Imagine you could switch on the news one evening and learn both:
1.The reason the price of milk had increased the past month.
2. How it was likely to change in coming months.
Wouldn’t that be worth doing? Of course, for most things we buy this isn’t really possible. There are influences like grain prices and import costs, but for the most part these are beyond our control. However, just because you can’t use the news to stock up on canned goods, doesn’t mean it can’t help with other things. Regarding your foreign exchange transactions for instance, watching the news is an invaluable way to find out what’s influencing the rates.
Foreign exchange and the evening headlines
Imagine for example that a couple is planning to buy a second home on the coast of Spain. They have the place picked out, and it has a swimming pool and bright sunshine nine months out of twelve. Perfect. It’s just a matter of closing the deal and changing currencies. But instead of researching the rates, the couple contact the local bank. So they don’t learn, for instance, that unemployment in the United States has just fallen 2.0%. This has sparked huge risk appetite on the foreign exchange market and boosted the euro. And they don’t learn that a European Central Bank loan scheme has relieved market pressure regarding European debt. This has aided the euro again. So the rate they get isn’t a good one.
Getting ahead of the foreign exchange game
To keep ahead of the game then, it’s a great idea to keep up with what’s happening in the news. Countless millions of investors trade currencies around the clock after all, and are influenced by political and economic events. So if something is important enough to make the headlines, chances are it’s important enough to impact the foreign exchange market. That could affect the value of sterling, and hence the rate you get when you change currencies. In addition of course, there is an easier way. Instead of keeping your eyes glued to the news, you can contact a foreign currency exchange broker to watch the headlines for you. So if you’re emigrating to Spain for instance, they can get in touch when your ideal rate becomes available. Saving you all the hard work.