This report will look at the cost of sending money overseas and factors that could affect exchange rates.
- EUR Gains and Four Year Highs
- BOE Cut Growth Forecast!
- Germanys Trade Drops In June!
- France Falls Back Into Recession
- Property Prices Rise In USA
The table below displays difference you would have received when buying £200,000 at the high or the low over the last 7days.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/EUR | 1.27% | €3387 |
| GBP/USD | 1.016% | $3185 |
| GBP/AUD | 0.67% | AUD 1990 |
Last month the GBP/EUR exchange rate hit 1.2862 offering clients buying EUR one of the best opportunities seen in 4 years but it now seems the EUR could be poised to make a return after gaining 3 cent against the GBP in 2 weeks.
If you are planning on buying or selling abroad you can protect your investment from any adverse movement on the currency market by utilising a forward contract.
If you would like any further information please contact me today at wjs@currencies.co.uk or call 01494725353 to find out more.
BOE Cut Growth Forecast!
Yesterday the BOE Governor Sir Mervyn King announced that the UK’s growth forecast had dropped from 0.8% to near zero. The report fuelled the fires of anticipation that further interest rate cuts and Quantitative easing would be announced in the near term.
Despite the negative outlook the GBP still gained by 0.5% against the EUR yesterday ahead of tomorrow mornings ECB monthly report.
Germanys Trade Drops In June!
Germanys AAA credit rating was scrutinized and labelled with a “negative outlook” by credit rating agency Moody’s last month.
Moody’s said the country was at risk from the increased likelihood of a Greek exit from the Eurozone and the need to provide more support to Spain.
Yesterday Germany’s Industrial Production figures came out negative and highlighted a steep decline in trade between Germany and other Eurozone countries.
Germany’s trade dropped by 3% in June which has opened the door for further market speculation that the Eurozone crisis could escalate in the upcoming months.
Germany has always been the driving force behind the Eurozone and with its own economy suffering it will be harder for Angela Merkel to justify further economic bailouts for faltering economies like Greece and Spain without facing political tension and economic unrest in Germany.
Political unrest and uncertainty will normally be followed by sharp and unpredictable movement on the currency market. During the London and Athens riots 2% GBP/EUR movement was not uncommon.
France Falls Back Into Recession
The Bank of France has predicted that the French economy will post negative growth this quarter and fall into recession for the second time in three years.
With France and Germany suffering it could signal a good opportunity for anyone considering selling Euros but at the same time the UK is heavily affected by the productivity and strength of Europe so it’s just as likely the GBP could be made vulnerable to sharp EUR gains against the GBP.
To product yourself from adverse currency movement call 01494725353 today to discuss your trading option.
Property Prices Rise In USA
According to the HPI(Home Price Index), home prices are rising nationwide, including distressed sales. On a month by month basis prices are rising by as much as 1.3% in tourist hot spots like Florida and are expected to continue moving in the right direction.
Since January property sales completed by international buyers has risen by 24% in America but the vast majority of international buyers are not coming over from the UK. Currently the GBP/USD is trading at 1.56 and there is nothing to suggest the GBP could strengthen back towards the highs of 1.60+ seen during April and May.
Breaking News
At 2.30am UK time Australian unemployment figures were announced. It was expected unemployment figures would remain at 5.3% but the small improvement in reducing unemployment to 5.2% has helped the AUD make gains against the GBP in early morning trading
