Sterling has crept up a little in the past 24 hours following a slightly more positive outlook on the U.K economy by Sir Mervyn King – Governor of the Bank of England.
King upgraded growth forecasts and however did also say there was still a downside risk, and investors still seem to agree with this as confidence in the U.K and indeed the Pound still does not seem too high.
There isn’t a huge amount of data left to come out this week for the U.K so I don’t expect any huge movements in the coming few days however do be aware that in this current global economic situation and surprises can pop up at any time.
The Pound has kicked off the trading week with a little strength against all the major currencies, with the main focus for the U.K this week being unemployment data due out on Wednesday morning.
Unemployment levels have indeed one of the factors that is holding back the Pound at present from moving on to the next level and any improvement would be seen as a huge plus, however levels are expected to come out unchanged.
Following the unemployment figures we have the quarterly inflation report from the Bank of England and Mervyn King speaking shortly after this. Regular market followers will be aware that Mervyn King does tend to be on the negative side however he is due to be leaving soon so he may wish to leave on a high which could give the Pound a boost.
UK Growth In The Spot Light Again
Last night the head of the International Monetary Fund (IMF) Christine Lagarde has stated that she has concerns over UK growth and the overall health of the economy. Ms Lagarde stated last night that the UK’s growth figures were “not particularly good” and these comments come after the forecasted growth outlook was downgraded again. The UK is on the verge of a triple dip recession and even if we do avoid two consecutive quarters it appears that we are unlikely to see any major uplift in the economy for the rest of the year. As we hear more damning news for the UK economy it is possible GBP exchange rates will suffer and weaken against a number of other major currencies.
Currently the Chancellor George Osbourne is pushing ahead with his austerity measures but there are some who are questioning whether these measures are the best way to get the country out of the current slump they are in. The chief economist of the IMF Olivier Blanchard believes the Osbourne should re-think his current plans and people are now asking whether the austerity measures should be slowed down so as to give the UK economy a chance to expand. Osbourne staunchly believes in his austerity measures and while they may be good for the longer term prospects for the UK they are unlikely to support Sterling in the short term.
Canadian Inflation Due – CAD Exchange Rates
On what is quite a quiet day for economic data some of the key data will be for those clients looking to transfer Canadian Dollars. At lunch time today we have Canadian inflation figures with Consumer Price Index (CPI) due for release which will give an insight into the change in price of goods and services. Theoretically an economy would like to see a steady, continual rise in inflation as it can be positive for an economy but should inflation rise too quickly it can have a very detrimental impact on that countries currency and likewise should inflation fall to negative levels it means the price of goods and services are falling which can also be negative for the economy. It is predicted that Canadian CPI today will fall from 1.4% down to 0.2% and if this is the case or if the fall is any more than this then we could see some Canadian Dollar weakness which could be good news for any clients looking to buy CAD.
If you need to transfer money abroad and you are looking for the best exchange rates then make sure you speak with one of our experienced currency brokers here at Foreign Currency Direct plc. The broker will be happy to discuss your currency requirements and the different contract options we offer which we can tailor to your individual needs. You can speak to one of our friendly and knowledgeable currency brokers by calling through to our trading floor on 01494 849752 or alternatively you can email me on email@example.com
UK House Prices Up – GBP Exchange Rates
Figures from the Nationwide have shown that UK house prices rose by 0.2% in February with the average house price at £162,638. While it is positive news to see house prices on the up the difference is very small and is unlikely to have a significant impact on the UK economy and for that matter Sterling exchange rates. In the UK so many people have their funds tied up in bricks and mortar which means they are suseptable to house price movement. Theoretically if we see house prices rise then we often see an increase in the number of house sales which results in more money flowing through the economy which has a positive effect on GBP exchange rates. However, considering how far house prices have fallen and the fact that we are close to being in a triple dip recession I think means we will need to see house prices rise a lot further in order to give people the incentive to want to sell their house. In my view the house market can be a good indication of the overall UK economy and so the fact that we are seeing very small growth means we are likely to see minimal, if any growth in the overall UK economy.
