Sterling Strength Following Budget
The announcement yesterday from Chancellor George Osborne confirmed that the UK economy was continuing on its path to recovery but that there is still some way to go before we can consider ourselves out of the woods. In fact, Mr Osborne stated that he believed on the current strategy the budget deficit would be eradicated by 2019. During the actual speach there was very little movement on Sterling but following the budget we did see the Pound push up, especially against the Euro as we close back in on the key 1.20 level. It seems that the budget has been taken well, the papers all seem to be highlighting the positive news for pensioners and for savers and while some synics may believe this was a budget to win votes it does seem that the Coalition government has the UK on track to recovery which should be good news for Sterling. One thing that stood out to me during the budget was that Mr Osborne mentioned how the housing market was still a risk to the current recovery and that maintinaing a steady rise in house prices will be vitally important. I have mentioned in this blog before how important the housing market is and it does seem that Mr Osborne feels the same way so for anyone looking to make an international currency transfer house price data will be one to monitor.
USD Exchange Rates
Last night the Federal Reserve Bank of America (FED) announced that they would be keeping interest rates on hold as expected and that they would reduce the amount of money they are pumping into their economy by another $10bn meaning their assest purchasing scheme, their equivalent of the UK’s Qauntitative Easing programme, is now standing at $55bn per month. Janet Yellen, head of the FED, mentioned that the stimulus programme is likely to continue to reduce at the same level every month and means that we will see it come to an end in the Autumn which then may lead to the possibility of interest rate hikes in the US. So, any clients with regular US Dollar transfers will want to monitor how this situation continues to unfold and the impact on USD exchange rates.