Monthly Update On Foreign Exchange Markets

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Monthly Update On Foreign Exchange Markets

RegencyFX give their monthly update on developments in the foreign exchange markets together with an indication of expectations going forward. In August, we witnessed several notable events and developments that impacted the foreign currency market.

The US dollar strengthened against all major currencies in August as investors sought the safety of the US currency amid concerns about the global economic outlook. The dollar index, which measures the value of the dollar against a basket of six major currencies, rose by 1.5% in August.
The Euro weakens on concerns about the European economy. The euro weakened against the dollar in August as concerns about the European economy grew. The Eurozone economy is facing headwinds from a number of factors, including the war in Ukraine, rising energy prices, and the ongoing COVID-19 pandemic.
The yen weakens to a 20-year low against the dollar. The Japanese yen weakened to a 20-year low against the dollar in August as investors bet that the Bank of Japan (BoJ) will continue to pursue a loose monetary policy despite rising inflation. The yen is also being weighed down by the ongoing trade war between China and the United States.
The British pound strengthened on strong economic data. The British pound strengthened against the dollar in August, boosted by strong economic data from the UK. The UK economy grew by 0.5% in the second quarter, beating expectations. The pound is also benefiting from the Bank of England’s (BoE) plans to raise interest rates.
The Chinese yuan weakens on concerns about the property sector. The Chinese yuan weakened against the dollar in August as concerns about the country’s property sector grew. The property sector is a major driver of the Chinese economy, and its problems could have a knock-on effect on the rest of the economy.

Overall, the currency market was volatile in August as investors weighed the risks and opportunities presented by the global economic outlook. The US dollar remained the safe-haven currency of choice, but other currencies also saw some strength, depending on their individual economic and political circumstances.

Key factors that influenced the currency market in August:

The war in Ukraine The war in Ukraine weighed on the global economic outlook and led to safe-haven flows into the US dollar.
Rising inflation. Rising inflation in the United States and other major economies led to expectations of higher interest rates, which also supported the dollar.
The Chinese property sector Concerns about the Chinese property sector weighed on the yuan.
The UK economy Strong economic data from the UK boosted the pound.

The currency market is expected to remain volatile in the coming months as investors continue to assess the risks and opportunities presented by the global economic outlook.

Currency ranges in August

GBP/EUR

High: 1.1711 on August 9, 2023.

Low: 1.1579 on August 7, 2023.

GBP/USD

High: 1.2760 on August 22, 2023.

Low: 1.2580 on August 29, 2023.

GBP/AUD

High: 1.9968 on August 19, 2023.

Low: 1.8020 on August 17, 2023.

EUR/USD

High: 1.1004 on August 11, 2023.

Low: 1.0803 on August 29, 2023.

If you have any questions about international payments or would like a free, no-obligation quote, the team at Regency FX would love to hear from you.

Moving Abroad Checklist

Initial Considerations

Will your partner be travelling with you?

If so, what will they be giving up in your present home and will they be able to continue with their career in your new home? You will need to check whether a separate visa is required for your partner to work or if your visa gives that right. If they are unable to work you will need to decide on the effect on your finances and what alternatives are available to give a fulfilling life (home business, training, voluntary work).

Are you taking family with you?

Moving with family raises many exciting opportunities, but also can create challenges. The HSBC Expat Explorer survey indicates that expat kids can take six months to settle in to their new country (see article). Getting young or even older children to prepare to move and leave their friends and family behind can be a challenge and should be thought through.

The options for education is another area that needs to be thought through.

Moving your child to a new country with a different education system can be a great opportunity to broaden their experience, but if they are close to key exams the timing can make this inadvisable. If you do take your family with you, it is important to decide between joining the local school system or choosing an international school.

Where will you be living?

Whether you will be living in a house or apartment, furnished or unfurnished, these decisions will affect what you need to take with you. The time you are planning to live overseas will also affect whether you should leave your property at home empty, rent it out or sell it. See the article Sell, Store or Ship.