Sterling exchange rates strengthened further yesterday against the Euro and the US Dollar as concerns over Spain’s economy mount and some fairly positive economic news for the UK as the National Institute of Economic and Social Research (NIESR) stated that in their view the UK had narrowly escaped recession as the economy had grown by 0.1%. However earlier in the day UK manufacturing figures showed we had fallen by 0.7%, a stark reminder that the UK economy is still in a challenging position whether we have avoided recession or not. The figures from the NIESR are different from the official figures used by the Office of National Statistics (ONS) which are due for their final revision at the end of this month, this will be the final point where we will know with 100% certainty that the UK has fallen into recession and at despite the different figures from NIESR the chances are the figures will confirm the disappointing news. So, if you need to transfer money internationally and need to be kept informed of Sterling exchange rate movement then speak to us at Foreign Currency Direct today.
Tonight the Reserve Bank of New Zealand announced their latest interest and expectations are for rates to remain on hold at 2.5% but the accompanying statement could give an insight into how the Central Bank foresee their economy and its long term health. So, if you need to buy New Zealand Dollars make sure you stay in close contact with one of our experienced currency brokers who will be able to keep you informed of any market movement and the latest news from the land of the long white cloud.
As the news in Spain rumbles on it was revealed yesterday that their borrowing costs had risen to a record high as 10 year bond yields reached 6.81% which is the highest it has been since the formation of the Eurozone back in 1999. As we saw before in Greece when a country’s bond yields hit 7% the country will have to accept a bailout as any higher returns are unsustainable and only go to place more pressure on the already ailing economy. In further developments Fitch have downgraded 18 Spanish banks following the news they had cut the credit rating of Santander and BBVA the countries two largest banks. While the focus remains on the Spanish banks there is a concern that the country is focusing on borrowing money rather than looking for growth which many analysts believe is needed to recover from the current slump. To find out more about the situation in Spain call straight through to our trading floor on 0800 328 5884 or email me directly on firstname.lastname@example.org