Market Summary
This report will take a look at the cost of sending money overseas this week and factors that could affect your currency transfer, focusing on:
- UK Interest Rate Issues
- Italy & Netherlands in Recession
- Eurozone Members to Remove Greece?
- GBPNZD Exchange Rates
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBPEUR | 1.6% | €3,800 |
| GBPUSD | 1.2% | $3,750 |
| GBPNZD | 2% | NZD 7,480 |
UK Interest Rate Issues
Whilst presenting the latest forecasts for the Bank of England Mervyn King has said that raising interest rates in the UK 
could send us into recession. He went on to add that he expects the UK to dip in and out of growth and that the outlook is in line from the November forecast at 1.2% during this year.
One of the major issues surrounding the potential for growth in the UK is the ongoing Greek situation which remains unresolved. With the unlikelihood of UK interest rates being raised this suggests that to get the economy going we could be in line for further Quantitative Easing, which looking at previous examples could be detrimental to Sterling in the longer term. However, as will see further in this report it is the Euro that is currently struggling.
Italy & Netherlands in Recession
According to recent figures both Italy and the Netherlands have fallen into recession. Both economies saw figures of -0.7% in the final quarter of 2011 and two consecutive quarters of negative movement means recession. This is clearly not good news for the Eurozone which saw GBPEUR exchange rates improve by a cent since the news announcement.
They now join Greece, Portugal & Belgium in recession although the Eurozone helped with a growth of 0.1%. If more countries release negative figures this could cause Euro weakness and create some good opportunities for buying Euros. Our experienced dealers are available to you on free phone 0800 328 5884 to discuss all our contract types with you which can be tailored to suit your specific circumstances
Key Data Watch-Fed Chairman Ben Bernanke speaks at 2pm which will give us an insight into the US economy. With continuing concerns about a disorderly Greek default, it is likely that investors will flock back to the US Dollar meaning GBPUSD exchange rates moving lower. Call our dealing floor to find out more on 01494-725353.
Eurozone Members to Remove Greece?
Finance minister Evangelos Venizelos has claimed that some Eurozone countries want to remove Greece from the bloc. At the time of writing Greece is still yet to clarify the plan with fellow Eurozone leaders and now the announcement is expected for Monday. It is likely that the Euro will remain weak until a resolution is reached
GBPNZD Exchange Rates
New Zealand Retail Sales rose by 2.2% during September-December which has seen the Kiwi Dollar strengthen to its highest level in almost 12 months and the second highest in its history. As well as the AUD the NZD continues to remain the choice for clients looking to benefit from high interest rate yields compared to what is available in UK, Euro, US or Japan.
Whilst China continues to trade heavily with New Zealand the currency is likely to remain strong for the forseeable future so if you have an upcoming transfer to make, speak with your currency broker
If you have any questions on how these or any other release may affect your transfers, feel free to call on FREEPHONE 0800 328 5884 or send me an email to teh@currencies.co.uk
