This report will examine how current exchange rates have moved and how you could be getting the best exchange rates for your foreign money transfers. This may include buying property abroad or sending money overseas.
Economic confidence returns for the euro and to an extent sterling, while confidence is the issue plaguing the US dollar
- UK confidence boost
- Dollar weakness
- Reduced Euro Debt Fear
UK Consumer Confidence gives a STERLING boost
A survey by the Confederation of British Industry showed that retails sales rose by their fastest pace in three years for June to July. This helped the pound to rally late on marking a 5 month high against the dollar and clawing back some ground against the euro. The table above shows just how much in particular has been lately making a great opportunity for buying dollars. The dollar and the US have had their own issues leading to weakness however.
US DOLLAR weakness of late
The US dollar has fallen to its lowest level against sterling since February. Why is this? Well as well as investors increased apetite for risk following positive stress test results which will be discussed later, the US economy appears to be slowing down and all the data releases lately are of reduced confidence. The Conference Board who conduct a survey of consumer attitudes noted consumer confidence had fallen to a low not seen since February as reflected in sterlings strong trading position against the Greenback. To find out whether this will continue or secure deals at current highs speak to a Foreign Currency Direct broker.
EURO strength to remain
The Stress Test results have now been issued and widely digested by the international markets. The general concensus is that the tests could have been more stringent. There is however a recognition from the tests there is enough liquidity in the European financial system to withstand another crisis, just not a particularly bad one. There is very important Consumer Price Inflation Data out for Germany today – measuring the rise or fall in cost of goods for the Germans. This will be watched closely and could move the market. I would anticipate a small rise leading to Euro strength.
Reduced European Debt fears promote RISK AVERSION
A reduced fear of European Debt default has increased investors appetite for risk, further weakening the dollar and notably the Swiis Franc. As you can see from the table the CHF movement has been over 4% from the last weeks high to low. So where has all this money gone too?
Well Investors have returned faith to other currencies such as the euro and an extent sterling. The Ozzie and Kiwi had also benefited from this lately but important data on Australia and New Zealand shows that they may now be suffering from reduced investor confidence.
BREAKING NEWS
Australian CPI – Consumer Price Index – released 0230 GMT today The figures were down on the predictions for year on year and month on month. This perhaps means the Australian economy is slowing down. A booming housing market and industry has kept Australia recession proof. Could they now be faltering? Keep in touch with your broker at FCD to find out how this shapes the Kangaroo currency.
New Zealand Business Confidence – released 0400 GMT today This report carries some weight due to being carried out the National Bank of New Zealand. The figure was down quite significantly and this has already weakened the currency slightly today. This improves the significance of their interest rate decision.
I predict the US dollar will strengthen slightly to the end of this week as US GDP figures come in slightly better than expected. But the current volatility will continue as investors continue to be unsure of which currency represents the best investment and uncertain economic conditions prevail.
MARKET DATA RELEASES
German CPI Data – Time TBC Year on Year and Month on Month: Key report assessing inflation for the euro Giant
NZD Interest Rate Decision: 2200 GMT – Any increase or decrease could be key to the movement.
If you have any questions on how these or any other releases may affect your transfers, feel free to call Jonathan Watson on FREEPHONE 0800 328 5884 or email
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