Sterling, Euro, Dollar outlook

Sterling outlook gloomy

2010-03-03T08:54:00.003Z

The Pound continued its poor start to the week yesterday with exchange rates continuing to slide across the board. These losses can be attributed to a number of factors but especially the run up to this weeks Bank of England interest rate announcement on Thursday. The likelihood of any interest rate rise is minimal but the rumours of a second phase of Quantitative Easing measures being announced are getting louder and louder.

Quantitative Easing

What is the reason for and impact of Q.E.?
The idea behind Q.E. is simply to increase the amount of money in the UK economy in the hope of, amongst other things, it filtering through the system and reigniting the housing market, increasing retail sales and in turn reducing unemployment. The problem so far has been UK banks reluctance to lend out this extra money with the aim of improving their own financial position and balance sheets, hence why further measures may be necessary.

The impact of Q.E is fairly serious, with this huge volume of extra money available in the system people, in time, will have more money to spend. The theory of supply and demand tells us that the more people have the more they want things, the more people that want things the more expensive they become............inflation!!!

The principal way of controlling inflation is to increase interest rates and with such a huge volume of extra money in the system, inflation could climb rapidly meaning that interest have to climb equally steeply!!!

Australian Dollar continuing to strengthen

2010-03-02T08:45:00.003Z

Overnight the Reserve Bank of Australia increased the national interest rate to 4%, the fourth time they have increased the cost of borrowing in 6 months. This will undoubtedly give the Australian Dollar further strength.

Over the past 12 months GBPAUD exchange rates have dropped by in excess of 60 cents from 2.25 to its current level of 1.65, that s a difference of AUD 120,000 on a conversion of £200,000!!!

The strength of the Australian economy is mainly as a result of it virtually avoiding recession and therefore being used as a flight to safety for those with concerns about the security of their savings. Since then more and more investors will be putting funds into the Australian economy as a result of them having higher interest rates and therefore greater yields.

It really does appear that the early bird really is catching the worm, over and over again!!

Uk recession over but the Pound still struggles

2010-03-01T08:58:00.002Z

Revised GDP figures out on Friday reconfirmed the UK's economy had scraped it's way out of recession in the last quarter, growing by an upwardly revised 0.3%, more than had been previously forecast.

This, I thought, would have given Sterling some well needed strength after a pretty poor week, but it didn't. The Pound continued to lose ground throughout the day, ending the week 2.64% below the week high agains the Euro (when moving £200,000 into Euroland this equates to over €6000!!) and 2.68% against the US Dollar.

UK recession set to continue?

2010-02-25T08:52:00.001Z

Tomorrow at 9:30am the latest official revised figures for UK GDP will be announced. As most of you will be aware the UK exited recession in the 4th quarter of 2009 with a weak 0.1% growth and analysts are optimistic of an upward revision of this figure to 0.2% growth. One of the major threats to the value of Sterling at present is the possibility of a ‘W shaped’ or ‘double-dipped’ recession where the economy is at risk of falling back into recession before sustaining a full recovery. Germany are already at risk of this as their revised GDP figures released yesterday morning saw a drop from positive growth of 0.7% down to zero growth and I personally fear that the UK may find itself with a similar struggle.

In my opinion the importance of tomorrow’s release means that the markets are ready to react one way or another and I believe that should we see expectations of 0.2% growth or better then we could see a Sterling spike offering some better buying exchange rates across the board. However I believe that a result of 0.1% or worse could be catastrophic for Sterling…

Exchange rates this week

2010-02-23T08:57:00.003Z

Yesterday was a relatively quiet day for the market but we do have plenty of data coming up this week that could affect your currency transfer whether buying currency with sterling or bringing funds back into the UK. For anybody with a GBP/EUR or GBP/ USD requirement this is particularly the case. In my opinion the biggest data set for GBP/EUR this week will be German GDP figures due for release on Thursday, this thought is echoed by other industry specialists:

“The German GDP figure out tomorrow at 09:30 could be the key factor as to how Sterling Euro fares this week, with it being the largest economy in the Euro zone and following the problems in Greece a lower than expected figure could provide excellent buying opportunities.” Tom Higham, Director at Foreign Currency Direct

With Germany being the largest economy within the Euro zone its GDP figures will be closely scrutinised and I would expect GBP/EUR volatility following this release.

For those interested in GBP/USD US Non-farm payroll unemployment data released on Friday is viewed as a very important release for anyone following cable. USD exchange rates have been performing well recently against a number of major currencies including Sterling and the Euro and should these unemployment figures be better than expected we may see this trend continue, possibly worth holding on should you have dollars to sell.

Is Brown a bully?

2010-02-22T08:38:00.005Z

The Labour party have taken a very offensive stance after an anti-bullying charity announced at the weekend that staff from Gordon Brown's offices had contacted them.

Downing Street says the reports are "malicious allegations" and "without foundation" while the PM's secretary has immediately asked for evidence from the charity that the questions have really come from staff at No.10.

