London 15/12/2008- Some cheer at last for buyers of property in the USA – the dollar exchange rate has improved against the ailing Pound on fears of more interest rate cuts in the States.
Analysts predict that the Federal Reserve will announce an interest rate cut tomorrow evening, after their 2-day meeting today and tomorrow.
As the interest rate in the US is only 1%, further cuts will mean holding Dollar assets is even less appealing to investors, and therefore demand for the Dollar tends to fall, along with its price.
Coupled to this, the US government said it might use some funds meant for the bank bailout, to help troubled carmakers. This has led to fears that the financial sector will be left short – and these kind of worries again weaken the dollar.
At the time of writing, one Pound buys $1.50, up nearly 4c on the low of last week.
For anyone transferring funds to the USA, that means a 3% saving in a few days, in terms of the amount of sterling needed to buy a fixed number of US Dollars
Buyers should beware, however, that banks and other sources offer different rates to clients, and should therefore be cautious about accepting the first rate they are offered. By shopping around for the best rate with a reputable currency broker, significant savings can be made on overseas transfers in any currency.
