What is a guy to do? Planning a move between countries is convoluted enough without further complications but it seems the central bankers and terrorists have plans to make your life as nervous as possible. However you can thwart them.

The problems that these two groups pose to the international migrant are that their actions affect the value of your funds. I am well aware that terrorism poses enough threats already without me identifying another one but the variation in the value of your money could pose a significant threat to the wealth you arrive with in your new home. 

We saw the complications that central bankers can bring when the Bank of England and European Central Banks both hiked their base interest rates by 0.25% on 3rd August. The reasons given by each bank varied a little but the overwhelming thrust was that their economies are growing, particularly in the consumer sector and the Central Banks have to reduce the availability of cheap money to temper demand and thus reduce inflation.

This is a perfectly valid argument for each of them but the European Central Bank has slightly less credibility in doing so when German manufacturing is struggling to grow and the borrowing requirements of individual EU states are still out of step with the ECB’s target levels. 

The Bank of England is coping with UK inflation at the top end of their Government imposed 1-3% target. This is driven by a buoyant housing market, which in turn creates confident consumers; these factors allied to relatively strong economic growth do lend weight to their decision. However, what amazed traders and analysts alike is the sudden change of heart that took the Bank Of England’s monetary policy committee from a unanimous vote for an unchanged interest rate in July to a majority vote for an interest rate hike just one month later. 

Whilst these shenanigans were going on in Europe, the Federal Reserve, America’s central bank, announced that it had reached the end of a two-year, seventeen step interest rate raising cycle which took US interest rates from 1% all the way up to 5.25%. Leaving their interest rates on hold created a lot of nervousness amongst financial markets because traders were unsure whether this was a pause or a complete change of heart and the exchange rate volatility reflected this ambiguity.

And just when the markets were truly unsettled, the British security services announced that they had foiled a plot to blow up airborne transatlantic jets. The fantastic news that the plot had been thwarted didn’t stop the dread that people all over the world feel when these murderous insane plots are discussed. Mention September 11th to a New Yorker or 7th July to a Londoner and the same chill can be seen running down their spines.

Traders are not immune to these feelings and their reaction to the potential for death and destruction in the name of some radical misbelief was to scurry away in search of a safe haven for their funds. Consequently, when the 10th August plot was unveiled, the US Dollar actually gathered some strength while the Pound was understandably not the flavour of the day. 

All of this is kind of academic I know but if you are migrating there is a direct relationship between events like these and your funds. For those in the midst of a move from America to London, for example, the direction of the Sterling – US Dollar exchange rate over the last few months has been hugely expensive. This rate has risen from $1.81 to over $1.91 in the space of just a few weeks; a ten cent variation.

Now I know a dime doesn’t sound like a lot of cash but when you lose a dime for every Pound you buy, you are giving away more than 5 percent of your funds. To scale that up, the average migration that we handle at Halo Financial equates to approximately $300,000. 5 percent of this is (I’m sure you are way ahead of me on this) $15,000. That’s enough to buy a small car in Britain and certainly enough to make a difference to the deposit you will have available for a home in the UK. 

Obviously, the opposite is true for you if you are planning to move from the UK to the US; the recent changes in exchange rates have delivered a late summer present of equal proportions and with cars being less expensive in the US, $15,000 will be a welcome extra upon your arrival in the home of the brave and the land of the free. 

So the twin facts that UK interest rates are on the rise and US interest rates have ceased to rise for the time being have conspired to offer US bound migrants a chance to capitalise on their good fortune and those with a move on the cards to the UK with a dilemma; do you take the current exchange rate in the belief that things can only get worse or do you wait in the hope that the GBP-USD exchange rate will fall in your favour? - Article Continued Below -