Gordon Brown has previously been warned about his behaviour towards staff by civil service head Sir Gus O'Donnell.

The problem the Government now face have is whether or not the allegations prove to be true, Gordon Brown has been labelled a bully in most newspapers in the run up to a General Election!!

Political instability is very much one of the key factors that affect the value of Sterling against other currencies and I'm sure that this will not be the last incident of mud throwing or scandal during the upcoming weeks so the Pound could be in for a really rocky ride!!

If you want to have a chat about market conditions and forecasts give me a call on 01494 787457 or email me at sah@currencies.co.uk

Currency News

2010-02-18T09:57:00.000Z

With the Greece situation smouldering in the background whilst it gets on top of its troublesome deficit there are lot of economic releases to make for an interesting day. We have already seen the Bank of Japan hold interest rates steady this morning. Later sees UK public sector net borrowing for January released at 09:30. With the already very large UK deficit this is one release that should be keenly watched and is likely to shape the sterling markets today.

Forecast is actually for an improvement in the figures with a reduction of £2.5 billion. However seeing the deficit expanded the previous month by £15.7 billion then this forecast from my view is a little on the optimistic side and we could see a reversal of the good gains the pound saw yesterday.

At the same time M4 money supply data is also released measuring all the money in circulation in the UK. The Bank of England will be hoping to see some growth in the figures and most are expecting a small increase of about 0.5%. However, with a growing belief that QE isn’t having the desired effect and the fact that the money supply actually shrunk by more than 1% last month then we could be in for a nasty surprise.

With two very important releases this morning, for anyone with any currency requirements it would be beneficial to be in close contact with your account manager should the market move substantially.

It is worth being aware that there are European consumer confidence figures released at 10:00. With a more fragile looking Euro with the problems surrounding Greece at the moment it has the potential to put a dampener on the euro.

Across the pond focus will be on Canada with a number of releases including Consumer Price Index (CPI) for January at 12.00. For the US it is Producer Price data and the Philadeplhia Fed Survey later this afternoon.

US data out today

2010-02-17T12:03:00.000Z

Like its UK equivalent, the US Federal open Market Committee minutes are sure to cause ripples for the world’s largest economy. They may give an insight as to if or when the US is able to start raising interest rates which is likely to impact on the price of the Dollar. Since many commodities are priced in the greenback this has huge significance for various market sectors and may affect a currency pair you had not considered. With gold being priced in Dollars, and South Africa being the world’s largest single producer of gold, as the Dollar rate changes, so does the amount of gold investors can afford, and therefore the ZAR strengthens or weakens as a result. As you can see the impact of the US information out this afternoon doesn’t only affect clients looking at buying or selling Dollars directly but also those clients looking at a range of other currencies

Banks for sale!!!

2010-02-16T08:52:00.001Z

Taxpayers may have to wait until 2015 before they start getting back the £40bn used to prop up failing banks. UK Financial Investments (UKFI) believes it may take that long before it can sell most publicly owned shares in RBS, Lloyds and Northern Rock. The government body had been hoping to offload them sooner, but there are fears this could result in huge losses.

The question I find myself asking is what will fill the £40bn hole in the meantime? And I keep coming up with the same 2 answers, increases in taxes and cuts in public spending – neither of which I think will have a positive effect on Sterling exchange rates.

We at FCD are always looking for our client’s thoughts and opinions on what they think will happen to the market and where they see exchange rates going? So why not let me know your predictions. Where do you see EUR and USD exchange rates 3 months from now? Email me at sah@currencies.co.uk and I will publish the findings in my next blog.

What will be the effect of a hung parliament

2010-02-16T08:48:00.002Z

The Liberal Democrats yesterday denied that it had ruled out joining a coalition government if no single party won a parliamentary majority at this year's election.

The possibility of Britain's first "hung parliament" since 1974 has unsettled financial markets but Liberal Democrat deputy leader Vince Cable said it could be in the national interest "because it will force parties to work together in a way that single-party government won't."

He told BBC radio: "We will be very constructive in our approach to it, but we are not engaging in fancy games of working out who does what."

The Conservatives are favourites to win the election, expected in May, and so end 13 years of Labour rule.
But a series of polls has shown the Conservatives falling short of the support needed for a majority. The Liberal Democrats, who have 63 seats in the current 646-member parliament, could become kingmakers in that scenario.

Investors fear a minority or coalition government would not act decisively to bring down Britain's gaping public sector deficit, forecast to reach 178 billion pounds this year or more than 12 percent of Gross Domestic Product.

In my opinion the overriding factor that is going to cripple any short term economic recovery in the UK is the national debt, it is already at levels which are spiralling out of control and without a single party steering us (or at least attempting to) then we really could be left out to see without a paddle.

If you, like me, have grave concerns about Sterling’s strength against all world currencies coming into a new political cycle then speak to us soon. We have contracts that allow you to secure today’s exchange rates for up to two years ahead allowing you the comfort of knowing to the penny how much your overseas transfers are going to cost you.

