This currency report will examine the factors that could impact on Sterling exchange rates. The report includes:
- European woes
- Range Bound USD
- UK Inflation
- AUD Strength
The table below shows the difference in currency you could have achieved trading at the high compared to the low over the last 52 weeks on a £200,000 currency transfer.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBPUSD | 8.3% | $16,600 |
| GBPEUR | 12.61% | €25,220 |
| GBPAUD | 11.0% | AUD 22,000 |
With the world still reeling from an emphatic 31st Olympiad, it’s time to get back to reality as the world economy is in a very bleak position. As the Olympic torch was dramatically extinguished, there was a sense of realisation, and probably depression, as Olympic fever wears thin and brings about the recognition that doom and gloom may lay ahead.
Without wanting to sound like a broken record, the Euro crisis is continuing to dominate headlines. A general theme seems to be developing with GBPEUR moving two steps forwards, one step back as the can that is Europe is continuing to be being kicked down the road.
That being said however, yesterday saw the release of Germany’s Q2 GDP (Gross Domestic Product) which came out at a growth of 0.3%. Germany, commonly seen as the barometer of European health is being propped up by exports to developing countries less affected by the Euro crisis. But can Germany alone hold up Europe?
With the rest of the Eurozone economy shrinking by 0.2%, it could possibly be just a matter of time before the German economy is smothered.
GBP’s relentless grind higher is continuing so far this week, and with no signs of anything changing, it looks as if we are in for more of the same, as GBPEUR looks to potentially attack the 1.3000 resistance level in the near future while being propped up by support at 1.2500.
Contact FCD corporate desk on 01494 725 353 to discuss GBPEUR.
Unexpected UK Inflation rise
UK consumer price inflation inched up to 2.6 percent from 2.4 percent in June as prices for airfares soared and clothing retailers reined in seasonal discounts according to the ONS.
Off the back of this news Sterling rose to a two week high against the US dollar briefly through 1.5700. Net USD buyers and sellers should be cautious in the coming weeks as Cable jostles for position between 1.5400 and 1.5700.
I would not be surprised to see brief spikes towards 1.6000 in the coming months, representing a good opportunity for USD buyers. Equally, my longer term view is that as we move through the final quarter of the year, rates could possibly move into the USD sellers favour, with potential pressure on 1.5300/1.5200 a possibility.
By staying in close contact with your broker at FCD plc, we can be your eyes and ears on the markets and help you make more prudent decisions regarding your FX.
Strong Australian Dollar 
The Reserve Bank of Australia (RBA) currently has interest rates at 3.5%. There had been growing speculation that this rate was set to be cut with a view to stimulating the economy.
The National Australia Bank (NAB) predicted yesterday that rates would remain on hold till 2013 when the Australian economy should see a general pick up. This prediction was also made off the back of a more upbeat economic outlook from NAB.
Whether you’re selling a property in Australia and transferring funds back to Sterling, or buying AUD for your corporate requirements, don’t let banks cash in on your FX transfers.
Contact 01494 725 353 to discuss why we have award winning rates of exchange and how to take advantage of them and also for information on Stops and Limits.
KEY DATA
Bank of England (BoE) Minutes at 9.30am GMT.
This release will give an indication of how the BoE voted regarding UK interest rates.
US Consumer Price Index
Consensus is for a drop which may signify short term USD weakness
