Foreign Currency – UK Companies Plan for Growth

With several UK companies stating that they are putting the recession behind them, are there implications for the value of foreign currency as many businesses turn towards Forex trading to expose themselves to profit opportunities that are a result of market fluctuations.

Large UK businesses are bound to be upbeat about their own performances and confident about their futures. A number of Plcs have recently announced results alongside plans for growth and predictions about the UK private sector coming out of recession. That’s great news if it’s correct, and a stronger UK economy should have an effect on the foreign currency markets.

No Double Dip for Foreign Currency?

Sir Terry Leahy, the Chief Executive of Tesco said that he didn’t believe the UK economy was heading for a “double dip”, where a slight recovery is followed by another economic lull. Many other business leaders agree with him, but as always, there are opposing views. Some economists are worried about the possible effects of public sector spending cuts after the election. It’s clear that whoever is in government after the election will need to make cuts in public sector spending in order to reduce the huge deficit faced by the UK after the banking crisis. Because a large number of private companies work closely with the public sector, there is a possibility that they will struggle if business no longer comes there way. That means that some sectors may well see a double-dip effect. As far as foreign currency is concerned, a renewed vitality in the UK economy will help sterling to recover against the US dollar and the Euro, which may be good news for travellers and those with properties overseas.

Keeping an Eye on Foreign Currency

If you’re heading overseas later in the year, or you have investments, particularly property, that are costing you more than you anticipated because of current foreign currency exchange rates, it’s worth paying attention to what UK businesses are saying about the economy and their position in it. You may also want to wait until the result of the general election is clear so that you can see what effect it has on foreign currency markets, or you might want to talk to an independent broker who has the expertise to judge when it’s a good time to buy the foreign currency you need.