UK unemployement figure going up?

2010-02-16T08:47:00.001Z

The UK economy is facing more redundancies, with substantial cuts expected in the public sector, a report said yesterday. Almost one in three public sector employers plan to shed jobs this quarter, the Chartered Institute of Personnel and Development stated.

Its latest quarterly survey found that the jobs outlook had worsened despite the UK emerging from recession, another strong indicator that the UK may be entering the second phase of a double dip or W-shaped recovery – bad news for the Pound!
The latest unemployment number (which currently stands at 2.46 million) is released tomorrow. A significant increase is likely to have a pretty negative effect on the value of the Pound as fears continue to mount over the long term financial health of Britain.

If you want to be among the first to know the number, literally only a few minutes after its release, email me today at sah@currencies.co.uk and I’ll personally make sure you are emailed the data and how it has affected exchange rates tomorrow morning.

If, however, you are getting tired on the insecurity of the UK economy and need to buy currency in 2010 call us free today on 0800 328 5884 and find out about the contract types we have available that can be tailored to your specific needs.

Greek tragedy

2010-02-15T08:27:00.001Z

It was announced last week that there will be some form of bailout plan for Greece and rather than the responsibility falling onto a few nations, the responsibility will be passed onto the European Union.

This of course includes the United Kingdom and therefore even with our own debt mounting we may be forced to spend further in order to help Greece, with rumours that Spain are in a very similar position as well as possibly Ireland and Portugal, the prospect of the U.K. following suit cannot be ignored.

If this were to happen it would be disastrous for the pound and for those looking to buy Euros either now or in the future should consider forward contrcats in order to protect themsleves from the rocky road ahead.

USD rates suffering

2010-02-12T11:39:00.001Z

Most of the east coast of the USA has been hit by snow and many people are asking whether it is affecting their economy.

It meant that their Retail Sales figure release has been delayed till later today but some are also thinking it has helped to show their jobless figures in a better light. The jobless figures were released yesterday afternoon and came in better than expected as the snow may have caused an administrative backlog. Due to this the pound strengthened against the dollar through yesterday’s afternoon trading.

With this in mind if you are interested in enquiring about our currency rates to send money abroad get in contact today on 0800 328 5884 and talk to your independent currency broker.

Sterling forecast against the euro

2010-01-28T11:08:00.003Z

The CBI yesterday announced that retail sales in January fell at their fastest annual rate, I think this coming so soon after the UK scraped it's way out of recession paints a pretty bleak short to mid term future for Sterling.

The fall can be partly attributed to both the rise in VAT as well as the big freeze the country suffered during the month which both affect peoples willingness and opportunity to spend.

This adds further fuel to the fire that the UK could be heading for a W-shaped or double dip recession - a situation where the economy could fall again, further, than it did a year ago - and who knows where exchange rates could fall to ....... below parity against the Euro? 1.20's against the Greenback? Not good!!

There is no reason why people shouldnt at least be considering the benefits of buying currency, or at least securing exchange rates using a forward contract at these recent highs.

To talk through your specific circumstances or to see what contract types we have available that suit you requirements email me at sah@currencies.co.uk or call me free on 01494 787457

Sterling forecast

2010-01-27T17:05:00.001Z

Sterling has had a rocky 7 days on the markets and it looks set to continue with a number of interesting maybe more news based releases due to come out over the week.

Obviously the key one of the week is the U.K officially coming out of a recession yesterday, however we just crept out of one so good news on paper but in general there is still plenty to be done.

The Iraq inquiry is also set to be a very interesting time for the Pound as there will be some extremely heavy questioning, especially for Tony Blair, and with the U.K still having a Labour Government still in power this may lead to political uncertainty which in turn could bring Sterling weakness.

Canadian Dollar exchange rates

2010-01-20T09:03:00.003Z

Yesterday we saw the announcement of the first Canadian interest rate decision of 2010 which was, unsurprisingly, left on hold at 0.25%. The central bank reiterated that the currency's continued strength was a real hindrance to economic recovery.

On the back of this announcement Sterling gained some significant ground, a welcome change for those looking to buy the Loonie.

In other news German ZEW investor confidence slid more than expected, denting the Euro, while UK inflation figures came out at 2.9% the biggest increase since records began.

This all led to a pretty good day for the Pound which ended up three quaters of one percent up against the single European Currency by the day close

Positive UK house price data

2010-01-18T08:39:00.003Z

Rising buyer interest and low levels of supply pushed property asking prices in England and Wales up an annual 4.1 percent in January, according to property website Rightmove.

On a non-seasonally adjusted month-on-month basis, prices rose 0.4 percent, reversing part of December's 2.2 percent decline.

Search activity on Rightmove's website hit a record high in the first full week of the year with 157.4 million pages viewed, 26 percent higher on the same period a year ago.

Rightmove also warned that Government spending cutbacks and the potential of rising interest rates later in the year could hamper the upward momentum.

