Currency Exchange: GBP Rising vs USD, Falling vs EUR

The British pound (GBP) has been behaving differently in the foreign exchange market lately. It is stronger against the U.S. dollar (USD), but weaker against the euro (EUR). These changes can impact people and businesses involved in currency exchange. This might affect sending money internationally as well as making trade and investment decisions.

Why is the British Pound Strengthening Against the U.S. Dollar?

As of March 12, 2025, the GBP/USD exchange rate was around 1.2963. This is an increase from 1.2168 in January. Several economic and market factors contributed to this rise in value:

• U.S. Trade Policies – The new tariffs from the U.S. have made people worried about the economy. This makes investors feel less confident in the local currency and causes the exchange rate for USD to decrease.
• Market Uncertainty & Recession Risks – Many experts think the U.S. economy may slow down. This could make the dollar less appealing to investors.
• Interest Rate Outlook – The Federal Reserve has indicated that it will carefully consider any interest rate increases. This holds back the dollar’s chances to rise in value.

GBP to USD Exchange Rate Movements

If you are making an international money transfer to the U.S., you will receive more dollars for each pound you send. However, if you want to change dollars back to pounds, it could cost you more since the dollar is weaker now.

Why is the British Pound Falling Against the Euro?

The pound has become stronger than the dollar. However, it has lost value against the euro. On March 12, 2025, the GBP/EUR exchange rate was 1.1906. This is lower than the 1.2120 from February. This change mainly comes from:

• Eurozone Economic Stability – Recent policy changes in major EU countries have boosted investor confidence in the euro.
• Bank of England vs. European Central Bank (ECB) Policies – The ECB has made more adjustments to interest rates than the Bank of England. This has contributed to the euro becoming stronger.
• Brexit-Related Trade Frictions – Ongoing discussions about trade problems between the UK and the EU continue to impact the pound’s value.

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GBP to EUR Exchange Rate Movements

If UK businesses or people are making international bank transfers to the Eurozone, a weaker pound means they receive fewer euros for each pound they exchange. However, those sending money from Europe to the UK may benefit from a stronger euro.

How Do Currency Exchange Rates Impact International Money Transfers?

Changes in exchange rates can impact how much money transfers cost. This is very important for people sending large sums of money to other countries. When the pound is strong against another currency, you get more value for your money. However, if the pound weakens, you will receive less in foreign currency.

Key things to consider when sending money to another country: using online banking:

• Transfer Fees – Each provider has its own fees. These fees change based on the size of the transaction, the recipient’s bank code, and where it’s going.
• Exchange Rate Margins – Banks and currency brokers often add extra costs to the average currency exchange rates. This means the recipient may not get the full amount of money.
• Speed of Transfer – Some transactions can clear by the next working day. Others could take several days. This depends on the method used, like a bank transfer, debit card, or an app.
• Estimated Arrival Time – How fast the funds arrive depends on the provider and the recipient’s bank account number.

How to Get the Best Currency Exchange Rate

To get the best out of international transfers, consider these tips:

1. Compare Providers – Different platforms charge different rates. Some focus on big transfers that have low fees.
2. Use a Currency Account – If you send or receive foreign payments a lot, a multi-currency account can help you save money on conversion fees.
3. Monitor Exchange Rate Trends – Keeping an eye on the markets can help you find the best time to make a conversion.
4. Consider a Forward Contract – Some providers let you lock in a rate for a future transfer. This can protect you from changes in that rate.
5. Check for Hidden Fees – Some banks may add extra charges when you send money abroad. Always check the total cost before you go ahead.

Correct as of 13 March 2025

FAQs About Currency Exchange