The table below shows the percentage movement of exchange rates yesterday along with the extra currency you could have bought if buying with £200,000.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP EUR | 1.4% | EUR 3,360 |
| GBP USD | 0.9% | USD 2,860 |
| GBP AUD | 0.9% | AUD 3,100 |
| GBP CHF | 2% | CHF 6,360 |
This report focuses on data that may have affected exchange rates and how data today may influence the cost of buying foreign currency for currency transfer or buying property abroad as detailed below:
UK data – Sterling Falls
Swiss Franc Focus
Data Today
Market Summary
Sterling Falls on Weak UK data
There was a host of UK releases yesterday following the Bank Holiday weekend which helped contribute to sterling’s weakness dropping well over 1% against the euro.
The good news came from the GFK NOP survey which highlighted consumer confidence in the UK had in fact improved. Expectation was a for a decline and although the figures came in better than expected they did come with a warning in that they should be taken with caution with looming government cuts ahead.
Mortgage approvals in the UK rose unexpectedly in July although it was the lending figures which were the problem having fallen substantially to their lowest level since March. Net mortgage lending fell to just £86 million compared to £518 million the previous month which was probably the main driver for sterling’s weakness yesterday. Looking forward the figures draw attention to a flat housing market. As one of the engine rooms for consumer expenditure it highlights the economy is still a long way off from normality and from the currency perspective sterling is unlikely to break higher in the foreseeable future.
Swiss Francs
The Swiss Franc has continued to strengthen and reached an all time high against the euro whilst the pound fell to a 19 month low against the CHF. The strength in this currency really highlights the growing current concerns, as funds move to the safe haven currency. With this recent bout of uncertainty it would not be surprising to see continued strength for the CHF. For anyone with a CHF requirement stay in contact with your currency broker to see how this may affect your purchase.
Data Today
There are a number of important releases this morning starting with German Purchasing Managers Index (PMI) for August for the manufacturing sector released at 08:55 and the same for the Eurozone as a whole at 09:00. UK PMI also for the manufacturing sector is released at 09:30. With Eurozone unemployment still running at 10% these releases could shape the markets today.
Expect to see a lot of movement on the US dollar later as there are a number of releases including US mortgage approvals and employment data. The ADP employment change for August is released at 13:15 and is expected to show a small improvement of 20,000 down from 42,000 the previous month. With so much riding on the state of the US economy these releases are likely to have a big impact today. Non Farm Pay rolls this Friday will also be key.
US Minutes & Market Summary
To sum up the mood it all comes back to concerns on the sustainability of the global economic recovery. The focus is on the US with worries that their slowdown will continue to gather pace, which is likely to have a knock on effect on other economies and the UK. The Federal Reserve minutes last night stated “The committee would need to consider steps it could take to provide additional policy stimulus if the outlook were to weaken appreciably further,” which really highlights how delicate the recovery is.
