I personally believe once of the biggest drivers for exchange rate movement this year has been the race between the UK, US and the Euro zone as to who will raise interest rates first. At the beginning of the year the UK looked the strongest with economic figures showing a marked improvement however recently inflation has climbed along with unemployment changing the growth forecast in the UK and therefore weakening the likelihood of a rate increase.
The Euro zone has recently become the clear favourite and many are expecting a rise as soon as next week which in turn has strengthened the euro to the strongest rate against sterling for nearly 6 months. This has been down to continue growth in the largest countries and rising inflation as prices worldwide continue to climb. Next week could see rates improve further for the euro so anyone with a GBPEUR or USDEUR may wish to avoid the risk of further losses.
On the other side of the coin you have Portugal as mentioned in Jonny’s blog below that could raise risks across the Euro zone and could push back a rise for yet another year. Either way I cannot stress the importance of using a broker over the bank on all money transfers. They can normally provide savings of up to 4% and can help you time the exchange you need to maximise the exchange rate.