Money's shot - one pound to the dollar? What can you do?
If you snapped up flights to the US during the Christmas sales, here's some news that's grimmer than a wet day in Doncaster - the pound is taking one hell of a beating from the dollar right now. The reasons are many and varied, but the net effect is that if you try and exchange your money anytime soon, you're going to get screwed over:
From a high of nearly $1.65 to the pound in January, sterling dropped below $1.60 at the beginning of February, and on Monday slipped below $1.49 - suddenly you're getting $15 less per £100 compared to six weeks ago. According to business papers, key causes include the upcoming UK elections, continued economic strife and investors scrutinising the European market closer than ever since Greece blew its financial load.
That's not the worst of it. Some analysts think the UK is carrying too debt and need to reduce it immediately. Analysts being analysts, however, couldn't agree on anything if their faces were on fire; Swiss bank UBS AG has warned the pound could fall to $1.05 or lower, if the country tries to cut its debt too quickly. They're not the only ones, sadly - the Financial Times compares sterling's current problems to the situation in 1985, when the pound nearly reached parity with the dollar. Whaaaaat!
Of course it may not happen, but even the best case scenario doesn't see sterling strengthening against the dollar anytime soon. So if you're travelling to the States soon, what can you do about it?
If you're a very regular visitor to the US, you're probably already following the exchange rates and buying currency through the likes of XE.com. What if yours is a one-off visit in a couple of months? It could be worth taking a punt on a currency exchange card from the likes of FairFX. It's a Mastercard that lets you buy currency at today's exchange rate for use later on; the exchange rates are generous - FairFX beats the likes of Tesco hands down - and it's free if you add over £500 to the card. Other cards are available for free with a lower spend, but we mention FairFX because there's Quidco available too. The only downside - there's a $2 transaction fee for every cash withdrawl.