The following currency report will examine the factors that could affect Sterling exchange rates. This report includes:
- September Could Hold Key to EU Future
- George Osborne Urged to ‘act now’ as Fears for UK Economy Grow
- US Dollar Overview
- Australian Dollar Weakens Ahead of RBA Minutes
The table below shows the difference in currency you could have achieved trading at the high over the last 30 trading days, compared to the low, on a £200,000 currency transfer.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 2% | €5260 |
| GBP/USD | 1.6% | $4960 |
| GBP/AUD | 2.2% | AUD 6720 |
September Could Hold Key to EU Future
September could prove to be a critical month for GBP/EUR exchange rates, as events in the EU will come under the media spotlight once again. Reactions are mixed as to which way market sentiment will be heading come the end of next month but even now the EUR seems to be gaining a small amount of momentum, especially against the US Dollar, where it has moved approx 3 cents away from its all time lows.
Amongst the issues at hand for EU leaders to ponder are the possibility that Spain will finally request the bailout experts have discussed is necessary for so long. The talk of a Greek exit is also intensifying again but despite this, many analysts are predicting that the powers that will be will remain bullish during this period. If this does indeed turn out to be the case, the continuing problems our own economy is facing could see the EUR in line for a fight-back against Sterling over the coming months.
As it stands GBP/EUR levels are still hovering around the 1.27 mark, as the markets wait for the upcoming economic events in Europe and the UK to unfold. Personally I still worry about the possibility of Greek exit from the eurozone and the potential contagion it could cause to other smaller EU members but I still feel EU leaders will try to reduce market fears and with the problems our own economy continues to face, a move back towards 1.25 is more likely than a move up through 1.30.
If you would like to take advantage of the near four year highs on GBP/EUR, then please visit our website www.currencies.co.uk for more information and speak to one of our brokers today.
UK Economy Struggles as Olympic Blues Set in
Chancellor George Osborne has been told he must change the course of the UK economy or cause “immeasurable damage”. Fears are growing that the UK is struggling to pull itself out of recession and as the Olympic blues start to set in recent poor data, including the widest trade deficit since records began, is weighing heavily on an already fragile economy.
Following multiple announcements by the BoE (Bank of England) that growth forecasts will be minimal for the remainder of 2012, it is easy to see why concern is growing and personally I feel any positive momentum gained by Europe and the single currency over the next month could see the focus shift firmly on the UK and our economic uncertainty.
Key data this week – We have UK GDP figures out on Friday and further contraction is expected (-0.5%) which could cause Sterling weakness.
US Dollar Overview
US economic data has improved slightly of late, although we have seen the USD weaken off slightly against the GBP and EUR in particular. GBP/USD are currently hovering around 1.57 as the markets wait for further data from the US and Europe. With US new home sales out on Thursday, along with housing price index, it could be a volatile week for cable.
Australian Dollar Weakens Ahead of RBA Minutes
The Australian Dollar declined against most of the major currencies following the nation’s Treasuries announcement that it would ease monetary policy if the currency’s strength was ultimately hurting the economy. Fears have reason for Australia’s affluent export industry following the continued strength of the AUD, seemingly across the board in recent months.
The Reserve Bank of Australia (RBA) will release the minutes of its August 7th meeting this week, in which policy makers chose to keep interest rates at 3.5%. After the treasury’s recent announcement it will be interesting to see the market reaction to the release, so if you have an upcoming GBP/AUD transfer stay in touch with your personal currency broker here at FCD for all the latest market fluctuations.
Here at FCD we have various contract types all tailored specifically towards our client’s needs, so for more information please call us today on 0044 1494 725 353 or contact me directly at mtv@currencies.co.uk.
