The US$ has gained against sterling which isn’t a surprise given sterling is the weakest currency over the last year losing 15% on a trade waited basis. But it has been suffering against the euro, although it did pull back from one year lows, and other currencies given its dual deficits of budget and balance of payments. The Federal Reserve met this week and overall its announcement was positive on the economy with signs of improvement but cautious on the speed of the recovery given the surplus capacity that existed. Therefore US interest rates will be kept at current levels for quite a while. The US has committed to better fiscal management given that for the US$ to maintain the status of the world’s reserve currency then it will have to convince the world that it has some value.

The euro continues to be flavour of the week/month/year. Business confidence in Germany continued its upward trend albeit slightly below those predicted by the analysts. As Germany is a key driver of the euro zone economy this is positive for the euro zone. This weekend we have the German elections and it is expected to be a close run. Some market commentators are predicting the euro to approach parity with sterling by the year end [i.e. €1=£1] whereas some believe sterling to be undervalued against the euro. However sentiment at this moment in time is with the euro and as such the upside for sterling is limited whereas the possibility of parity higher.

There seems to be no limit to how far the high-yield/commodity backed currencies will go as they continue their strong run. We are seeing multi-year highs from the South-African Rand, Australian and New Zealand. However the Canadian dollar fell back slightly. Commodities have enjoyed an incredible run and I do wonder if we are will begin to see a fall back in commodity prices and a knock affect on these currencies.

Why is Currency Management So Important? Using a bank could cost you £3-4,000 per £100,000 transferred. Buying at the “wrong” time could cost you many £’000’s more as rates can move as much as 3% in a very short period of time. Then add in transfer costs that the banks charge for sending and receiving funds and you could be looking at additional costs of £10,000 per £100,000 transferred. By developing a currency strategy and by working with a specialist currency broker these losses could be minimised if not eliminated.

Smart Client Testimonial: “Thank you for making our transactions go so smoothly. As promised, our account was opened within hours. Your traders were pleasant and efficient, and each transaction was very much at the exchange rate I expected…ie not a million miles away from the inter-bank rates and certainly much better than my high street bank could quote. All in all, an easy experience and we will have absolutely no hesitation in recommending your services to any of our friends buying property abroad.” Ian Pritchard If you haven’t opened a Smart account yet, call me on freephone 0808 163 0102 (+44 0207 898 0541) or fill out our online Account Form at: http://www.SmartCurrencyExchange.com/application.htm

How much will a Property Cost? To estimate the cost of a property simply DIVIDE the price of the property by the appropriate rate noted above. But note this is based on the inter bank rate so the actual cost will be slightly more.

The US$ has lost substantial ground against most currencies over the past few months as the global economy gets back in gear and investors seek riskier and higher-yielding assets. With the exception of sterling, this continued to be the case this week despite the economy showing evidence of returning to growth and the US equity markets continuing to perform well. Encouraging US retail sale figures were released on Tuesday and suggest that public confidence is on the up with a better than expected result but the US$ will likely continue to trade on the value of its reserve currency status rather by the health and progression of the US economy.

The euro continued to advance against the ailing pound and continues to surge against the US$, as it has consistently done since March of this year. Flattered more by the depreciation of other currencies rather than by any particularly positive news in the Eurozone, the euro is in the ascendancy. There seems to be little chance of seeing any increase in official interest rates from the European Central Bank but with few other central banks looking likely to raise rates either and the European equity market rising steadily the euro is likely to maintain its ascendancy for quite a while.

There seems to be no limit to how far the high-yield/commodity backed currencies will go as they continue their strong run. We are seeing multi-year highs from the South-African Rand, Australian, New Zealand and Canadian dollars against sterling with few signs of this trend reversing.

Why is Currency Management So Important? Using a bank could cost you £3-4,000 per £100,000 transferred. Buying at the “wrong” time could cost you many £’000’s more as rates can move as much as 3% in a very short period of time. Then add in transfer costs that the banks charge for sending and receiving funds and you could be looking at additional costs of £10,000 per £100,000 transferred. By developing a currency strategy and by working with a specialist currency broker these losses could be minimised if not eliminated.

Smart Client Testimonial: “Thank you for making our transactions go so smoothly. As promised, our account was opened within hours. Your traders were pleasant and efficient, and each transaction was very much at the exchange rate I expected…ie not a million miles away from the inter-bank rates and certainly much better than my high street bank could quote. All in all, an easy experience and we will have absolutely no hesitation in recommending your services to any of our friends buying property abroad.” Ian Pritchard If you haven’t opened a Smart account yet, call me on freephone 0808 163 0102 (+44 0207 898 0541) or fill out our online Account Form at: http://www.SmartCurrencyExchange.com/application.htm

How much will a Property Cost? To estimate the cost of a property simply DIVIDE the price of the property by the appropriate rate noted above. But note this is based on the inter bank rate so the actual cost will be slightly more.