No Deal For US Budget Cut As US Dollar Comes Under Pressure
It seems as the US is always “fast approaching a crucial economic deadline” and the present time is no different. Currently Congress is in deadlock as they are trying to avoid a big number of budget cuts which are worth $85bn and there is concern that if these cuts go through it will harm the US economy and from a currency perpective could weaken the USD. In America we have seen negotiations in Congress to avoid breaching the budget ceiling and more recently there was huge concern that the US was going to suffer falling off the “fiscal cliff”. Now we have another pressing deadline on the cards and again in the lead up to this we could see a lot of volatility for USD exchange rates. However, you have to ask yourself why does are these left to the last minute, I personally believe it is for political point scoring more than for economic reasons but either way it is likely to mean the currency makets, especially Sterling Dollar exchange rates could be volatile in the next few days. So, if you need to buy Dollars make sure you stay in close contact with one of our experienced currency brokers.
Canadian GDP To Be Released So Expect CAD Volatility
Later on today we have Canadian Gross Domestic Product (GDP) figures due which are expected to show that the economy has remained fairly steady at around 0.6% growth for the quarter. Should we see any variation from that we could see some major Canadian Dollar movement. GDP is a key inficator as to the health of an economy and so positive figures today could see the CAD strengthen but the opposite is also true. So, if you have a requirement to either buy or sell Canadian Dollars stay in close contact with your currency broker here at Foreign Currency Direct plc today so they can keep you informed of the latest currency news.
If you need to send money abroad and you are looking for the best exchange rates then make sure you stay in touch with our friendly currency brokers who will be happy to discuss your requirements and the options available to you. You can call straight through to the trading floor on 01494 849752 or alternatively you can email me directly on firstname.lastname@example.org
CAD Exchange Rates and Economic Data
This afternoon we have a number of key economic data releases including their Consumer Price Index (CPI) and Retail Sales figures. Neither of these figures are supposed to be overly positive so there is a chance that we could see the Canadian Dollar weaken today which could result in some good opportunities to buy Canadian Dollars. Canada is the 11th largest economy in the world and with its exports heavily reliant on crude oil the fact that we have seen oil prices fall means their economy is under pressure and subsequently means we could be likely to see the Canadian Dollar move which means if you need to send money to Canada stay in close contact with your account manager so we can keep you informed of the latest movements.
This morning we have the latest European forecasts due which may give us an insight into how the Euro is likely to perfom over the short to medium term. Should we get a positive report we may see yet more confidence flow to the EUR making it stronger but the reverse is also possible. So, if you need to buy Euros then speak to us today. We can offer a number of different contract options and so are well placed to help you minimse your risks in the currency markets and make your transfers happen as cost effectively as possible.
If you need to send money abroad make sure you speak to one of our experienced currency brokers today so they can discuss the options with you. You can call straight through to our dealing floor on 01494 849752 or alternatively you can email me on email@example.com
Below is a list of economic data releases that you need to be aware of if you have a pending currency transfer to carry out.
If you would like to know exactly what could happen upon the releases or would like to get the very best exchange rates on your currency transfer then feel free to contact us on the numbers on this page or to email me directly firstname.lastname@example.org
20:00 NZ NZD RBNZ Interest Rate Decision 20:00 NZ NZD Monetary Policy Statement 20:00 NZ NZD RBNZ Press Conference DEC 06 00:30 AU AUD Employment Change s.a. (Nov) 00:30 AU AUD Unemployment Rate s.a. (Nov) 10:00 EMU EUR Gross Domestic Product s.a. (QoQ) (Q3) 10:00 EMU EUR Gross Domestic Product s.a. (YoY) (Q3) 12:00 UK GBP BoE Interest Rate Decision (Dec 6) 12:00 UK GBP BoE Asset Purchase Facility 12:45 EMU EUR ECB Interest Rate Decision 13:30 EMU EUR ECB Monetary policy statement and press conference DEC 07 10:00 EMU EUR ECB President Draghi’s Speech 13:30 CA CAD Net Change in Employment (Nov) 13:30 CA CAD Unemployment Rate (Nov) 13:30 US USD Nonfarm Payrolls (Nov) 13:30 US USD Unemployment Rate (Nov)
The Pound has made minor gains against the majority of majors this morning, following GDP figures coming out slightly better than expected at 1% growth compared to the forecast of 0.9%.
