The pound continued its run of losses yesterday following comments from Bank of England deputy governor Charlie Bean. He made clear that there was absolutely no urgency in raising interest rates and that it all depends on how the economy unfolds. The tone is considerably weaker than Mark Carney’s comments at the last meeting and the markets are adjusting accordingly. GBP EUR has the potential to slide a little further although it would be surprising to see rates move lower than 1.1650 where support should be found for this pair.
EU Industrial production data came in better than expected at 2.1% which is a welcome boost for the Euro. Although the EU recovery is far from stable the mood has improved slightly. Later this morning sees the ECB monthly report which is a good barometer of the current economic situation in the Eurozone. A stronger outlook would reinforce Mario Draghi’s comments last week. It could mean this recent rally for the Euro may have a little further to go. Buyers of Euros may wish to take advantage of current rates whilst they are still not far off the recent 1 year high.
A European Central Bank (ECB) board member Peter Praet stated yesterday that the central bank is ready to use non-standard tools to deliver stable prices and that new measures may be needed. Although no action has been taken yet, it could pave the way for some Euro weakness later this year. Any further appreciation in the Euro could also trigger such action and effectively push the ECB into more foreign exchange manipulation, like so many other central banks are currently doing! It’s definitely something to be aware of going forward!
With little US data yesterday eyes focussed on US mortgage applications which arrived in negative territory. Today sees a raft of data including jobless claims and retail sales which could create some excellent opportunities. Good numbers here could complement the strong non-farm pay rolls last Friday and could finally help turn things around for the dollar with a move lower to 1.62 for GBP USD still on the horizon. For more information on how we can assist with a transfer of dollars then please click here.
The Reserve Bank of New Zealand raised interest rates last night to 2.75% as expected. Further rate increases are also expected at the April and June meetings which should support the kiwi further.
For anyone needing to buy New Zealand dollars then this now may be sensible time to review as there should be potential for GBP NZD to move lower to 1.90.
Australian employment figures released overnight came in considerably better than expected which has given a short tem boost for the Aussie. Australian home sales came in worse than expected yesterday showing no growth at all whilst a consumer confidence survey saw the weakest reading in 10 months. The price of copper, which is often used as a benchmark as to future fortunes in China has also fallen to a 4 year low which should only add to the Australian woes being Australia’s biggest trade partner. The Aussie could be set for some tougher times, which is why there should be some more room left in the GBP AUD rally. For live interbank exchange rates click here.
To discuss how these issues may affect your requirement call us on 0800 328 5884 or 01494 725 353 or e-mail me directly firstname.lastname@example.org.
James and his colleagues are always courteous and helpful. I have also never been able to find rates of exchange that are more competitive. I am particularly impressed with the service, as I am not in the habit of transferring massive amounts!
As always a really quick and easy transaction. James is very knowledgeable and helpful. Great rates.
Always helpful and they always give rates at the very top of the range. Quick transfers to our french bank account – highly recommended. Well done James Lovick 😉