News

Pound Boosted by CBI Survey

28 July, 2011

CurrencyIndex

The Confederation of British Industry has reported a shock rise in high street sales in April – the best result since January 2008.

Although the “green shoots of recovery” may be some way off, the majority of retailers reported increased sales for April, compared to analysts’ expectations of 40% more who were expected to report declining sales.

As a result the Pound has dramatically come back in to demand, showing increases of over 1c against the Euro and US Dollar since the data was released this morning.

If you need to transfer money abroad do contact your currency company to discuss your options.

Aussie, New Zealand Rates Up

28 July, 2011

CurrencyIndex

An opportunity this morning for anybody needing to send money to Australia or make money transfers to New Zealand. The Swine Flu panic has sent investors fleeing to hold assets in US Dollars (a so called “safe haven” currency) – instead of the Antipodeans.

As a result the Aussie and New Zealand have been sold off overnight leading to better exchange rates.

Although both currency rates are not as good as last year, in the current climate of weak sterling, any spike like this is good news. Speak to your UK currency company to find out your options.

Sterling down in Budget aftermath

28 July, 2011

CurrencyIndex

The Pound is struggling in early Monday trading, further to a raft of negative data released last week including the Budget on Wednesday, along with GDP, unemployment and inflation figures which all worsened in a terrible week for the UK’s economic prospects.

Sterling may struggle to recover for some time – so anybody looking to send money overseas in the coming months may do well to consider fixing an exchange rate for future delivery. Speak to your currency broker if you would like to discuss your options.

UK GDP falls, Pound down further

28 July, 2011

CurrencyIndex

UK Gross Domestic Product (GDP) data out this morning came in worse than expected, causing the Pound to take a further tumble after an already miserable week for the UK currency.

First quarter GDP showed a decline of 1.9% and a decline of 4.1% for the 12-month period. This was worse than analysts’ expectations of 1.5% and 3.8% respectively.

Negative news in the UK economy usually means lower exchange rates. This has been the case today with the best US dollar exchange rate falling over a cent this morning, and Euro exchange rates similarly affected.

So why does public debt matter

28 July, 2011

CurrencyIndex

A lot has been written recently regarding the public debit and all the news surrounding Alistair Darling’s second Budget, but why does public debt matter?

What is GDP and why is it significant?
Gross domestic product is, in effect, the income a country generates. As with individuals, you have to consider what is a sensible level of borrowing you can take out against the income you produce. The numbers now, in terms of borrowing levels, are increasing significantly – and in a relatively short period.

What is meant by net public debt and how will Britain’s change?
Net public debt is the amount a country has built up during years of borrowing. The chancellor is now forecasting that public debt will rise to close to 80 per cent of GDP by 2013-2014 – that’s roughly £1.4trillion, or £23,000 a person.

And how will we all be affected?
Ultimately, that debt has to be borrowed from international sources and will need to be paid back. As individuals, we will all pay for the borrowing in one way or another, through higher taxes or reduced spending.

Historically, how does this compare?
The level of net public debt is the highest since the 1950s, when we were paying off the cost of World War II. That’s a pretty high level of borrowing, seeing as its closest comparison is when we were emerging from a war. Back then, net public debit was 250 percent of GDP.

Will Britain’s credit rating be harmed?
The new figure is almost twice the previous public debt ceiling of 40 per cent of GDP. It raises the risk the bond markets will eventually push up the cost of government debt in response. Not only are we borrowing billions, but the cost of servicing the debt could well rise.

What will happen to exchange rates?
High public debt causes confidence in the UK economy to fall. Therefore sterling assets are less in demand and the value of the Pound can fall. This was demonstrated after the budget speech itself, when Euro exchange rates and GBPUSD both fell over 1%. Until confidence returns to the UK economy, there is unlikely to be much upward movement for sterling.

Pound falls further on Budget

28 July, 2011

CurrencyIndex

The Pound has come under renewed pressure after the UK budget predicted the worst year for the British economy since 1945.

Euro exchange rates are 2c lower than at the start of this morning.

Growth forecasts have been revised down, borrowing is far higher than anticipated, and tax rises have been announced.

Anyone needing to send money abroad for a property purchase should contact their currency broker to discuss the options. If the market continues to slide, Euro rates of 1.10 or buying dollars above 1.40 do not look like they will last for long.

Borrowing Up, Unemployment Up, Pound Down

28 July, 2011

CurrencyIndex

This morning’s data has brought the Pound’s recent surge to an abrupt halt – public borrowing has risen to £19.1bn for March and official unemployment figures show a rise to 6.7%.

The Pound has been suffering accordingly, dropping nearly 1c against both the US Dollar and Euro. We still have around the best exchange rates for dollars and euro for some time, but with the budget this lunch time analysts are concerned that there is further to fall for the UK currency.

UK currency companies will be happy to help with your requirements.

Canada cuts interest rates

28 July, 2011

CurrencyIndex

The Bank of Canada has today unexpectedly cut its interest rate from 0.5% to 0.25%.

Analysts thought the rate would be held at today’s meeting, and on top of weaker wholesale sales figures, the Canadian dollar is weakening significantly this afternoon.

Therefore if you are sending money to Canada there is an opportunity to take advantage of better exchange rates.

Don’t forget a reputable currency broker will be able to offer you a fixed exchange rate up to 2 years ahead if you would like to remove the exchange rate risk from your transaction.

Inflation falls less than expected

28 July, 2011

CurrencyIndex

CPI and RPI data has fell less than expected in March – in what is seen as a positive data release for the Pound. Sterling has found a little strength, making rates available from your currency broker slightly better if you are transferring money overseas.

Unfortunately the inflation figures were followed by consumer sentiment data in Germany which is much higher than expectations, leading to Euro exchange rates falling back straight away.

Against the US Dollar, the Pound is up nearly a cent from its lowest position this morning.

UK Inflation Data out Today

28 July, 2011

CurrencyIndex

9.30 today sees UK Consumer and Retail Price Index data released – the monthly key inflation figures for the economy.

These can cause volatility for the Pound and are worth watching out for if you need to send money overseas. Results will be published here by 10am.