Again although the Olympics may be partly down to this it does suggest the U.K is still creeping in the right direction and that initial GDP figures released last moth were virtually spot on.
The Greek agreement did not dent rates for GBP-EUR too much which is good news for those looking to buy Euros and maybe suggests that rates may start to creep back up again towards the 1.25 level.. Of course who knows what is around the corner though in this current climate.
The minutes from the Bank of England monetary policy meeting this morning have not led to any huge surprises and once again we have had what can only be described as a fairly stable morning of trading for the Pound so far.
Next on the cards is GDP figures for Germany on Friday which has the ability to kick the Euro rate back into action one way or another but again the way the market has been of late I don’t expect anything major to happen… Expectations are for growth of 0.2% so should this be slightly out and lead to a negative figure then there is the slight chance we would see weakness for the Euro.
This week there are a number of important economic data releases that are due for release which could cause volatility in the currency markets. So, if you need to transfer money abroad and you are looking for the best exchange rates make sure you speak to one of our experienced currency brokers today who will be happy to discuss your currency requirements, the options open to you and how these economic data releases could effect your currency requriement.
Monday – This morning we have already seen the Rightmove House Price Index released which has shown that UK property prices have increased year on year which is good news for the economy and may provide some strength for Sterling exchange rates. Later today we have US housing data which will show the number of new houses sold in America which as per the UK housing figures could impact US Dollar exchange rates.
Tuesday – The Bank of Japan are expected to release their latest interest rate decision where rates are expected to stay on hold at 0.1%. The Reserve Bank of Australia are also due to announce the minutes from their last interest rate decision which will give an insight into their Central Banks opinion of the Australian economy.
Wednesday – The Bank of England minutes are set to be released at 9:30am and will give an insight into whether the BoE considered any further Quantitative Easing (QE) and who if any, voted for a change in interest rates. This is often an important data release for Sterling exchange rates.
Thursday – A key focus for the markets on Thursday is the European Council Meeting where it is expected that all the leaders of the Eurozone will attend and the economic issues of the single currency economy will be discussed. One of the main issues that will be on the agenda is Greece’s 2 year extension and how they can put together an austerity plan that will see them get out of their current 5 year long recession. Also to note, on Thursday it is Thanksgiving day in America so US markets will be closed.
Friday – The Eurozone meeting continues into its second day on Friday so it will be interesting to see whether there are any major developments. To end the week we also have German Gross Domestic Product (GDP) figures, Italian Retail Sales, British mortgage approvals and finally Canadian Inflation data.
To contact one of our experienced currency broker you can call straight through to our trading floor for free on 0800 328 5884 or if calling from abroad call us on 0044 1494 725353 or email me directly on email@example.com
Greece has passed a vote in Parliament which paves the way for the next tranche of bailout funds. The immediate reaction has been to strengthen the Euro although I think many expected this to pass off uneventfully.
Interesting events this week are contained within the UK Unemployment figures due Wednesday. Last week it was announced the Bank of England will give the interest earned on Quantitative Easing to the Treasury, some £35 bn in total scheduled in payments. This will help the Treasury in its aim to cut the budget deficit although we will learn more on Tuesday with the Bank of England Inflation Report.
Whilst it has started to fall, GBPUSD is still not to far off the magic 1.60 level and GBPEUR is flirting with 1.25. These represent excellent buying opportunities and with sterling looking likely to have a tough week ahead anyone with an interest in the pound would do well to take stock of current rates.
For a free, no obligation discussion of all the events surrounding your currency transfers please call the office and speak to one of our dedicated team to find out what is happening on your exchange rate.