This report will discuss the issues that could affect currency exchange today. Focus will be on:
Will the crash witnessed during the end of2009’s summer be repeated in 2010? Sterling has endured a traumatic opening week of September and it’s looking ever more likely
- Recent GBPEUR movements and why?
- US non-farm payroll figures
- Swiss inflation
- European retail sales
Market Snapshot
The table below shows the difference in currency you would have been able to purchase if buying today compared to August’s high point:
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP USD | -3.7% | $16,740 |
| GBP EUR | -2.0% | €24,240 |
| GBP CHF | -7.5% | CHF 27,000 |
As shown above, the pound has been on a torrid run of form throughout the last week or so, but why?
Recent GBPEUR movements
Keen watchers of GBPEUR currency rates over the last week will have seen some very sharp movements, with losses for the pound against the Euro for three days running now.
Over this time we have had poor manufacturing and construction PMI, and Nationwide house price figures. Even an upward revision of UK GDP figures last Friday couldn’t prevent the pound from losing against the Euro.
With sterling euro e
xchange rates currently still not far off a 20 month high, it may be prudent to cast your mind back to how exchange rates moved as the summer drew to a close last year.
The graph shows GBPEUR movements through August and September. Possibly more importantly, the dotted line shows where GBPEUR may be come October if the same pattern is followed.
If you have a requirement to buy Euros in the coming weeks, could you afford for the same to happen? Speak to one of our experienced currency brokers today to find out how you can safeguard your rate of exchange, even if you do not have full availability of funds.
US Non-Farm Payroll Figures
At 1.30pm today we have the release of what has been described as the most unpredictable data release on the foreign exchange calendar. The US non-farm payroll figures show the amount of people in work excluding the agricultural sector, a figure that’s expected to show a contraction of 105,000.
The data release can create large volatility, not only for GBPUSD exchange rates but also other currency pairings due to the knock on affects to the global economy as detailed in previous market reports. The simple rule would usually be if the figures show more people in work, expect US Dollar strength, and the opposite for the greenback in the case of a contraction; this isn’t a guaranteed however.
With the amount of people out of work in the US seemingly increasing day by day, and continued speculation of a double dip recession in the US, why have cable exchange rates recently been moving as shown in the table?
Reports showed this week an increase in global currency trading by 20%, up to £2.6tn. The US Dollar accounts for a massive 85% of these trades, showing the significance once again of the US Dollar as the global currency. This is one of the main reasons why I believe we haven’t seen that sustained run of form for GBPUSD exchange rates some people have predicted. A trend I can’t see changing all too quickly so if you have a requirement to buy US dollars it may be worth contacting FCD today, be it any size transfer , you are only moments away from award winning exchange rates.
Swiss Inflation
This morning at 8.15am we have the release of the Swiss CPI figures for August. CPI is a key indicator of inflation, and as regular readers may be aware inflation generally is seen as positive for a countries currency. If as expected we see the deflation Switzerland has been experiencing recently wiped out we may be heading ever closer to 1.50 for buying the franc.
European Retail Sales
For those with a Euro requirement, a key release of today is retail sales figures from the Eurozone at 10am. Once again, the forecasts are for an increase in spending on the continent’s High Streets. Higher retail sales generally implies improved confidence in an economy and in turn contributes to higher GDP levels so if the figures do show growth expect to see the cost of buying Euros increase for the fourth day running.
If you have any questions on how these or any other releases may affect your transfers, feel free to call me on FREEPHONE 0800 328 5884
The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same. Accordingly, FCD accepts no liability whatsoever arising out of the use of or access to this website or the unavailability of this website. You use this website at your own risk. FCD does not warrant that the use of this website or any material downloaded from it will not cause damage to any property. FCD takes reasonable steps to keep this site safe but in using this site you are nonetheless subject to the inherent risks of the internet including loss of data, computer virus infection, spyware, malicious software, trojans and worms and FCD accepts no liability for the same nor any loss or damage arising out of changes made to the content of this website by unauthorised third parties. No responsibility is accepted for the content or accuracy of linked sites. This website is © Foreign Currency Direct plc.
