UK expats take advantage of weak sterling

  • Share via facebook
  • Tweet this
  • Bookmark and Share
EXCHANGE SPIKE: Dirham trades flowing back to UK after election seen up by 40%, according to First Rate FX.
<br></br>

EXCHANGE SPIKE: Dirham trades flowing back to UK after election seen up by 40%, according to First Rate FX.

UAE-based British expats took advantage of the drop in sterling in the days following the UK election, as the number of dirham trades flowing back to the UK rose by over 40 percent in two days, a London-based currency exchange said.

“Since the election we have definitely seen a significant increase in expats sending their funds back home to the UK. The amount of trades which bought GBP against the AED increased over 40 percent in the two days following the election result,” according to Chris Canning, account manager at currency exchange company First Rate FX in London.

Following the hung parliament result in the May 6 UK general election, the sterling pound fell just over 3.5 percent overnight and at its lowest it was trading at AED5.35 against the UAE dirham.

“These were the lowest trading levels in over a year,” said Canning.

Sterling dropped against most of the major global currencies, especially the US dollar, which the UAE dirham is pegged to.

“This fall in rates made it very attractive to lock-in the exchange rate for the coming year. We saw a significant increase in clients booking regular payments at a fixed exchange rate for transferring their dirham earnings back to the UK,” added Canning.

Canning said it was difficult to make predictions of how the market would react in the short term.

“Long term projections from the major banks see the Pound eventually picking up to AED5.75 levels but this may not be for six to twelve months. This is still way below the exchange rates of AED6 and above which were experienced at the end of 2009,” said Canning.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Saudi Arabia accelerates reform push with market opening

Saudi Arabia accelerates reform push with market opening

Stock market move follows labour market reforms and a new mortgage...

Is $50bn wipeout enough to trigger UAE market changes?

Is $50bn wipeout enough to trigger UAE market changes?

That sum is the value wiped off the Dubai and Abu Dhabi stock...

Blood on the bourse floor

Blood on the bourse floor

Arabtec’s share price collapse was the catalyst for a huge sell...

Most Discussed