Greece's aid package approved

July 25th 2011

The big news on Thursday was the passing of the EU backed aid package for Greece, which totalled a massive €159bn. The agreement allows Greece to restructure their debt at interest rates of around 3.5% (down from over 7%) over between 15-30 years. As much as €33bn will come from private banks marking a victory for German Chancellor, Angela Merkel. Markets reacted positively on the news sending equities higher especially banking stocks. Both EUR/USD and GBP/USD surged higher on the news breaking established trading trends, which may signal a new cycle of USD weakness. With the focus away from Europe now, markets will be keen to attack resistance levels on the two currencies mentioned. USD buyers may now see opportunities to purchase at levels way above recent highs.

Information courtesy of Currencies Direct

Ebury Partner's GBP Update

January 27th 2011

The pound received a lift on Wednesday after minutes from the Bank of England's policy meeting this month showed policymakers had considered an interest rate hike, although worries about the economy checked gains. The minutes showed Bank Monetary Policy Committee member Martin Weale unexpectedly joined Andrew Sentance in voting for a quarter-point rate rise, prompting a possibility of a 0.25% rise to 0.75% in the coming months.

Information courtesy of Ebury Partners.

Thomas Cook and The Co-op merge

October 18th 2010, The Currency Exchange Site Analyst

Last week brought in the news of the merger of Thomas Cook and The Co-operative Group which created the largest network of high street travel shops in the UK. This union saw the creation of the biggest travel operation and high street foreign exchange business after the Post Office.

This non-cash merger will see the creation of a joint subsidiary with Thomas Cook and The Co-operative holding 70% and 30% stakes respectively. The alliance, expected to start operations by Christmas this year, will run 1,200 retail outlets with both brands retaining their trademark names; however, 70 Thomas Cook ‘Going Places’ shops will be rebranded as Co-operative Travel. Thomas Cook.com and Thomas Cook Tour operations will however still remain separate entities following this merger.

So come Christmas, when you start planning for your 2011 holidays and visit your local The Co-operative store, you may just be offered a Thomas Cook travel package. Good news for the traveller, who can choose from a range of 3-5 star holiday packages at a single high street location.

Nationwide’s introduces overseas charges on the use of its FlexAccount card abroad

August 3rd 2010, The Currency Exchange Site Analyst

Nationwide Building Society, providers of ‘free to use abroad’ cards, have announced new charges on overseas transactions with their FlexAccount debit cards which will come into effect from 1st November 2010. The society has decided to levy a 2% foreign exchange charge plus a £1 flat fee on cash withdrawals abroad in replacement of 1% currency-conversion charge levied at present. In exchange, nationwide is now offering FlexAccount customers free travel insurance of an estimated value of £80.

These changes in charges levied mean that from 1st November, foreign spending of £100 on FlexAccount debit card will actually cost you £102 and every ATM withdrawal will attract a £1 fee plus the foreign exchange fee. These fees are still lower than the debit card norm, where a 2.75% foreign exchange fee is levied, and ATM withdrawal fees are 2% of the withdrawal amount (usually constrained to between £1.50 - £4.50). For example, Nationwide claims that holidaymakers who make four £50 card purchases and eight £100 cash withdrawals will, after the introduction of the new charges, be billed £28, compared with £43.52 by Barclays and HSBC, £48.52 by NatWest/RBS and £49.92 by Lloyds TSB.

The Nationwide FlexAccount will still offer consumers good value for money compared to debit cards, but there are now other cards which can provide a cheaper alternative; currency cards.

These cards are typically available in Pounds, Euros and US Dollars and operate slightly differently in that they are prepaid. However, FairFX and my Travel Cash’s Pound currency cards offer a foreign exchange fee of 1.5% (lower than Nationwide’s planned 2%). ATM withdrawal fees for my Travel Cash are capped at £1, and £0 for FairFX. Nationwide’s example of four £50 card purchases and eight £100 ATM withdrawals would cost £23 with a my Travel Cash GBP card or £25 with a CaxtonFX Global Travellers Card, cheaper than Nationwide’s £28.

These cards are all powered by MasterCard, so can be used worldwide anywhere the MasterCard Acceptance mark is displayed just like a MasterCard debit or credit card. For travellers looking to get the best deal on their travel money, currency cards now offer a more attractive package than Nationwide’s FlexAccount. To find out more visit our currency card comparison pages

The Post Office helps you save money on your travel cash

June 17th 2010, The Currency Exchange Site Analyst

Anybody in possession of a Post Office credit card will be eligible for a waiver of the standard 2.5% cash advance fee when purchasing foreign currency from the Post Office with the Post Office Credit Card. This waiver is in addition to the already existing 0% commission on all overseas purchases and 0% interest for the first 12 months on balance transfers and first three months of purchases. Many other credit card providers charge up to 3% for buying foreign currency, so this exemption can save you money this summer.

This announcement follows a recent news release by the Post Office which highlights the disadvantages in leaving your money to the last minute. A Post Office survey indicated that by changing travel money at the last moment, at airport bureaux de change or using your UK credit or debit cards to withdraw money overseas, could cost you significantly more due to poor exchange rates, commission fees or cash withdrawal fees. In addition they found that many high street bureau de change and banks did not stock all currencies, even the 12 most common currencies. Euros and Dollar were easily available but 75% of the ten remaining currencies required pre-ordering for collection forcing last minute travelers to use cards abroad or pay over the odds at the airport.

For more information on the fees associated with using your UK credit and debit cards abroad, take a look at our blog cost to use your UK cards abroad

Uncertainty in UK government, uncertainty in the pound

May 11th 2010, The Currency Exchange Site analyst

The pound is still down against most major currencies, as uncertainty over the UK government continued. However, despite a brief decline versus the euro the pound is still up against the euro, with a current exchange rate of €1.164. This is despite gains in the Euro after the EU and IMF made clear moves towards addressing the debt crisis with the Eurozone. The EU and IMF have agreed to offer up to € 750bn in loans and guarantees to fiscally troubled Eurozone countries.

Since the general election the pound has been fluctuating against other currencies as negotiations between Labour, Liberal Democrats, and the Conservatives continue. The Liberal Democrats recent announcement that a deal is likely to be made within the next 24 hours is likely to bring an end to this fluctuation. The markets response to this announcement is expected to be a weakening of the pound if a Labour – Lib Dem union is reached. However, it will be how this new coalition plays out in government and tackles the UK budget deficit that will dictate the pounds strength over the coming months.