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26 June 2008

First Rate holiday money monitor - June 2008

In the first of a series of regular reports on the state of the foreign exchange market First Rate Exchange Services, the provider behind the Post Office®’s market leading foreign exchange service, is reporting that the credit crunch, plummeting pound and fuel surcharges on flights and ferries are so far failing to deter UK holidaymakers from planning overseas trips this summer.

First Rate’s report indicates that overseas holidays have remained firmly on the radar this year, with sales of foreign currency running well ahead of 2007 levels. Destinations with low costs of living such as Thailand, Egypt and Turkey are proving particularly popular as UK travellers look for holidays where their pounds will go further.

FX trends update:

The latest monthly sales figures provided to First Rate by the Post Office® for May and early June suggest no slowdown. On the contrary, sales rose by 29 per cent on April levels.

After falling to its lowest ever level on 24th April1, the euro tourist exchange rate stabilised during May with Post Office® sales rising by 5.6 per cent against the previous year. More significantly, euro sales accelerated during May, up 27 per cent on currency purchases made during April 2008. Euro sales in June to date echo the same upward trend.

US dollars sales also grew over the past six weeks, up 8.3 per cent during May and 10 per cent in June to date, while the dollar exchange rate remains a great incentive for transatlantic travel, only marginally lower than in the same period in 20072.

There were dramatic increases in currency sales for some destinations. Thai baht sales grew by 20.5 per cent year on year in May and have increased since then to over 23 per cent year on year. Currency sales for one of Europe’s ‘best value’ destinations, Turkey, have also increased by nearly 36 per cent, with no sign of a slow down.

Gordon Gourlay, Managing Director, First Rate Exchange Services, said: “Our major foreign currency retailer, the Post Office®, continues to see growth in currency sales, with sales remaining strong for eurozone countries as well as for more long haul destinations which offer best value. The peak summer holiday period will of course give us the clearest indication of the effects of factors such as the credit crunch and implementation of fuel surcharges on the international travel from the UK. However, the trends we have seen during May and early June are certainly an encouraging sign for the UK Travel Industry.”

Post Office® top selling currencies (May 2008):

  1. Euro
  2. US dollar
  3. Turkish lira
  4. Canadian dollar
  5. Australian dollar
  6. Egyptian pound
  7. Swiss franc
  8. Norwegian krone
  9. Czech koruna
  10. Polish zloty
  • In May euro sales accounted for 77.6 per cent of total Post Office® currency sales, a rise of almost four per cent compared with its share April 2008.
  • With a year on year sales increase of 17.7 per cent, the Norwegian krone has entered the Post Office® top ten selling currencies as the highest placed Scandinavian currency.

Post Office® fastest growing currencies (May 2008):

  1. UAE dirham +40.5%
  2. Egyptian pound +37.9%
  3. Mexican peso +36.6%
  4. Turkish lira +35.8%
  5. Japanese yen +35.5%

NB: Excludes Russian ruble, which saw a 519 per cent increase as a result of the Champions League final.

  • Egypt seems to be being recognised as one of the world’s best value destinations because demand for Egyptian pounds is running at record levels, up 37.9 per cent in May and accelerating to 47 per cent in June to date.
  • Just outside the top five fastest growing currencies in ninth place, sales of Chinese yuan, now available on demand in leading Post Office® bureaux de change, are showing healthy growth of 19.7 per cent.

1 Post Office® tourist exchange rate charts for the euro – January 2007–May 2008:

2 Post Office® tourist exchange rate charts for the US dollar – January 2007-May 2008:

For further information, please contact:

Four Countries Communications
Ruth Barker
Tel: 0207 749 9219
Mobile: 07814 571128
Email: ruth@fourcountries.co.uk

Bank of Ireland UK Financial Services
Sandra Grandison
Tel: 0207 634 3477
Mobile: 07912 298013
Email: sandra.grandison@boiuk.com

First Rate Exchange Services Ltd is registered in the UK and Supervised by HM Revenue & Customs for Money Service Business (MSB): License number 12133160. First Rate is a joint venture between The Governor and Company of the Bank of Ireland (Registered in Ireland and passported into the UK for regulatory purposes) and the Post Office® Ltd. The Bank of Ireland is authorised by the Irish Financial Regulator and the Financial Services Authority for the conduct of business in the UK. Bank of Ireland First Currency Services is a division of The Governor and Company of the Bank of Ireland.

 

© 2008 First Rate Exchange Services Ltd. A Bank of Ireland/Post Office® venture