Sterling’s shocking slide

13 March 2009

The UK pound has slumped in value against major currencies over the past couple of years, collapsing by a hefty 33.31% against the euro and 36.25% against the US dollar in just under two years, according to currency firm, FC Exchange.

The biggest drop has been against the US dollar, followed closely by the United Arab Emirates Dirham, posting a 36.21% fall and then the euro. However, the drops were not quite so severe against the New Zealand dollar, the Canadian dollar and the Australian dollar, falling a mere 19%, 25% and 27% respectively.

Nevertheless, the slump in sterling has been disastrous for Brits buying property abroad, as it has hiked up purchasing costs, and offset against the opportunity to take advantage of declining property prices.

Nick Fullerton, MD of FC Exchange comments: “New Zealand, Australia and Canada are the three countries that still represent excellent value for money and aren’t as in the thick of a recession as the UK and US. However, it seems people can’t be swayed away from local destinations - considering the large percentage drop between sterling and euro, this is still the most dominant currency pairing for us.

“The only way to try and rein in some control over the volatility of the markets is by utilising a forward contract - we’ve noticed a 44% increase in the last six months in clients booking them than the previous six months to that. Since Sterling has started to behave more sporadically, people seem to be becoming more financially savvy with how to get the most for their money when changing currencies”.

Today, sterling is currently at $1.40 against the US dollar, and €1.09 against the euro.