- UK Public Finances back on track
- Euro Update
- US Markets Moving
- Thai Baht Outlook
This report will address the factors that are likely to affect exchange rates today if you are buying abroad or making a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low over the past month
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBPEUR | 1.68% | €4,000 |
| GBPUSD | 2.55% | $7,906 |
| GBPTHB | 2.58% | THB 248,570 |
UK Public Finances Show Biggest Surplus Since 2008
Britain’s Public Finances posted their biggest Monthly surplus in four years thanks to a drop in local government borrowing and a rise in tax receipts according to the ONS (Office for National Statistics).
This has pushed Britain’s debt below the critical psychological level of £1 Trillion to £988.7bn and suggests that government borrowing is on track to meet or beat its target of £127bn in 2011/12, down from £136bn the previous year.
Economists remain sceptical however, as sluggish UK growth will hinder attempts to reduce borrowing in the near future. Official data will be released Friday at 9:30am and is expected to confirm the economy shrank by 0.2%.
Yesterday saw sterling lose ground against a basket of currencies and it is our view that further loses are on their way. To learn more about how these movements could affect your exposure, please set up an account by following this link.
Euro Update
Euro performed well yesterday against Sterling and USD moving below the 1.19 mark against sterling and dropped to 1.32 against the Dollar.
This appears to be on the back of Greece clinching the critical €130bn second bailout. This move in the right direction for Greece might also be seen as the final nail in the coffin however, as the country will need to conform to further EU Austerity measures and cuts as the price to pay for the bailout.
EU Officials have confirmed that an additional 15% wage cut is necessary on top of the 30% already in place but still might not be enough to bring Greece out of recession by the projected date of 2014 anticipated.
The recent GBP/EUR price action supports the suggestion that we can expect to see more sterling weakness in the coming months and with the European economy seeming to move forward finally, I feel the media’s attention will turn focus back to the UK’s issues. As such a move to the 1.15 level over the coming months is still not out of the question in my opinion.
To take advantage of the current levels, please talk to one of our specialist to find the best contract type to suit your needs by calling 01494 725 353.
US Markets Moving
The DOW Jones moved back above the 13000 for the first time since the 2008 crash and USD took a small position against sterling yesterday pushing price down to the 1.577 level on the back of the Greek Bailout deal.
If you have a requirement for USD this week then look out for Existing Homes Sales out today at 15:00 which is expected to come in at 4.65M, better than last month’s figure of 4.61M.
Any figure other than the expected generally creates some volatility for the USD, so please speak to one of our Brokers on the number provided or click here to learn about stop loss and limit facilities and how they can potentially lower your risk to unforeseen volatility.
GBP/THB Update
Thailand’s GDP (Gross Domestic Product) fell by 9% in the 3 months to December due to severe flooding earlier in the year.
The NESDB (National Economic and Social Development Board) have projected growth of between 5.5% and 6.5% this year however indicating that they are expecting the economy to regain strength over the course of the year.
Even with Thailand’s economy suffering last year the Baht remained strong however hasn’t yet breached the 46.00 level, which in my opinion could be tested this year.
If you have an upcoming exposure to Thai Baht, then speak to one of our Specialists to learn more about the restrictions around transferring money into Thailand by calling 0800 328 5884.
