exchange rate in history was 1.48 in March, 1974.
The best GBP to JPY exchange rate in history was 1014.1 in March, 1962.
The best USD to JPY exchange rate in history was 359.8 in July, 1970.
The best AUD to JPY exchange rate in history was 402.97 in July, 1970.
Best Exchange Rates in History Table
Summary – discovering the best exchange rates
The foreign exchange interbank rate is the official rate banks use when trading currencies with each other.
A bank’s international foreign exchange rates made available to clients (“buy rate” and “sell rate”) are not the current interbank rates. Alas, they contain a built-in spread which represent a large invisible fee.
Banks’ fx rates for bank to bank transfers can be 2.5% worse than the interbank fx rate.
The best exchange rates for internaitonal money transfers 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 for businesses only.
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