2018 British Pound Forecast
Forecasts for the pound (GBP USD) in 2018 is different from bank to bank and varies in terms of timings. This article takes a look at the general trend in GBP USD forecasts and how it might impact your overseas money transfers, travel money and spending power.
Bumpy Ride Continues
The Great British Pound (GBP or Pound Sterling) is slowly gaining since hitting 31-year lows in October 2016, but it’s been a bumpy ride. This year, most bank analysts predict the pound sterling to remain flat – basically unchanged from current levels or a tad bit higher. Currently the GBP is just shy of 1.4100, nearly the highest level in one and a half years.
How Does This Impact My Overseas Money Transfers?
If you’re looking to transfer money overseas, it really depends on the destination you’re moving your money across to. Generally speaking, a weaker GBP means it will be more expensive to transfer money overseas.
Check out the forecasts below for the average exchange cross rates expected in 2018 for the top 3 money transfer destinations:
Major banks are divided on how the GBP EUR will move in 2018. Most are expecting the rate to improve by the end of 2018. Some are forecasting a greater bounce to 1.200, while others think the rate will remain around 1.145, or unchanged from current levels.
Exiap Says: A weaker GBP means it’ll be more expensive for you to convert your Pounds to Euro’s if you’re thinking of sending money or travelling to other cities in Europe.
The GBP AUD exchange rate is set to rise near term according to major banks. Longer term isn’t as clear. It looks like most banks expect the GBP AUD rate in 2018 to move between a 1.600-1.850 range, similar to 2017, but perhaps with a few more bumps.
Exiap Says: A weaker Pound relative to Australian Dollar means costs will be more expensive when you need to send money to your family/friends or employees in Australia.
The GBP NZD exchange rate is expected to rise from current levels of 1.925 in the short term according to most financial institutions. Longer term outlooks suggests the GBP NZD cross rate will improve towards 2.100 or could spike even higher to 2.300.
Exiap Says: A stronger Euro relative to the Australian Dollar means you can spend more Aussie dollars while you’re holidaying in Australia or moving money across.
It’s not really a good time for Brits to go abroad, but if the pound does improve slightly in 2018 it might be ok to do some summer travel.
Holidays in Europe and elsewhere are currently still painfully expensive, which means the idea of a staycation holiday closer to home might be more tempting during the winter months.
Foreign tourists visiting the UK will benefit from a weak GBP. So UK tourist attractions and anything associated with the leisure industry, such as restaurants and hotels should do well.
What if I’m an Expat or Pensioner?
A weaker pound is disastrous for British people living abroad. Many who have moved overseas will see a dramatic fall in spending power. The the GBP could improve in 2018, but the outlook is uncertain.
For pensioners, many who have retired abroad will see a dramatic fall in the spending power of any UK state or private pension income with a weaker sterling.
A couple years ago £100 pounds would have gotten you $200 in Australia, one of the most popular retirement destinations for British expats. But now the same £100 pounds of income will only return $172 Australian dollars, almost 15% less.
If you’re in a hurry to sell your UK asset, such as a house or company, to support your lifestyle overseas, you might get more interest from foreign buyers with a weaker pound. While you’ll get more demand for your asset, you might not get the value you want from the sale.
It might not be a great time to be an expat, but you can manage and maximise your money transfers abroad by looking at different options. Check out TheCurrencyShop’s currency calculator for the best rates from different money transfer providers.