This report will cover current exchange rates and how you can can get the best exchange rates for your foreign money transfers.The last month has proved a particularly unpredictable time for buying foreign currency. See here the extra currency you could have made by trading versus the high and the low. Note we have seen a 20 month high on the Euro and a 3 month high on the US Dollar!
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
UK ECONOMY FOCUS – Can the UK economy contiune to grow in the current climate?
The coalition government faces an ever trickier task in striking the right balance between the necessary cuts to tackle our budget deficit and fostering the job creation necessary to create growth. Whilst the UK is heading in the right direction at present, the route ahead is rocky. Spikes in the market do appear, so to try to anticipate these speak to your account manager at Foreign Currency Direct. The last week saw a Euro spike of 4 cents and we are witnessing a dollar spike of equal value now!
Will the Pound regain all those cents?
Public Sector job cuts will likely lead to increased unemployment up to 2011 and beyond to 2015. Can the private sector pick up the slack? It not only has to pick up the slack, but needs to expand to a level where it is driving growth. I see the issue of how well the recovery is being managed being a weight on Sterling for many months, if not years. This uncertainty going forward may be why some of the gains Sterling makes, can be eradiacted.
Don’t Discount Dollar Debt
The focus has been on European debt in recent months. Now the markets are looking at the US. Comment from the Federal Reserve via the Federal Open Market Committee revising down growth for the rest of the year coupled with a falling Producer Price Index month on month and year on year meant the Euro and Pound climbed to over two month highs against the Dollar. The once coherent policy employed by the US to drive itself out of recession by pumping billions into it’s economy is being questioned by senior US fiscal policy makers, including Jeffery Lacker, president of the Federal Reserve Bank of Richmond saying he opposed ‘further bailing out of failing banks’. I’d expect the unease to continue with Consumer Price Index out today, possibly pushing the rate slightly higher.
STRESS RELATED
The issue of European Debt has been a real anchor around the Euro exchange rate. Despite the alarming issues the Euro faces – Italy and Greece’s debt levels stand at roughly 120% of their GDP – it has shown reslience and bounced back, against Sterling and the Dollar. Recent tests of European bank liquidity were positive and the Stress Tests, results due end of July may well echo this. Those with Euro requirements may wish to capitalise on what are still very attractive GBPEUR levels. Let us not forget that only a few months ago, the issue of parity with Sterling was being discussed. Speak to your dedicated broker about a forward contract, just one of the many ways we can safegueard your currency transfer.
MARKET DATA RELEASES TODAY
-EUROPE: TRADE BALANCE 10.00 GMT
The difference between imports and exports. The predicted decrease may weaken the Euro so speak to us to see how.
-USA: CONSUMER PRICE INDEX: 13.30 GMT Following yesterdays falls in Producer Price Index, expect this data to also show a fall in the purchase power of the USD for US consumers, this could weaken the dollar. Call us to see how.
Friday’s Market Movers! – Where I think the pair could go today
Currency Pair Rate could go…
GBPEUR <
GBPUSD <
GBPZAR <
GBPAUD =