We have seen positive moves for Sterling against a basket of major currencies this morning on the back of this data release, sending Sterling Euro to a 3-month high and Sterling Dollar to it's highest level this year.

Australian Dollar update

2010-01-15T08:38:00.003Z

Employment figures from Down Under yesterday came in slightly better than forecast and it will come as no surprise to anyone who regularly follows the Aussie Dollar to know that the currency is still going from strength to strength.

The figures showed that the number of those in work increased by 35,000 against an expected figure of 10,000 - significantly increasing the likelihood of an interest rate increase at their February meeting.

The Aussie Dollar gained 0.7% against Sterling by close of business yesterday and is up another 0.55% already today.

A currency who's countries interest rates look like they are about to increase will generally strengthen against economies who's interest rates are stable or falling so over the next few weeks we could continue to see gains for the Australian Dollar over Sterling, to make sure you are in a position to take advantage of this opportunity take 5 minutes to open a free no obligation trading account with Foreign Currency Direct plc by clicking here

Best exchange rates?

2010-01-14T08:46:00.005Z

Sterling exchange rates rallied yesterday following positive results from both the industrial and manufacturing sectors. The good feeling was further assisted when Andrew Sentence, a member of the MPC (Monetary Policy Committee), hinted that UK interest rates might rise above the record 0..5% low before the end of 2010.

Further, a leading think tank the NIESR seemed to bring closer the prospect of the UK coming out of recession as they announced that their figures (although not official) indicated that the UK economy grew 0.3% in the 3 months to December 2009.

This all led to a real shot in the arm for the Pound, a trend which has carried on against most currencies this morning. For those needing to secure currency in the first part of 2010 this could be the window of opportunity you have been looking for. Call me free on 0800 328 5884 to get up to the second prices and find out what we can do to help you negotiate the market during these volatile times.

US unemployment still high

2010-01-11T09:09:00.002Z

The US had a busy day on Friday with both unemployment and Non-Farm roll figures released. It proved to be a very volatile day for the GBPUSD pairing as Unemployment remained unchanged at 10% and Non-Farm payroll very different from predicted. Since the recession began in 2007, 7.2 million jobs have been lost in the US. In 2009 alone, the economy lost 4.2 million jobs. This brought back fears of a double dip recession which could hugely affect future exchange rates.

Timing a transfer of £100,000 buying USD could have made you an additional $2,000 at the peak of the day. This in another example that keeping in close contact with your dedicated account manager here at FCD can provide a real benefit and create a real saving on your transfer.

If you do not have an account with us to take advantage of this spike simply click here to open a trading facility for either personal or business use. It carries no obligation or cost and gives you access to all the tools available to maximise any future currency exchange.

Positive economic news out of the UK rallies the Pound

2010-01-11T08:59:00.001Z

Friday morning saw the first positive reports for the UK in 2010 with Product Price Index results coming in higher than expected. The price of goods leaving the UK rose 0.5% last month and took the annual rate of output to 3.5% which is the highest since January 2009.

These results published by the Office of National Statistics made a welcome change as the pound strengthened against a basket of major currencies in
morning trading, which for some pairings was the first time in 2010.

Quantiative easing set to increase

2010-01-08T08:30:00.002Z

The is a distinct possibility that the MPC could increase the QE programme designed to reignite the flagging UK economy following their February meeting. In the past announcements of further funds being made available have caused Sterling to weaken significantly.

A spokesman for BNP Paribas SA said that Sterling could fall by as much as 12% against the USD this year as deteriorating public finances, concern the nation's credit rating may be cut and political discord deter foreign investment.

Political Instability

2010-01-07T09:39:00.003Z

Yesterday saw Sterling take a tumble once again as Gordon Brown's leadership was put into question when two ex-cabinet ministers Patricia Hewitt and Geoff Hoon called for a secret ballot regarding party leadership only months before a General Election has to be held.

With two such high profile members of the Labour Party coming out in public like this it is a clear sign that the party is clearly divided.

Political stability (or lack of) is one of the 4 factors of the currency compass, the 4 driving factors behind exchange rate movements and direction.

UK House price rise slowing

2009-12-29T08:51:00.003Z

A recent release by Hometrack showed that house prices rose just 0.1% in December and Richard Donnell, a spokesperson for the company, said that economic growth in 2010 could be hampered by slow growth in household income and unemployment.

If this proves correct it will really weigh down on the pounds resolve with opportunities to buy both Euros and Dollars above current levels few and far between.

RICS house price data comes out positive

2009-12-15T08:55:00.002Z

A release this morning showed that house prices in England and Wales rose at their fastest pace in three years in November, but there are signs that activity may be levelling off as new instructions to sell hit a 2 year high, leveling out the imbalance of demand out weighing supply.

There are concerns that the housing market may suffer a relapse next year if the economy fails to pick up strength and unemployment continues to rise.

