Cyprus Impact on Euro

Cyprus continues to remain the major issue for Euro exchange rates this week with the Cypriot banks set to remain closed until tomorrow. When they do reopen there will be ‘temporary restrictions’ in the form of capital controls preventing funds actually leaving Cyprus – We find out by 10am this morning. Ironically there have been reports that large volumes of funds have already left the banks! Expect major volatility for Euro exchange rates as there is likely to be high drama in Cyprus and a good chance of those classic scenes of people queuing outside banks tomorrow.

Rates for GBP EUR have climbed 4 cents higher over the last two weeks presenting a good opportunity to buy Euros. Although there is still uncertainty surrounding Cyprus these issues should be resolved soon and confidence restored back to the Euro. Extended gains for GBP EUR seem likely in the short term but there is a real risk of a fall back to 1.14 soon after. Register for an account today to access the best exchange rates by clicking here.

Banks in Europe – Are my funds safe?

UK Piggy BankThere has been a seismic shift this week on how banks on the cusp of bankruptcy will be dealt with. If this becomes a template then it will no longer be just the government and taxpayer who foot the bill, but now uninsured deposit holders. What this means, is that if you are holding over €100,000 in a Spanish or Italian bank account for example, and that particular bank needs recapitalising then you could be subject to lose all, or part of your savings over that amount. It is estimated that in Cyprus it is likely to be a staggering 50%! For anyone holding surplus Euros overseas, not just in Cyprus, this may be a good time to look at moving funds to safer shores. If you would prefer to have your savings back in Blighty then please contact me directly at jll@currencies.co.uk. To see how your funds are secure with Foreign Currency Direct please click here.

Sterling Rates Before UK GDP

Revised UK GDP figures for the fourth quarter are released this morning. Expectation is for no change although discrepancies can occur, which can create market movement for the pound. UK Gfk confidence figures for March are released overnight and are expected to show a very small decline on the already gloomy picture. Considering there has been some better UK data releases including stronger retail sales last week then there is a chance there may be an improvement which would lend support to the pound tomorrow.

US Dollar Remains Safe Haven

The US dollar has been giving some mixed signals after conflicting data yesterday. Consumer confidence came in lower than expected although durable goods orders jumped considerably higher. This afternoon sees pending home sales which should give some more direction for the dollar. The mood on the whole has been much better in the US with some regular impressive numbers - A move back below 1.50 for GBP USD in the short term seems very likely, especially if there is a flight to safety to the US from the Eurozone.

AUD / NZD Exchange Rates

The New Zealand dollar has been growing from strength to strength having recently shown a healthy trade surplus and the prospect of interest rate rises later this year. Australia is unlikely to cut interest rates for the time being which is helping support the Aussie. So far however neither currency has really been affected by news from Cyprus although that could change very quickly. Should there be a bank run on a more heavily indebted EU country then this pair could face some fresh weakness in the coming days creating some good short term buying opportunities and rates climbing to 1.48 for GBP AUD and 1.86 on GBP NZD. If you need to transfer money to Australia or have recently sold a property there then click here for more information.

To discuss how these issues may affect your requirement call us on 0800 328 5884 or 01494 725 353 or e-mail me directly jll@currencies.co.uk.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. 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.