Market Overview – March 2009

Please see above for key economic data which could affect currency purchases. Overall, the UK economy is still in an extremely fragile state, and any bad news releases seem to move exchange rates down quickly and harshly.

Of course, if you are selling currency and buying Pounds, such news releases are good news. But for the majority of our clients, who need to make international money transfers to pay for property purchases, health treatment, or goods for their businesses, timing your purchase is of paramount importance.

UK interest rates are at 1% coming into March, so there is little scope for the Bank of England to reduce them any further. However, 'quantitative easing', where the Bank applies to the Chancellor to print more money, could become reality in March. It is hard to know what effect such an unprecented move will have on the Pound, but it might at least reduce deflationary fears. Unfortunately, it may also be seen as a sign of desperation by the UK authorities, meaning falling confidence in the UK and consequently bad times ahead for the Pound.

If you are hoping for the best Euro exchange rates, the ECB’s interest rate announcement is on the same day as ours. If the European Central Bank bring their rate down from 2% to nearer the UK’s 1%, it may be an opportune moment to buy Euros.

Other exchange rates which have been holding up a little better are the less-troubled Australian Dollar, New Zealand Dollar and South African Rand. Historically the Rand has been a volatile currency but sending money to South Africa has been relatively unaffected by the economic problems. Similarly, money transfers to Australia are still relatively stable.

Whatever your requirements, buying or selling against any currency, call our friendly and experienced brokers on 0800 043 2623 (+44 1923 777 562 from abroad) and we will be happy to talk you through what’s happening in plain English.