The announcement has given Sterling a boost this morning though with the Pound gaining strength over a whole basket of major currencies. During the run up to Christmas where traditionally trading volumes decrease significantly these windows of opportunity are not to be sniffed at, by making sure you have an trading facility open with a currency broker you are in a position to be able to secure currency rates for now and in the future over the phone. FCD offer free no-obligation accounts, why not find out more about why we are one if the UK's leading independent foreign exchange brokerages by clicking on www.currencies.co.uk

Euro news

2009-12-15T08:36:00.001Z

Employment in the Eurozone fell for the fifth consecutive quarter by 0.5%, this means somewhere in the region of 712,000 more people were out of work between the months of July and September.

Recently it was stated that the Eurozone is slowly coming out of recession, but these figures show that it will be a long, drawn out process.

Suprisingly Sterling closed today weaker then it had finished Friday? It really does make you ask the question that is the Pound cant gain ground on the back of very negative Euro data what will happen on the back of a positive Eurozone release??

Alistair Darling Pre-Budget report

2009-12-09T09:28:00.004Z

The Chancellor, Alistair Darling, will today insist that the country must continue to spend its way out of the economic crisis. In his Pre-Budget report at lunchtime today it is thought that he is going to announce another spending spree, seeing expenditure next year rise by £30 billion.

It is already thought that the current £830 billion debt pile the Government has already placed the UK under is threatening any genuine recovery, so how wise is it adding to that already huge burden??

Each time we have seen the Bank of England's Monetary Policy Committee release money into the economy in the form of Quantitative Easing we have seen Sterling exchange rates tumble, and I see no reason why this announcement in the Pre Budget Report will not have a similar effect.

This morning has already seen Sterling lose significant ground against a basket of currencies, a trend that I anticipate seeing throughout the day.

Why mot drop me an email letting me know your thoughts about what might or might not happen today on sah@currencies.co.uk

UK house prices rise

2009-12-08T09:17:00.003Z

House prices rose by 1.4% in November, according to todays Halifax house price index released this morning, faster than analysts expected, driven by high demand and low numbers of properties for sale.

Compared to this time last year, prices in the three months to November are 1.6% down, up significantly from the 17.7% annual rate of decline in April.

This suprisingly positive news could bring about windows of opportunity to buy above current levels as investors start to believe in the Pound again.

For live prices and up to the second market information call us free on 0800 328 5884.

More later ...........

Currency blogs..........

2009-12-07T17:40:00.002Z

If you enjoy reading the posts on my blog why not take a look at ones written by some of my colleagues:

http://forexreporting.blogspot.com

http://currencyinformation.blogspot.com

http://fcdcurrencies.blogspot.com

Let me know what you think?

If there is anything specific you would like me to write about feel free to let me know.

Many thanks
Steve

Exchange rate forecast

2009-12-07T17:38:00.001Z

The main focus for sterling exchange rates is likely to be the Chancellors pre-Budget report on Wednesday followed by the Bank of England (BoE) Interest rate meeting on Thursday. The chancellor is expected to give more details of how he plans to halve the budget deficit over four years. Public spending cuts are expected and he may discuss banking bonuses and the so called new ‘super tax’. This could cause volatility depending on how well the report is received by the markets.

Moving to Thursday, the BoE are expected to keep interest rates on hold, but may shed some light on the future of the quantitative easing programme. This has caused market volatility in the past so you may want to consider how this could affect your currency transfer.

Pound euro rates uncertain forecasts
Market analysts are split at present about which way the pound is set to go. The Centre for Economics and Business Research in the UK has said that they see the Pound/Euro rate falling below £1 to 1 Euro for the first time and the US Dollar falling to $1.40. They put this down to the need for the pound to fall to compensate for low interest rates, in order to attract investment and demand from overseas. Last December the pound lost almost 15% against the Euro, if the same were to happen again we would certainly fall below the 1 to 1 mark.

Other analysts believe the pound may recover in the medium term if the UK shows GDP growth and the BoE’s quantitative easing programme comes to an end.

Eurozone interest rates stay at 1%

2009-12-04T10:49:00.003Z

As expected the ECB yesterday announced that Eurozone interest rates would remain at the hiostoric low of 1% for the next month. President Jean Claude Trichet also announced that he would be looking to tighten up measures used to support liquidity in the banking sectoe.

The foreign exchange markets reacted positively to this news and unsuprisingly the single currency continued to make gains throughout the day.

This, to me, is a clear sign that the outlook in the Eurozone is much rosier than in the UK which could continue to see the Pound go under increasing pressure during the coming weeks qand months.

Great news for those selling Euros, not so good for those needing to buy!!

ECB interest rates

2009-12-03T10:26:00.002Z

During what is likely to be a very busy day on the foreign exchange markets today by far the outstanding release will be the interest rate announcement by the European Central Bank.

Expectations are that levels will remain on hold at 1% and anything other than that will rock the markets with an increase likely to cause significant strength for the single European currency and a cut (the least likely scenario) having the opposite effect with currencies gainning signifcant ground.

