This article is a guest post by foreign exchange broker Pure FX. It’s written to tell you the best time to exchange currencies, so you receive a higher euro total when you visit Tuscany with http://www.tuscanyaccommodations.org/.
Sterling flies high! It’s currently the best time to exchange pounds for euros in 7 years, thereby greatly cutting the cost of renting a Tuscany villa when you holiday in Italy. To be specific, just recently sterling reached a mighty 1.4256 against Europe’s common currency, its strongest since November 7th 2007, or a full 7 years and 4 months.
So what this means for you is that when you exchange currencies to holiday in Tuscany, you’ll receive more euros than any time since the financial crisis. To be exact, were you to exchange £1,250 to visit Tuscany, you’d now receive +€180 more now than if you’d done so 15 months ago, back at the start of 2014. Hence, we’re not talking pocket change here; with +€180 extra, you could extend your holiday in Tuscany an extra day, book a more luxurious villa with tuscanyaccommodations.com, or spend the extra cash however you like!
Sterling has risen against the euro for several reasons. Chief among these is the fact that the UK economy is growing much faster than the Eurozone’s. For instance, just today the UK’s Office for National Statistics revealed that the UK economy expanded +0.1% more than previously thought in the last 3 months of 2014, by +0.6%. This cemented the UK’s place as the fastest-growing G7 economy of last year, and so has strengthened sterling versus the euro.
At the same time, the euro has weakened tremendously in the last few months. This is because the Eurozone officially entered deflation late last year, whereby prices continually fall, threatening a spiral of economic stagnation akin to Japan in the 1990s. On top of this, the European Central Bank has launched +€1.1 trillion in emergency monetary stimulus, to bring the common currency bloc out of its negative price cycle, but simultaneously devaluing the euro, by printing so much money. Hence, the Eurozone’s dire economic fortunes have weakened the euro lately!
So, the pound has hit this 7-year high versus the euro, thanks to the UK’s economic strength, and the Eurozone’s weakness!
What’s more, looking further ahead into 2015, it may become an even better time to holiday in Tuscany from a foreign exchange point of view, if sterling continues to strengthen versus euro, as looks likely. In other words, this could make it even cheaper to book a villa with Tuscany Accommodations !
Sterling may strengthen further, chiefly because the UK’s economic comeback is forecast to continue. For instance, last month living standards in the UK rose for the 1st time since the financial crash, as wage gains outpaced inflation. To be specific, UK wages jumped +1.6% in February, according to the ONS, while inflation fell to 0.0%, meaning that Britons were better off on balance. As this trend extends, it should fuel the UK’s economic growth, thereby further lifting the pound!
Equally, the euro looks set to weaken further in 2015, making it better value for Brits to visit Tuscany. Chiefly, this is because it’s by no means guaranteed that Greece will remain part of the Eurozone by the end of this year. Greek government Syriza’s aggressive negotiating tactics have infuriated its European partners, cutting the odds that Europe will continue to fuel Greece’s bailout. Were this to come to pass, Greece would have no choice but to abandon the euro, and readopt the drachma! In turn, that would terribly weaken the credibility of the euro, weakening the currency.
So, with the pound set to strengthen versus the euro this year, how can you ensure you get the highest currency total possible when you visit Tuscany? Well, here are 10 quick tips.
1. Don’t exchange currencies at the airport. This is because you’re a captive customer at the airport, in the sense that you can’t shop around. As a result, the bureaux de change offer the worst available exchange rates, to maximise their profits. Of course, that leaves you worse off for your holiday, before you’ve even set foot in Italy!
2. Don’t exchange currencies at the last minute. This is because you’ll have no choice but to accept whatever exchange rate is available, even if it’s no good, which could potentially knock hundreds off your euro total. Instead, to ensure you buy your euros when sterling is on the rise, start to look at the foreign exchange rate as soon as you know you’re going to Tuscany!
3. Shop around before you exchange currencies. Not all bureaux de change offer the same exchange rate, meaning that the euro total you wind up with can greatly differ. To ensure you get the most euros, don’t accept the 1st exchange rate you’re offered, but compare it elsewhere, to get a sense of whether what you’re being offered is any good. Once you’ve asked in 2 or 3 places, you’ll have a better sense of what exchange rate is available.
4. Don’t pay any fees or commission. In this day and age, you shouldn’t have to pay fees or commission when you exchange currencies. If the bureau de change you’re talking to charges extra, look elsewhere; you’re being scammed.
5. Get expert advice about the exchange rate. If you’re not sure if the exchange rate is good or bad, or if it’s likely to rise or fall, then speak to the staff at your bureau de change. They’ll be able to tell you what’s influencing the pound to euro exchange rate and, without knowing for certain, what may happen next. They can also advice you whether sterling is currently strong or not.
With these tips in mind, as well as the fact that the pound has recently hit a 7-year high versus the euro, you’re all set to get a fantastic exchange rate when you visit Tuscany with tuscanyaccommodations.org . Have fun!
By Peter Lavelle at foreign exchange broker Pure FX