This currency report will examine the factors that could impact on Sterling exchange rates. The report includes:
- Spanish Pain – AUD interest rate
- UK Positive Data
The table below shows the difference in currency you could have achieved trading at the high compared to the low over the last 52 weeks on a £200,000 currency transfer.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
Spanish Woes
Trimming spending is currently at the forefront of Spanish politics as the government stated yesterday that Spain’s massive debt levels will increase into next year. The latest austerity measures were unveiled inSpain’s latest budget on Thursday. They aim to make savings of around 13bn euros next year, by cutting public sector wages, education, health and social services.
The Spanish government has found itself in financial difficulty since the 2008 global financial crisis caused a big crash in the country’s over-heated property market.. It has also recently been battered by floods and gales, which all will affect the economy.
In conclusion,Spainis looking ever more likely that it will require the assistance of a bailout. Something it is keen to avoid as it would involve very strict terms, vast public sector cuts and no doubt more public out cry and protests.
Should you be buying or selling a property in Spain, or France and wish to discuss the impact Spain will have on your currency transfer, contact our William Smyth, European Coordinator, on 01494 725 353 or email wjs@currencies.co.uk
Last week saw very lack lustre trading for GBPEUR, with the currency jostling for position either side of 1.2500. This trend will continue through out this week, with only substantial moves either side of the pivotal 1.2500 area giving a clear indication of the longer term outlook for the pairing.
We have already witnessed recently how quickly GBPEUR can retract away from multi year highs. Companies with Euro requirements must be wary of this again, and hedge a percentage of their Euro cover as and when the rate moves in their favour, all with a view to increasing the overall yearly average rate and minimise the risk of hedging on the downside.
Call FCD corporate desk to find out more on 01494 725 353.
Key European Data
European retail sales figures released 3rd Oct
UK service sector bounces back in July
Official data showed recently that the UK service sector bounced back in July, raising hopes of an economic recovery in the third quarter of this year. This was seen as veryUKpositive as the service sector accounts for about 75% ofUKeconomic output (GDP).
Along with this positive data we saw that in the second quarter of the year, theUKeconomy shrank 0.4% in the April to June session. Although a contraction, this news was taken as positive forSterlingas the figure was slightly more positive than expected.
Market reactions to these releases were minor with GBPEUR pushing briefly through 1.2600 and GBPUSD edging into 1.6200 territories. Since then we have seen a slight retraction and the pairings seemingly settling in the 1.2500 and 1.6100 regions respectively.
Contact 01494 725 353 to discuss why we have award winning rates of exchange and how to take advantage of them and also for information on Stops and Limits. Or register here http://www.currencies.co.uk/sign-up/personal/
Key data this week
BoE Interest Rate Decision (Rates expected to remain on hold at 0.5%)
BoE Asset Purchase Facility announcement - both Thurs 4th
US non farm payroll data – Friday 5th
AUD interest rate
Early Tuesday morning see’s the RBA (Reserve Bank ofAustralia) Interest Rate Decision. Flagging export prices and lacklustre global growth mean the Reserve Bank ofAustraliawill probably cut rates before Christmas, but most economists expect another month before any change.
The RBA will consider interest rates in what will be the most closely scrutinised meeting since June, when the RBA trimmed the official interest rate to 3.5 % to help ward off Europe’s financial crisis from Australian shores, offset flagging Chinese demand for Australian exports, and try to take some of the wind out ofAustralia’s resurgent currency.
GBPAUD is trading at the top of the recent range and should be taken advantage off bySterlingsellers. Contact FCD today to discuss any GBPAUD transfers on 01494 725 353.