The forecast is that at some point soon the ECB will begin to increase the cost of borrowing, especailly as they are now officially out of recession. The liklihood is that this will be significantly sooner than the Bank of England raise rates in the UK. Over time this may well see the Euro keep gaining against the Pound, potentially, as Buzz Lightyear once (kind of) said "to parity and beyond!!!"

Dubai World finance issues weigh heavily on Dollar

2009-12-02T09:30:00.002Z

As fears over the economic turmoil coming out of Dubai, especially surrounding Dubai World start to suside the Dollar appears to be starting to suffer. As reports came out from Dubai World regarding the finacial difficulties they found themselves in it appeared that people began moving funds into the relative safe haven of the Greenback, causing the Dollar to strengthen and GBPUSD exchange rates fall.

Now, as things are beginning to settle down a little, investors appear to be selling off the Dollar causing it to weaken off again. As a result the Dollar slid by nearly 2 cents against the Pound during yesterday's session - if you were buying Dollars you would have received somewhere in the region of $3,900 extra by timing your trade well yesterday, another reason why having a broker acting as your eyes and ears on the market can prove extremely beneficial.

Aussie Dollar on the up

2009-11-26T08:26:00.003Z

The Australian Dollar rallied yesterday after confident comments from their central bank hinting that there is an increased likelihood of an interest rate rise next month.

This is likely to make the Aussie get more expensive to buy as investors begin to move money into the southern hemisphere in the anticipation of greater yields.

This may be an opportune moment, if you need to buy Australian Dollars in the future, to consider the benefits of a forward contract which allows you to lock in and secure exchange rates for up to two years in the future.

US retail sales up but Sterling sees gains

2009-11-17T09:26:00.000Z

US retail sales rose by more than expected in October, largely due to a resurgent car market figures showed yesterday. Sales rose 1.4%, rebounding strongly after September's 1.5% fall. Both months' figures were dominated by the impact of car sales. Taking out car sales, overall retail sales rose by just 0.2% in October, underlining the fragile nature of the economic recovery.
Consumer spending makes up 70% of GDP, which is the broad measure of U.S. economic activity. The retail sales data are an important indicator of consumer spending and if it shows that the figures are slowly starting to rise investors will start to move towards riskier assets and away from the relative safe-haven of the greenback.

sterling weakened on the back of the better than expected U.S. retail sales at first but then FED chairman Bernanke had a speech during afternoons trading stating that U.S. interest rates are likely to remain low for "an extended period," which lead investors to eventually conclude that Fed monetary policy will remain loose for a long time helping sterling gain to nearly a three month high against the Dollar.

What with sterling gaining against the USD and Euro yesterday all eyes will be on the BoE minutes which will be released on Wednesday to see if there are any clues to whether there could be more quantitative easing. If there were more votes to extend more vigorously we could see the gains of yesterday eradicated very quickly so stay in contact with your account manager so we can keep you updated with every data release throughout the course of the day.

Sterling outlook

2009-11-16T08:23:00.004Z

Sterling exchange rates remained volatile last week particularly after Mervyn King suggested that a weak Pound would help the UK economy recover. This, in a week where the Eurozone came out of recession and a widening US trade deficit suggesting Americans are spending again, is weighing heavy on the British currency and may lead to further exchange rate losses in the weak ahead.

Date out this week includes New Zealand PPI, Japanese GDP, UK Rightmove house price index, US retail sales and UK retail price index figures which means we could see another turbulent week.

To keep up to date with what is going on the UK and around the world link to this blog where I will publish a daily market snapshot alternatively visit www.currencies.co.uk where you can open a free, no obligation trading facility giving you access to a personal currency broker who will personally keep you aware of market trends, spikes and conditions.

Exchange rate update

2009-11-13T10:15:00.001Z

Yesterday morning the ECB released their monthly report, which like the BoE’s report on Wednesday highlights future inflation and growth forecasts. The ECB's latest Survey of Professional Forecasters (SPF) said that inflation levels are likely to remain below the ECB’s 2% target right through to 2011, with the annual forecast ranging between 1.7%-1.9%. These figures will give the ECB little reason to raise interest rates any time soon, much like the BoE as the central banks would typically combat low inflation with a rate cut as opposed to a rate hike. The SPF said that the Euro-zone would recover at a ‘gradual pace’ in 2010 with expected growth of 1% over the year. This reflects recent comments from ECB president Jean-Claude Trichet.

Industrial production in the Euro-zone rose for the fifth consecutive month as output increased by 0.3% from the month of September. Figures were slightly short of the 0.5% forecast but this still supports the view that the 16 countries are now collectively beginning to recover from their deepest recession since World War 2.

GDP (Gross Domestic Product) data for the Euro-zone is due out this morning at 10:00am, and is expected to confirm growth of 0.5% in the 3rd quarter of 2009 which will officially announce the Euro-zone as out of recession.

