Osborne’s Budget

Yesterday afternoon, in his seventh budget as chancellor and the first for a Conservative majority government in almost 20 years, George Osborne delivered his highly anticipated budget.

Some of the key points from the budget are as follows:

  • The UK economy is growing at a faster pace than any other G7 nation - growth forecast of 2.4% for 2015.
  • An introduction of a new living wage for over-25s of £7.20 per hour, rising to £9 p/h in 2020.
  • A rise in personal tax allowances to £11,000.
  • Billions set to be cut from tax credits and Student maintenance grants to be scrapped.

Whilst there was no immediate impact on the currency market, Osborne’s stance was extremely bullish, which will help to boost investor confidence and should therefore bolster the strength of the Pound going forward.

Will Greece Reach a Deal This Week?

Where Osborne’s budget would have usually taken centre stage in currency market news, it is unfortunately the situation in Greece that’s still dominating the headlines.

Following months of negotiations, it now seems that if an agreement is not reached by Sunday, a Grexit will be on the cards, and it’s this uncertainty over Greece’s future that has been weakening the Euro so dramatically.

With around €500mn left in the banks, Greece has submitted a new bailout request that they will hope to have agreed by Sunday’s deadline. It is reported that they are looking for a three-year deal worth upwards of €50bn.

In return they will ‘commit to a comprehensive set of reforms and measures to be implemented in the areas of fiscal sustainability, financial stability, and long-term economic growth‘.

We saw GBP/EUR slide by over 1% during yesterday’s trading and those buying Euros who have been holding out for a better deal will be kicking themselves this morning. As such, I would urge anyone who has an upcoming Euro purchase to speak with one of our experienced brokers right away, to put a plan in place that can help you benefit from rates today whilst they are still favourable.

If a deal is reached by Sunday’s deadline, I think it’s highly likely we will see GBP/EUR fall further still, possibly as low as 1.35, so moving sooner rather than later could be a very sensible and cost-effective option. We offer a range of contracts that can help you benefit from today’s rates. Learn more about currency exchange contact options.

FOMC Minutes Dovish on Global Uncertainty

Yesterday evening, the Federal Reserve’s minutes from their latest meeting were released, giving us an insight in to future economic policy in the States. With the uncertainty still surrounding the future of the Eurozone, the minutes were extremely dovish, with yet another delay expected for when interest rates will be raised from their record lows.

Notes from the minutes stated that a majority of the FOMC members still felt that further economic indicators were needed to show improvements to avoid making a premature decision on the timing of a rate hike.

This has added further pressure to the US economy’s upcoming data releases and this afternoon’s jobless claims figures will be no exception to that. If an unimpressive figure is released this afternoon it will back up the Federal Reserve’s dovish tones and could therefore weaken the US Dollar considerably, potentially offering some excellent spikes for USD buyers.

Tomorrow afternoon at 17:00 Janet Yellen is speaking and if her comments echo the negative sentiment from last night, further Dollar losses could be on the cards. In my opinion, anyone selling USD should therefore consider their options carefully this morning to avert this potential volatility. To speak with one of our experienced team call the trading floor on 01494 725353 or contact us here.

AUD Spike

Anyone selling AUD has seen a noteworthy spike in their favour this morning following better than expected jobs figures overnight. Unemployment fell ever so slightly in June, coupled with a huge rise in those in full time employment.

These figures, coupled with the fact that the Reserve Bank of Australia kept interest rates on hold earlier this week have helped the AUD gain over 1.5% against the Pound in the past few days. Learn more about sending funds to Australia.

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