This report will look at the cost of sending money overseas and factors that could affect exchange rates.
- Another Spanish Bailout
- UK Economy Will Shrink In 2012
- Is The Eurozone Crumbling?
- The Jackson Hole Summit
The table below displays difference you would have received when buying £200,000 at the high or the low over the past 7 days
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 0.60% | €1,290 |
| GBP/ZAR | 1.40% | ZAR 37,464 |
| GBP/USD | 1.52% | $1,909 |
Another Spanish Bailout
Valencia (Spain’s third largest city) has announced the region will need a larger bailout from the government than previously predicted.
Spain is one of the Eurozone’s largest economies and like Italy is said to be “too big to bail out”. In recent weeks Valencia, Murcia and Catalonia have all requested increased government funding, which has sparked concern about the future of Spain within the Eurozone.
In June Spain received a €100bn bailout that subsequently caused Spanish borrowing cost to rise to near unsustainable levels.
The GBP strengthen by over 2.6% against the EUR or €6,694 on a £200,000 investment soon after the bailout from Brussels was accepted.
Any decision to increase Spain’s levels of debt through further borrowing will not be made lightly and should be followed closely if you have any upcoming currency requirements.
UK Economy Will Shrink In 2012
The CBI (Confederation of British Industry) has stated UK GDP is expected to contract by 0.3% in 2012 after previously predicting 0.6% growth this year.
Unfortunately the latest official statistics revealed that the economy contracted by 0.5% in the second quarter of the year, the third successive quarter in which it has shrunk.
Fortunately for anyone buying Euros Britain’s economic problems are been dwarfed by those dominating the media in Europe and since July 2011 the GBP has strengthened by more than 13% against the Euro which leaves many of us begging the question, is the GBP overvalued?
If you have a GBP/EUR currency requirement call 01494 725353 today to discuss your trading options with a currency expert who can keep you up to date with any economic activity that may affect your upcoming transfer.
Is The Eurozone Crumbling?
Personally I believe it’s only a matter of time before we see our first Eurozone drop out (Greece) unless massive reform is implemented upon failing economies to ensure larger economies facing uncertain times like Spain do not follow in the same footsteps as smaller economy’s like Portugal and Greece.
In either case you can expect significant movement on the currency market in the short term. Personally I would not be surprised to see the GBP/EUR reach 1.28 in the upcoming weeks as Angela Merkel and Mario Monti’s talks continue. See yesterday’s report.
The Jackson Hole Summit
Since 1978 the Federal Reserve Bank of Kansas City has hosted an annual economic policy summit designed as a forum for central bankers, policy experts and academics to come together to focus on pressing economic topics and discuss emerging issues and trends.
Tomorrows discussions could throw up anything in terms of future predictions from world leaders and economist that in turn could instigate significant currency movement.
Ben Bernanke (Chairmen or the Federal Reserve)is scheduled to speak at 3.00pm followed by Christine Lagarde( IMF Managing Director) at 7.30pm.
If you have a currency requirement please feel free to call or email me at wjs@currencies.co.uk to discuss tomorrows summit.
Best GBP/ZAR Rates Since August 2009
The GBP has continued to make significant gains against the ZAR. This is quite possible due to the recent cut in interest rates.