Sterling exchange rates suffer

2009-11-11T17:49:00.001Z

The UK economy has "only just started" along its road to economic recovery, according to Bank of England governor Mervyn King. In the inflation report released yesterday, the BofE suggested it would be late 2011 before the UK economy recovered to the level it was at before the recession.

"The past year has been extremely painful for most economies around the world," said Mr King "There is a more buoyant picture looking ahead that is encouraging. But this does not alter the extent of the challenges facing the economy."

The pound fell immediately against both the euro and the dollar following the report, on the expectation that interest rates in the UK will remain at 0.5% for some time, this pattern continued throughout the day with Sterling losing significant ground against all major currencies.

Sterling exchange rates improving

2009-11-04T08:57:00.003Z

After a pretty slow start yesterday the Pound gained ground against virtually all currencies yesterday, mainly after the US markets opened just after lunchtime here in the UK.

Some of this momentum may have been as a result of the Halifax house price data release which announced that house prices rose 1.2% in October. They did suggest that this growth was unlikely to be sustained as more and more people seem selling to put their houses on the market increasing the demand for each property and as a result the asking price.

With numerous pieces of economic data about house prices in the UK coming out every month from institutions including the Royal Institute of Chartered Surveyors and Nationwide all with slight variants as to how they measure their data one in isolation can at times be taken with a pinch of salt. However over a period should we see consistent positive results we would expect to see some significant Sterling strength on the back of it with opportunities to purchase currency at rates well above where we see them now.

Positive news for the housing market

2009-10-29T17:05:00.000Z

U.K. consumer confidence rose to the highest in 21 months in October as Britons said they are more likely to make big purchases, GfK NOP said. An index of sentiment rose to minus 13, the highest since January 2008, from minus 15 the previous month, the market researcher said. Rising consumer confidence will help pull the U.K. out of the worst recession since World War II after the economy unexpectedly contracted in the third quarter and may lead to early support for the pound.

Also this morning we had Nationwide UK house prices. Prices were higher year-on-year in October - the first annual rise for 19 months, the Nationwide said. Property prices were 2% higher in October than in the same month the previous year, with the average home costing £162,038. But the pace of monthly price rises has eased - going up by 0.4% - and the building society said that values could plateau in the autumn months possibly putting pressure on sterling.

Elsewhere the Bank of Japan kept interest rates on hold, as expected at 0.1%

Best exchange rates of the week

2009-10-28T17:16:00.002Z

The announcement this morning that the EU has approved plans for the nationalised bank Northern Rock to be split in two, with the "good bank", consisting of savers money, available to be sold, seems to have spurred Sterling towards recent highs against virtually all currencies today.

The revenue generated by the sale of the good bank, which could be completed prior to next years general election, would be returned to the taxpayer.

Among those named as potential buyers are Virgin and the National Australia Bank.

I think the positive exchange rate movement is as a result of the revenue generated going someway to reducing the huge overdraft UK plc currently finds itself with, however critics fear that the taxpayer will be left with losses, racked up from the bad assets that remain with the bad bank.

It will be interesting to see how this matter unfolds over the next few weeks and months and whether long term this is seen as positive or negative news for the Pound.

Clocks going forward, bad for business??

2009-10-27T08:28:00.005Z

Research by the Daily Telegraph this week, indicates that this is expected to be the most unproductive week of the year with worker's enthusiasm being hit by the darker evenings resulting from the clock's going back??

What are your thought about this twice yearly phenomenon?

It's all to do with saving the hours of daylight, and was started by a chap called William Willett, a London builder, who lived in Petts Wood in Kent.

Basically, he reckoned that you could improve the population's health and happiness by putting forward the clocks by twenty minutes every Sunday in April and do the opposite in September.

His idea was not taken up, even though a 'Daylight Saving Bill' was introduced some five years before the outbreak of World War One. But once the war started, it was considered prudent to economise, to promote greater efficiency in using daylight hours, and in the use of artificial lighting. And so in 1916, 'Daylight Saving Time' was introduced.

Even though most countries abandoned this after that war, some eventually decided that it was a good idea, and most of these nations began to keep it throughout the year.

Since 1972, Britain has decided to go with Greenwich Mean Time in winter, and British Summer Time in Summer. But back in 1968, Britain tried a four-year experiment by advancing time one hour ahead of GMT throughout the year.

But those living further north, particularly in Scotland, found it most unsatisfactory, with dark mornings for much of the year, and the experiment was dropped.

But the arguments rage on....and on and I'd really like to know your thoughts??

Sterling exchange rates

2009-10-26T11:05:00.004Z

On Friday UK GDP data (a measure of the total goods and services produced in the UK) released on Friday. The expectation prior to the release was for a modest rise and technically bring the UK out of recession. However, as may come as no surprise to many of you, the UK economy actually contracted in the last quarter, and confirmed the UK is still mired in recession- the longest since records began.

This announcement may also lead to further quantitative easing measures being put in place by the Bank of England after their next meeting in early November.

