So I’m about to go on holiday later this week and I’m back in the game of exchanging my foreign currency. I’m definitely getting more than I got earlier this year but other than my foreign currency costs, how does the strength of the Pound affect me?
And this is a question that a lot of my friends ask – what does it matter if the rate of the Pound goes up or down? It’s all very well and good talking about it in terms of the national economy but what is the physical impact on me? Is it going to affect my day-to-day life?
And the answer is – yes! (as if you didn’t see that one coming)
Firstly – the one most people think about – if the Pound strengthens against other currencies, then so does your buying power when it comes to foreign goods.
Buying from that specialist american candy store? Buying your Bioderma from a French Pharmacy? A stronger pound means that foreign products are going to be cheaper.
So if you’re going on holiday, you could justify that extra glass of sangria because you’re getting more foreign currency for the same amount of pounds.
Not impacting you enough? Okay, new angle. Do you drive? Do you take buses or taxis? Do you shop online? All these are ultimately impacted by the cost of petrol and the price of petrol is set in US Dollars – therefore the exchange rate between the Pound and the Dollar is going to impact how much petrol we can get for our buck. Starting to hit a bit closer to home now?
If the Pound decreases in value, we get less dollars for our pounds – therefore petrol becomes more expensive. And even if you don’t drive, you could still be affected. Not only does this impact us at the pumps, but the chain of costs will impact deliveries, shops and ultimately you – the consumer.
So next time you hear conversation on falling performance of the euro, the dollar or the pound – perhaps you’ll be able to contribute an insightful comment? Bioderma is an essential you know..
Finally – just to wrap it all up in a completely non-related but amazingly cute way. Here’s a bunny sitting on some cash. Seriously, WHO TAKES THESE PHOTOS?!!
GOING ON HOLIDAY? Don’t forget to check out my Travel Money Tips