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At the International Trade Forum meeting in Basingstoke a couple of weeks ago, we had an Economist from Lloyd’s Bank speak to us about the world economy and the outlook for currencies.

At one point he showed us a graph of economists’ forecasts for the Euro and the Dollar against the Pound at three, six, nine and twelve months. At 12 months, the spread of the Euro was between 1.0627 and 1.2821 and the dollar was between 1.34 and 1.88! Before the assembled audience could reach the inevitable conclusion, he said it for us.  “Prediction is futile”.

So if you are a UK exporter you can at the very least predict that the Dollar will be more volatile against the Pound than the Euro and maybe this will affect which markets you choose to target. According to James Roberts of foreign currency exchange company PureFX who I was talking to recently, this is because by far most of the transactions done in dollars are made by speculators, not by companies doing international trade.