Resurgent pound leads to market revival

Monday, 01 June 2009 10:15

Foreign exchange specialist Foremost Currency Group (FCG) has reported a close to 100% increase in the amount of people registering to ‘buy’ euros and dollars since the pound began its dramatic fightback against the leading currency pair in late May. With the vast majority of its customers making international payments in order to buy overseas property, the company is speculating if this could mark a gradual return of confidence to the overseas property buying markets.

Commenting on the news, Robin McEwen, MD, said, “The pound’s recent return to form is positive news for British investors who have been looking to take advantage of deflated property markets in the US and Europe, but have so far been holding back. However, many buyers are securing the rate with a forward contract, as the pound’s underlying weakness remains and with volatility in the FX market we could see a return over the coming weeks.”

A forward contract is a specialist foreign exchange tool that allows buyers to secure a beneficial exchange rate for up to two years. It is especially useful for people making a series of staged payments towards a new build property but want to eliminate the risk presented by fluctuating exchange rates.

McEwen continues, “Unfortunately the pound’s resurgence will not be responsible for reinvigorating America and Europe’s property markets. It is a welcome short-term boost and savvy Brit buyers are taking the opportunity to snap up some bargains while the exchange rate is positive, reaching a peak for 2009 against the dollar of 1.60.”

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