Market Snapshot
The table below shows the percentage movement of exchange rates yesterday, along with the extra currency you could have bought if buying with £200,000.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 0.4% | €1000 |
| GBP/USD | 0.4% | $1200 |
| GBP/NZD | 0.4% | NZD 1400 |
| GBP/AUD | 0.5% | AUD 1900 |
This report will take a look at the cost of buying foreign currency and factors that could affect your currency transfer as detailed below:
EUR GBP – 1 month High
GBP USD – 4 Month High
Australian Dollar News
Other Data
EUR GBP – 1 Month High
The Euro held its ground on Monday in a narrow trading range having taken the single currency past a 1 month high against sterling and a four month high against the US dollar. After a delayed market reaction following Mario Draghis’ comments for ‘unlimited’ bond purchases, the Euro has since maintained its recent rally. The news is great for the likes of Spain and Italy and rates should have a little further to go testing the 1.23 / 1.24 levels. There is a still a good opportunity to buy Euros and a forward contract may be a sensible move with the prospect of more Euro strength.
The Greek Prime Minister met with EU officials yesterday to discuss ongoing austerity measures. Some of the latest terms have been rejected by EU inspectors and although unlikely, it does mean that further aid payments could be stopped. We’ve seen this before but with more anti austerity strikes planned in Greece, expect continued volatility for the Euro as these negotiations take place. Anyone with a Euro requirement should be aware that a ruling is due tomorrow on whether Germany’s constitutional court backs the Euro bailout fund. If the European Stability Fund is upheld then there the Euro may see some very slight benefit. If however the court rules the bailout fund to be illegal then the Euro could see some very sharp weakness!
GBP USD – 4 month High
The pound slipped from a four month high against the US dollar yesterday having broken the key 1.60 level and the dollar could be in for some headwinds. US non-farm pay roll data on Friday was weak, whilst the bold plan from the Eurozone to keep borrowing costs lower has inspired confidence in the Euro. Considering that the Eurozone is the UK’s largest trading partner, a better EU outlook can only be good news for sterling. Having repeatedly broken the 1.60 level yesterday there should be renewed support and levels should start pushing higher to the 1.61 / 1.62 levels. The expectation of more Quantitative Easing in the US should only help contribute. US trade deficit figures today are expected to worsen from just under $43 billion to $44 billion. A poor number today could help keep this sterling dollar rally going!
Australian Dollar News
The Australian dollar continued its recent fall following weak trade data from China yesterday. Chinese imports were particularly weak which is a worry for the Australian export market and hence is Aussie negative. The Chinese president also warned growth could slow further which is only likely to harm the Aussie going forward. Australian Business confidence numbers from National Australia Bank came in weaker than expected this morning adding more to the argument the dollar will weaken further.
Other Data
RICS UK house price data this morning came in slightly better than expected which is a minor positive for the pound. UK trade balance data is released at 09:30 this morning with expectation for an improvement in the figures with a reduction in the trade deficit (the difference between imports and exports) to -8.9 billion compared to -10.11 the previous month.
US Fed interest rate decision is Thursday – QE3 likely.
The G20 meeting also starts on Thursday which is an important date to be aware of as it can bring a new dimension into the markets. To discuss how these issues may affect your requirement call us on 0800 328 5884 or 01494 725 353 or e-mail me directly jll@currencies.co.uk
