UK and Eurozone Manufacturing Falls – GBP EUR Exchange Rates
It was confirmed yesterday that in the Eurozone manufacturing fell to a 13 month low and was very close to not showing an expansion which is further bad news for the single currency economy and heaps more pressure on the Euro. However, in the UK we saw manufacturing figures fall also with the Purchasing Managers Index falling to a 14 month low but still showed expansion and importantly, it showed a slightly higher figure than the Eurozone announced. As a result of these figures and in anticipation of Thursday’s interest rate announcement the Pound strengthened significantly against the Euro presenting some excellent opportunities for clients looking to buy Euros. However, this morning those gains seem to have fallen away which just goes to highlight the unpredictability of the currency markets and how it is not uncommon for spikes in the market last for literally only a few hours. So, if you need to buy or sell currency it is important to keep in close contact with our team of experienced currency brokers here at Foreign Currency Direct plc by calling us for free on 0800 328 5884 or if calling from abroad call us on 0044 1494 725353.
Swiss Franc Exchange Rates – CHF
This morning we have seen the latest Gross Domestic Product (GDP) figures released for Switzerland and they have dissapointed coming out much lower than expected with the quarterly figure showing zero growth meaning, similar to the Eurozone the Swiss economy is teetering very close to falling into recession. Should the Swiss economy not show any growth and fall into recession (confirmed by having 2 consecutive quarters of negative growth) it could really weaken the Swiss Franc and potentially force the Swiss National Bank to act again, potnetially buying large amounts of currency reserves in order to effect the strength of the CHF and again generate a lot of volatility in the currency markets. So, if you need to buy CHF and would like to discuss the current exchange rates please call through to our trading floor and speak to one of our currency brokers who will be more than happy to help.
Australian Interest Rate Decision – AUD
It was confirmed last night that the Reserve Bank of Australia (RBA) kept their interest rates on hold at 2.5% and there was no hint of any change to this policy which keeps in line with previous comments from the RBA who said interest rates would need to stay steady for a long period of time. The growth in China is still relatively strong which helps the AUD as the majority of demand for Australian raw materials comes from China and so strong growth in one of the fastest growing economies helps support the Aussie Dollar. As a result of the announcement from the RBA in the early hours of this morning we have seen the Australian Dollar hold relatively steady.