This currency report will examine the factors that could affect Sterling exchange rates. The report includes:
- UK refuse EU Treaty
- European Unemployment
- US Non-Farm Payroll
- Canada Heading Towards Recession?
The table below shows the difference in currency you could have achieved trading at the high yesterday compared to the low on a £200,000 currency transfer.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBPUSD | 0.61% | $1,927 |
| GBPEUR | 1.24% | €2,976 |
| GBPCAD | 0.86% | CAD 2,717 |
UK Refuse EU Treaty
It was announced early yesterday that every EU member states except the Czech Republic and the UK have signed up to a treaty aimed at enforcing budget discipline within the Eurozone. The UK refused to sign the pact as it stated they had “legal concerns” about the enforcement of the treaty following on from December when Cameron vetoed the agreement. Although Cameron has not signed the agreement he has also decided that despite his earlier veto almost 2 months ago he will not block the pact which has led to calls from within UK politics of weak leadership.
The aim of the treaty is to have closer economic co-ordination across Europe to help prevent excessive debt levels for individual member states and therefore prevent more Greek style issues. The fact the UK have decided to opt out of the treaty puts yet more pressure on an already strained relationship while the decision not to block the pact has led to some Tory sceptics and the Labour party questioning Cameron’s tactics which is leading to more political tension for the coalition government.
Regular readers will be aware that political uncertainty can have a major impact on the currency markets so should Cameron and the coalition come under more pressure we could see further Sterling weakness.
Sterling Euro Exchange Rate
Yesterday afternoon saw Sterling gain over 1% against the Euro presenting clients with fantastic buying opportunities. However, as we are well aware these opportunities rarely last for long and with the Purchasing Managers Index due for release this morning any negative news could send Sterling Euro back down towards the 1.1875 mark. So, if you need to buy Euros speak to one of our experienced currency brokers on 0800 328 5884.
European Unemployment Hits Record High
Figures from the Eurozone have shown unemployment hit a record high with 16.5 million people unemployed. Spanish unemployment remains highest in the EU with 22.9%.
Yesterday, France also announced that they have cut their 2012 growth forecast by half. As one of the most powerful economies in the Eurozone this is clearly not good news for the Euro especially as France cited the declining economic situation in Europe and their exposure to Greek debt as the reason for the lower growth prediction.
With negative news coming out of Europe and Greek debt talks still hanging in the balance there is still a lot of uncertainty over short-term Euro exchange rates.
US Non-Farm Payroll
On Friday we are set to hear the latest set on US non-farm payroll data, one of the most highly anticipated economic data releases for the US. The figures show the level of employment in the States excluding the seasonally effected agriculture industry. In the past this data set has caused some major Sterling Dollar exchange rate movement so if you need to buy US dollars then speak to us today on 01494 725353 so we can discuss your requirements and the options available to you.
Canada Heading Towards Recession?
It was announced yesterday that Canadian Gross Domestic Product (GDP) came out at -0.1% a sign, similar to the UK last week, that the country are possibly heading towards recession. Two consecutive quarters of negative GDP figures officially confirm a country is in recession so should we continue to see weak data from Canada over the start of this year we could see the CAD weaken and therefore some good buying opportunities.
Goodwin Stripped of Knighthood
In other news it was announced yesterday that former RBS boss Fred Goodwin has had his title annulled. The government has reacted to the recent public outcry at Banks and the outrageous bonuses paid to their senior management despite their precarious financial position and the fact many are funded by tax payer’s money.
Goodwin may have been stripped of his Knighthood but there are still other bankers taking home eye watering bonuses. FCD offer bank beating rates of exchange so make sure you are not still lining the banks pockets and instead speak to us today so we can show you how to save money on your currency transfer.
To discuss the issues in this currency report and how it could affect your transfer email us at info@currencies.co.uk
