Overnight we have heard 7 banks including HSBC and RBS are to be questioned in the US about the interbank lending rate. While the banking sector is facing enough problems this negative publicity could damage it further so it will be interesting to watch how this story plays out in the coming weeks and the effect it has on Sterling.
This morning at 9:30am we have the UK Retail Sales figures due for release. These show how the UK High Street has performed over the past month and may be one of the first economic figures to show what effect the Olympics have had on the UK economy. Some analysts have claimed that the build-up to the Olympics will have helped boost retail sales while others believe that the Olympics could have a negative effect as shoppers stay home to watch the Games rather than hit the high street. As a result this data release will be eagerly anticipated and could have a big impact on the exchange rates this morning.
Following the retail sales figures, at 10am we will see the latest inflation figures for Europe in the form of Consumer Price Index. Earlier this week we saw the disparity between some of the EU countries in terms of their Gross Domestic Product figures which highlighted the problems the European Central Bank face in managing the current economic issues the single currency economy faces. Should inflation figures come out better than expected and show some steady growth in prices then the weak GDP figures from earlier in the week may be forgotten and we may see GBP EUR exchange rates push back down towards the 1.2550 level.
Figures from the Office for National Statistic yesterday showed that the UK’s unemployment fell during the second quarter of 2012. The figure was marginally better than expected and resulted in Sterling strengthening during the course of trading up by close to a cent presenting clients with some excellent opportunities to buy Euros.
Following the positive unemployment date the Bank of England released the minutes from their last interest rate decision where it showed that all nine members voted to keep interest rates on hold. While the minutes showed that none of the members voted for an increase in the Quantitative Easing (QE) scheme some members did mention that they thought it would need to be extended in the coming months.
In the past we have seen that just the mention of QE can have a negative impact on Sterling so should we see further monetary stimulus in the coming months it is not unthinkable to see Sterling fall from its current high levels. So, if you need to send money abroad and are looking to make the most of the current highs speak to one of our experienced currency brokers today.
While Sterling US Dollar exchange rates have remained fairly flat recently today sees two key economic data releases that could be the catalyst for some large movement. US jobless claims and then the FED manufacturing survey are both released today. Should we see better than expected employment figures or improved manufacturing figures we could see the Dollar strengthen and we could push down towards the year low of 1.5234. It may not be unsurprising to see positive figures as US industrial figures yesterday showed some of the best growth seen all year. So, if you need to buy US Dollars speak to one of our knowledgeable currency brokers before the data release to discuss the options available to you.
This afternoon the Bank of Canada is due to release its latest report on the Canadian economy. This report will give an insight into the performance and predicted performance of the Canadian economy and therefore could set the tone for the Canadian Dollar movement over the coming weeks and month. To find out more about this and the other factors discussed in the report call straight through to our trading floor for free today on 0800 328 5884 or email us on email@example.com
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