The table below shows the percentage movement of exchange rates for the pound yesterday along with the extra currency you could have bought if buying with £200,000 at the high.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBPEUR | 0.68% | €1,660 |
| GBPUSD | 0.41% | $1,320 |
| GBPAUD | 0.63% | AUD 1,880 |
This report will take a look at the cost of buying foreign currency and factors that could affect your currency transfer as detailed below:
- Sterling Overview
- PMI Data & Next week’s releases
- Euro & USD
Sterling Overview
Yesterday GBP exchange rates weakened against all of the majors by end of trading. However the movement in sterling exchange rates was fairly flat on the day with high to low spreads moving less than 0.7% At one point the pound reached a 3 month high against the USD at 1.5889 & hovered close to 1.21 against the Euro before crashing down to 1.5791 and 1.20 by close of trading.
Here at FCD we have had lots of limit orders filling at levels of 1.19-1.20 against the Euro over the last couple of days. If you have been holding out for these levels and your bank has not been able to achieve this for you please get in touch and we can explain how you can place a limit order in the market so you do not miss out on any favourable movements that may occur in a volatile market.
More PMI Data for Construction
On Wednesday the UK had its first positive data release for the month in PMI for the manufacturing sector as reported in yesterday’s report. Yesterday we had the same report but for the construction sector. The data came out at a level below expectation at 51.4. A reading above 50 though is seen as positive for the economy.
This morning the services PMI data will be released. The markets will be keeping a close eye on this one and so should you if you have a currency transfer to make. We are expecting to see a reading of 53 which is slightly below last months reading of 54. However should we see a reading come out above 53 then we could see some sterling strength today.
Next Week’s QE & Interest rate decision
The reading above will need to be extremely high to take away the issues that we have recently seen with a contraction in UK GDP. Most analysts are looking towards next weeks interest rate decision to see if the BoE will initiate another round of QE. It was thought that the BoE would have instigated this by now but last months minutes showed that no members had voted for an extension in QE. Due to this most analysts now believe that next week may bring the first round of QE this year and they have revised their prediction down from £75 billion to £50 billion.
The last bout of QE caused the pound to lose about 2 cents against the Euro very quickly and I see no reason why this could not occur again. If you require buying Euros, Dollars or any other major currency now may be the time to capitalise on the higher than average rates that we have seen over the last 3 months. Please feel free to register for a free no obligation trading facility by clicking here and one of our currency specialists will be in contact o explain the options that are available to you.
Caution around the Euro zone debt crisis keeps global markets on edge.
Greece is already close to a deal with private investors to reduce its debt burden by about €100 billion plus an agreement to enact deep spending cuts could pave the way for a €130 billion bailout from its European partners and the International Monetary Fund. But Yesterday a European Union official said this plan was not enough to help fix Greece’s problems and the country will need about an extra €15 billion to get its debt down to manageable levels and the rest of the 17 country Euro zone is being asked to help foot the bill.
On the back of the comment which came from one of the country’s international debt inspectors who wanted to remain anonymous due to the sensitivity of the matter the Euro weakened against the Pound and USD shortly after. It is extremely difficult to predict at present which way the Euro rate will head, but if I had to put my neck on the line I would predict that Greece will get the extra €130 billion Euros and with events in the UK can see the trading levels weakening down to 1.1850/1.19 by the interest rate decision next Thursday.
Employment figures improve but Bernanke is still very cautious
Federal Reserve Chairman Ben Bernanke told lawmakers in Washington that while the world’s largest economy is still vulnerable to shocks and that the recovery is frustratingly slow, measures of spending, production and jobs have improved recently. US unemployment claims dropped by 12,000 to 367,000 which increased optimism before today’s non farm pay figures.
Expectations this afternoon are for an extra 150000 jobs to have been created last month. The figure can always come out much wider than expected so if you require buying or selling US Dollars this could be a key mover. With current trading levels at around a 3 month high if the jobs figures come out higher than the 150K then the pound could weaken from its recent highs.
Aussie Dollar continues to strengthen
AUD has gone from strength to strength recently. It is currently trading at a 27 year high against the pound and is at a fresh five month high against the USD. Figures yesterday showed that Australia’s trade surplus grew to a record high last year due to strong commodity exports. If you are planning to emigrate to Australia in the future with rates being so low you must make sure that your funds go as far as possible. Here at FCD we will make sure that you get more Aussie Dollars for less sterling than the banks.
The big freeze
This weekend temperatures are expected to reach minus 12 in parts of the UK. After a mild start to winter the big freeze is now starting to kick in up and down the UK. If you would like to emigrate to warmer shores then please check out our new and improved property website www.propertyline.co.uk to search for your ideal home overseas.
If you find that perfect home overseas please make sure that you contact us to achieve our award winning exchange rates.
