Figures last night from the Federal Reserve Bank of America (Fed) showed that they had revised down their forecast of US economic growth from 2.9% to 2.4% for the rest of this year. The Fed also revised unemployment up while introducing an additional $267bn in its programme operation twist (a programme whereby the Fed sell short term bonds for long term bonds in order to try and keep interest yields down). With the US the most powerful economy in the world and often influencing other economies the news that they are not in as good a position as first thought could cause some concerns across the markets. Recently we have seen the US Dollar weaken however the news that interest rates in the States were kept on hold brought Sterling Dollar exchange rates back down slightly although the on going trend for GBP USD exchange rates is difficult to predict as although their economy is weak the issues in Europe are continuing to see money flood out of Europe and into the Dollar. So, while we have significant volatility ensure you stay in close contact with your currency broker here at Foreign Currency Direct so they can keep you informed of all the relevant market movement.
Today we are set to hear the report on the Spanish banking sector which is likely to show how much financial trouble the banks are actually in, last week we heard that €100bn had been made available for the Spanish banks but no one seemed sure as to whether this would be enough money to cover the banks financial problems. Should the report come out and show that the €100bn is enough then that could bring some confidence back to the Eurozone and therefore Euro exchange rates as people may begin to believe that there is enough money to stop the rot. However, if the report shows the banks need significantly more than this figure then there could be major concern and Euro weakness. So, to hear the latest news stay in close contact with your currency broker today.
If you need to transfer money abroad and are looking for the best exchange rates make sure you speak to one of the specialist currency brokers at Foreign Currency Direct so they can discuss your currency requirements and all the options available to you. You can call straight through to the dealing floor on 0800 328 5884 or email email@example.com