This report will look at the cost of sending money overseas and factors that could affect exchange rates.
- Best Time to Buy Euro’s since March 2008
- UK GDP Release
- Will Germany Lose Their AAA Credit Rating?
- Further Greek Woes!
- US Property Boom
The table below displays difference you would have received when buying £200,000 at the high or the low over the last 7days.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 1.20% | €3086 |
| GBP/AUD | 0.81% | AUD2455 |
| GBP/USD | 1.52% | $4664 |
Best Time to Buy Euro’s since March 2008
Yesterday the GBP/EUR exchange rate hit 1.2862, currently Sterling has strengthened by over 14.4% since July 2011 offering anyone considering buying an international property with a £200,000 budget an additional €37,000.00.
Unfortunately no one knows how long the current rates of exchange will hold out for so many individual and corporate clients are buying Euro’s in advance by utilising a forward contract.
If you would like any further information please contact me today at wjs@currencies.co.uk or call 01494725353 to find out more.
UK GDP Release
Today at 9.30am UK Gross Domestic Product (GDP) figures will be announced by the ONS and we will find out if the UK economy has strengthened or fallen deeper into recession. With the on-going Eurozone crisis dominating the media and the GBP continuing to strengthen against the EUR it’s easy to overlook the UK’s vulnerability and forget how quickly the currency market can move for or against you.
If the ONS announce further negative growth for the UK I wouldn’t be surprised to see the EUR move back towards 1.27 during this week’s trading.
Will Germany Lose Their AAA Credit Rating?
Germanys AAA credit rating has been scrutinized and labelled with a “negative outlook” by credit rating agency Moody’s.
Moody’s said the country was at risk from the increased likelihood of a Greek exit from the euro and the need to provide more support to Spain.
This damaging report will surely send shockwaves throughout the financial markets and helped the GBP strengthen by 0.42% against the EUR during yesterday’s trading.
Germany has not reacted formally to the threat of a downgrade, but finance minister Wolfgang Schaeuble, said “Germany’s strengths are, naturally, not endless, but we are still as solid as a rock.”
Further Greek Woes!
Yesterday Greek Prime minister Antonis Samaras cast further doubts over the future of Greece and announced the economy will fall into a deeper recession than previously expected.
The Bank of Greece had predicted GDP to shrink by 5% this year, which would have equalled Greece’s deepest recession since the 1930s, Samaras now expects the economy to shrink by 7% this year and does not predict growth until 2014.
The option of Greece leaving the Eurozone is now been openly discussed in Berlin. Economics minister, Philipp Roesler, said: “If Greece no longer meets its requirements there can be no further payments”.
Many experts believe a Greek exit would be the best option for the Eurozone but it would leave the door open for larger economies like Spain to walk away from their mounting debt.
The uncertainty surrounding Greece and Spain that was discussed in yesterdays market report will surely continue to help the GBP maintain its current 4 year highs. Personally I would not be surprised to see the GBP/EUR reach 1.2950 by the end of this week’s trading unless the ONS announce UK GDP has fallen this morning.
US Property Boom
In other news the US property market is booming as American and international buyers continue to flood the market. Foreign property purchases have increased by 24% this year and now make up for almost 9% of the market. It’s been noted that cautious UK buyers are still sitting on the fence but the number of Chinese, Australian and South American home owners is continuing to increase.
If you would like any further information please contact me today at wjs@currencies.co.uk or call 01494725353 to find out more.
