News

Exchange rate update

28 July, 2011

CurrencyIndex

A bad week for sterling – despite UK retail sales for July showing a good improvement, public borrowing figures were very poor, and German/European purchasing figures also showed considerable improvement for the European economy.

Euro interbank rates are now in the 1.15s and US Dollar exchange rates have settled in the 1.65s.

Further afield, the Australian Dollar has dropped below $2 to the Pound again, and NZD rates are falling too.

Monday morning’s Nationwide house price index will be important, however there is little else in the pipeline to give sterling any support.

Bank of England send mixed signals

28 July, 2011

CurrencyIndex

Today’s Bank of England minutes (from their interest-rate setting meeting earlier in the month) showed a surprise split on quantitative easing – with 2 members (including Mervyn King) voting for even more extra money for the economy than the £50bn which was injected.

As the extra funds have tended to devalue the Pound, the shock news send sterling tumbling over half a cent against the Euro and Dollar this morning, with the Dollar rate recovering slightly this afternoon.

Tomorrow’s UK retail sales will now be interesting – can we get some good news from the high street, or will further gloom add to the weight on sterling exchange rates?

Prices in UK hold steady

28 July, 2011

CurrencyIndex

Today’s UK inflation data shows prices were static in July, compared to analysts’ expectations of a slight drop of 0.3% for July’s inflation.

Year-on-year, prices rose 1.8%, again above expectations of 1.5%.

The Pound has spiked up a little on the news, although Germany’s upbeat ZEW economic sentiment data has halted any huge gains against the Euro.

Thursday’s retail sales figures are the next key UK data, so anyone worried about the Pound falling further in the coming weeks, may see this as a 2-day window to look at securing commercial exchange rates.

Rightmove House Prices

28 July, 2011

CurrencyIndex

Rightmove’s keenly watched monthly house price survey has shown a 2.2% drop in house prices in August – disappointing after July’s 0.6% increase. As mixed signals continue to come out about the UK economy, it looks increasingly likely that things are not as good as the Treasury would have us believe.

The Pound’s recent drop may well continue therefore and Currency Index would urge anyone looking for the best Euro exchange rates or cheapest US Dollar transfers, to consider locking in rates on a forward contract to eliminate the risk of paying even more in the future.

This week’s currency news 319

28 July, 2011

CurrencyIndex

Comments by the Bank of England’s governor King last week citing a “fragile” recovery at best in 2010 did not help the Pound – as France, Germany and Japan have all now technically come out of recession and the UK is therefore lagging behind its main competitors.

As a result, the Pound has continued to fall against many major currencies, making sending money overseas more expensive. Euro rates are nearly 4c down in the last 10 days, while the US Dollar rate is nearly 7c down in the same period.

There is not a huge amount of significant data this week, although the UK’s inflation and retail sales numbers will be interesting. Whatever your currency requirements, contact a currency company to discuss them and make sure you are equipped with the latest news.

Monday 17th

Rightmove House Price Index (already released)

Tuesday 18th

0230 – Australian interest rate meeting minutes

0930 – UK CPI & RPI inflation figures

1330 – US PPI inflation and house building data

Wednesday 19th

1200 – Canadian CPI inflation

Thursday 20th

0930 – UK retail sales

1330 – US jobless claims

Friday 21st

1500 – US home sales

Australian dollar rate at 11 month low

28 July, 2011

CurrencyIndex

The Aussie Dollar rate has slipped to an 11-month low today of 1.9650 [mid-market], on speculation that Australia will increase their interest rates in the coming months.

This would be the first upward interest rate move by a developed economy, since the financial crisis started last September.

If you need to send money to Australia in the coming months, contact your currency company to discuss your transaction – if interest rates do start to go up in Australia, exchange rates could easily fall further still.

Germany and France out of recession

28 July, 2011

CurrencyIndex

Germany and France have both posted positive growth data in the last 24 hours – signalling the end, technically, of their recessions.

With the Bank of England stating that any recovery in the UK will be “fragile” at best in 2010, this is a signal that the Euro may gain value over sterling in the next 6 months.

Anybody needing to transfer Euros abroad should therefore be concerned, as falling exchange rates may dominate the rest of 2009.

Contact Currency Index if you would like to discuss your own requirements in detail.

Bank Downbeat on Recovery

28 July, 2011

CurrencyIndex

The Bank of England says the UK has some way to go before recovering from the financial crisis, and that any recovery in 2010 will be “fragile”.

This is contrary to the government’s insistence that there will be a sharp rebound in 2010 – not so, according to the Bank’s Governor Maervyn King.

This morning’s unemployment figures showed an increase to 2.44m – the highest level since 1995.

Unsurprisingly, the Pound has not reacted well this morning, losing nearly a cent against both the Euro and US Dollar.

Contact Currency Index if you would like to discuss the implications for your currency transactions.

Inflation Report Tomorrow

28 July, 2011

CurrencyIndex

At 10.30 tomorrow morning, the Bank of England’s quarterly inflation report is published.

This could have profound effects on sterling’s value in the currency markets, particularly after last week’s decision by the Bank to extend quantitative easing by £50bn.

The likelihood is that inflation figures will be low – which usually causes the Pound to fall.

Contact Currency Index tomorrow morning if you need to send money abroad and are worried about exchange rates falling – you can call us on 0800 043 2623 from around 8.30am.

Pound continues down

28 July, 2011

CurrencyIndex

The Pound has continued to lose ground today, as the lack of data in the UK following on from last week’s disappointing announcement from the Bank of England left traders with little reason to buy GBP.

Don’t forget that you can fix and guarantee an exchange rate up to 2 years in advance by using a Forward Contract with Currency Index. There is a small deposit to pay once a rate has been agreed, providing peace of mind that your currency requirement is then fixed in sterling instead of fluctuating day by day at the behest of international markets.

Please contact Currency Index if you would like to discuss your options.