EU Budget Agreed – GBP/EUR Exchange Rates
It was announced on Friday that the EU leaders had managed to come to an agreement for the 2014-2020 budget. The new agreement means that there will now be a new budget ceiling of €960bn which is a reduction of 3% and as a result will push countries in the single currency economy to reduce their spending which is something UK PM David Cameron had been pushing. Cameron stated that this deal was a “good deal for Britain” and that “we have cut the seven year credit card limit for the EU”. Now that the deal has been agreed it does show some unity and also positive news for the UK who have been adversely affected by the recent EU economic downturn. Over the last 2 weeks we have seen some incredibly volatility for GBP/EUR exchange rates as Sterling fell significantly before picking back up towards the end of last week. While we often expect currency exchange rates to move a lot the recent shift in rates has been surprising and shows just how important it is to keep a close eye on the currency markets if you need to send money abroad. If you don’t have the time to constantly monitor the market speak to one of our friendly currency brokers here at Foreign Currency Direct plc who can be your eyes and ears on the market.
UK Confidence Falls To Record Levels
According to accountancy firm BDO UK business confidence fell to the lowest level in over 21 years which highlights just what a bad position the UK economy is in. Confidence is such a big driver of the currency markets, as we see confidence increase in Europe we have witnessed Euro exchange rates improve, conversely in the UK it is not simply coincidence that as confidence falls Sterling exchange rates weaken. The lack of growth in the UK, the issues on the UK high street with a number of big companies entering administration and the global downturn has seen confidence drop. If the UK is to avoid a triple dip recession that we are seemingly so close to we will need to see some positivity return to the the UK and especially UK business.
US Trade Deficit Narrows as USD Strengthens
The gap between how much was imported compared to how much was exported in America fell close to a 3 year low however this “low” was still a deficit of $38.5bn! Despite this high number it was seen as a positive that the gap narrowed and according to some analysts this news points towards the US economy growing again which has led to the Dollar (USD) strengthening further against Sterling presenting some good opportunities for clients looking to sell Dollars. Earlier this month we heard that the US economy had grown by only 0.1% but the improved trade deficit figures could mean that the Gross Domestic Product (GDP) figure is revised upwards. One of the next key dates for the US and therefore those clients looking to buy dollars is the 28th February as this is when we will hear the latest US GDP figure. If you need to buy or sell dollars then stay in close contact with your account manager here at Foreign Currency Direct plc who will happily keep you informed of all the latest currency movement to help you make an informed decision as to when to transfer currency abroad.
If you need to send money abroad and are looking for great exchange rates make sure you speak to one of our expert currency brokers here at Foreign Currency Direct plc who will be able to keep you informed of the latest currency news. You can call straight through to our trading floor on 01494 849 752 or email me directly on email@example.com.