The Prime Minister Gordon Brown has promised the UK economy will return to growth by 2010, stating "my pledge to you is to make reform of the financial sector a reality and to see Britain's economy return to growth by the turn of the year". The data will have been as much of a blow to Brown's re-election as it was to the value of the Pound with big drops against the Dollar, Euro, and a host of other currencies.

Exchange rates still rising on the back of Bank minutes

2009-10-22T08:50:00.007+01:00

Sterling had a great day yesterday with exchange rates going up against virtually all other currencies, at one point trading 1.8% up against the US Dollar and 1.1% up against the Euro.

The main driver behind this strength was the release of the Bank of England minutes from their meeting earlier this month which told us that there was a unanimous decision agreeing to keep interest rates on hold at 0.5% and that currently we did not need to extend the quantitative easing measures currently standing at £175bn.

I think we shall continue to see Sterling in a buoyant mood during today's trading as the impact of the minutes continue to filter through the market.

For those of you interested in currencies across the pond keep an eye out for US jobless claim numbers at 1.30pm and 3.30pm and Canadian retail sales data out at a similar time.

Canadian Dollar Exchange Rates

2009-10-21T17:37:00.003+01:00

The Canadian interest rate decision came out unchanged as expected and stayed at 0.25%, however as regular readers will soon become aware it is the accompanying information that is heavily watched by investors.

In the announcement that followed it was suggested that the Bank of Canada would extend its low-rate strategy by a further 3 months. This dramatically weakened the Canadian dollar and the pound strengthened by over 2% in response.

This trend has continued throughout tradin today with "the loonie" currently trading above 1.72.

British debt out of control?

2009-10-21T08:40:00.002+01:00

In his speech yesterday Mervyn King spoke in detail about the amount of financial support that has been given to the UK economy. Including guarantees it stands at a staggering £1,000,000,000,000, 1 trillion pounds or two thirds of the UK's total annual output.

He stated that "we shall be paying for the impact of this crisis on public finances for a generation" and later said that "never has so much been offered by so few to so many."

The only way I can see this being repaid is by very agressive spending cuts and increases in tax. This could be further bad news for the UK economy as companies, investors and top earners look to base themselves elsewhere.

This in turn could be bad news for Sterling as the flow of money out of the Pound into other currencies should lead to Sterling weakness and lower exchange rates.

For a more detailed look at todays market movers take a look at FCD's market report here written by one of our senior dealers Stephen Eakins.

Exchange rates continue to rise

2009-10-20T16:28:00.002+01:00

Another good day for the Pound as Sterling makes gains over all the major currencies:

GBPEUR +0.32%
GBPUSD +0.11%
GBPAUD +0.75%
GBPNZD +1.28%
GBPCAD +2.01%
GBPJPY +0.42%

With the Bank of England minutes being released tomorrow with news of the interest rate vote and the success (or not) of the recent quantitative easing measures sure to be highlighted, tomorrow morning could be quite a rollercoaster.

In other news, the dollar fell to a fresh 14-month low against the euro today, flirting with the $1.50 level against the single currency for the first time since August 2008.

Sterling Dollar hits 4 week high

2009-10-20T08:23:00.005+01:00

In the run up to the release of the Bank of England's MPC (Monetary Policy Committee) minutes from their meeting earlier in the month tomorrow Sterling seems to be performing well.

US Dollar exchange rates rose over 0.25% to a 4 week high with interbank levels approaching 1.6450.

Regular transfers overseas?

2009-10-19T10:21:00.003+01:00

The Regular Payment Plan (RPP) is now a major part of Foreign Currency Direct’s award winning service. It is a hassle free method of moving money overseas for things such as mortgages, bills, pensions and living expenses. Although the name suggests that you are required to send money each month this is not the case, by simply setting up a standing order with your bank you can change the amount and frequency of your transfers as often as you please. The minimum transfer with RPP is as little as £10 and the maximum being £4000 in a monthly period.

There are no fees or commissions for sending money abroad using Regular Payment Plan and we even guarantee that you will not be hit with charges by your foreign bank.

The Regular Payment Plan really is totally free to use.

The exchange rate we offer is 2% below the interbank level. You may wonder why we offer such remarkable rates on small amounts? The answer is simple, we use our Regular Payment Plan to maintain client’s loyalty and ensure that they keep coming back to us. We also take great satisfaction in knowing the savings we can achieve are passed onto our clients.

Currently the RPP transfers will be conducted on the 7th and 21st of each month* and your money should be credited and available to you within 24-48 hours.

For more information visit www.regularpayments.co.uk

Welcome

2009-10-19T09:52:00.006+01:00

Hi and welcome to the newest most up-to-date blog from the world of foreign exchange. Here you will find daily information regarding Sterling exchange rates against all the major currencies including the Euro and US Dollar.

If you have any comments or would like me to write about anything specific please don't hesitate to email me directly at sah@currencies.co.uk or if you have any foreign exchange requirements call me on 01494 787457 where myslef or one of Foreign Currency Direct's experienced brokers will be on hand to guide you through one of the worlds most volatile markets.