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Posted May 14th, 2010 by Charles Purdy

EURO/GBP – 1.165
US$/GBP – 1.458
CHF/GBP – 1.634
CAN$/GBP – 1.493
AUS$/GBP – 1.629

Sterling fell yesterday against the US dollar and euro as the UK’s trade balance widened by more than expected. In March, the UK imported £6.3bn more than it exported and in April this gap increased by more than £1bn to £7.5bn. Exports remained steady and imports jumped, which disappointed the markets. Sterling is weak compared to most major currencies and the fact that this has not encouraged foreign investment into the UK is worrying, but also shows that global demand as a whole is weak. The ongoing saga in Greece could be blamed for a lack of demand for UK goods, but this is likely to continue as the Euro zone looks to curb spending and avoid debt default. Mervyn King hinted that the UK would benefit if Germany injected funds into the economy to encourage spending and ultimately boost UK exports. Elsewhere, the new government sent a clear message of its intentions to cut spending by cutting their own pay by 5% – frozen for 5 years. Whilst this saves roughly £3m (a drop in the ocean compared with the deficit) it is a clear message to the markets. So far, financial markets have welcomed the new coalition. Unfortunately, the pound is in a poor position. If the Greek crisis spreads further, we will effectively lose demand from a major marketplace for UK exporters. Out today we have no real data for the UK, but the currency traders will keep a close eye on David Cameron as he continues to forge ahead with plans for a ‘New Britain’. Call in now for a live exchange rate.

In the Euro zone, Portugal announced tough ‘austerity’ measures including tax hikes and pay cuts for public sector workers. The measures follow yesterday’s announcement by Spain of similar cuts which were met an angry response and threats of public sector strikes. The tough measures are the price that needs to be paid for the 750bn bail out that was announced over the weekend. There was little data out yesterday, but the euro rose against sterling as sentiment improved towards the Euro zone with European stock markets up nearly 8% this week having recovered losses. There is no data out today, so expect more of the same – trading on sentiment. Call in now to get a live rate.

In the USA, unemployment claims fell by 4,000 last month, but this fell short of the expected 8,000 drop. Import prices showed a mild improvement on the month. One analyst made the bold prediction that the USD would strengthen against the euro and reach or go beyond the 1999 entry rate of $1.18/ 1 as European countries are not following budget deficit rules laid down by the Maastricht treaty. The euro’s status as an alternative to the US dollar is in doubt as a result. Out today we have retail sales data for the US which is expected to show a decline month on month. Get in touch now, as many are predicting lower than $1.40/£1 in the coming months.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

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Posted May 13th, 2010 by Charles Purdy

EURO/GBP – 1.174
US$/GBP – 1.484
CHF/GBP – 1.645
CAN$/GBP – 1.502
AUS$/GBP – 1.648

After a strong start to the day following the formation of a new government, sterling fell against the US dollar and euro. The pound hit a low of $1.4821/ £1 after opening above $1.5040/ £1. Against the euro, sterling fell from a high of 1.1830/ £1 to finish the day around the 1.17/ £1 mark. The reversal in fortune was as a result of yesterdays Bank of England inflation report, which predicted that inflation is likely to undershoot the 2% target over the next 2 years with interest rates likely to remain at record lows of 0.5% as a result. The initial optimism that boosted the pound following the announcement of a new government faded following the report, as many traders realised that the UK has a hard road ahead of it to clear the deficit which is currently running at 11% of GDP. In addition, despite the unemployment claimant count falling by 27%, unemployment rose to the highest level since 1994. The optimism of the election is likely to fade further (as we saw in the USA following the election of Barack Obama) and as a result it would be worthwhile looking at making any payments now before the pound sinks any further. Out today we have trade balance data, which can occasionally cause large movements if it comes in better or worse than expected. Call in now for a live exchange rate.

In the Euro zone, industrial production rose by slightly more than expected and an initial estimate of 1st Quarter GDP came in at 0.2% against an expectation of 0.1%. This unexpected rise helped the euro strengthen against the pound. There is little data out today as France and Germany enjoy a bank holiday, but the markets are still nervous over the Greek situation and despite the 750bn bail out, there is still a high risk of a European country defaulting. Get in touch now, as despite the bleak outlook in the euro zone we could see the pound suffer in the next few weeks as the implications of the task ahead for the next government take effect.

In the USA, today saw a marginal widening of the trade balance, but this had little effect on the US dollar which continued to strengthen against the pound throughout the day. One analyst suggested that with the scale of spending cuts, tax rises and low interest rates in the UK, we could see sterling hit $1.40/ £1 over the summer. The main data out today is US unemployment claims which are expected to drop marginally which is encouraging. In addition, there is monthly retail sales data which is expected to show an improvement and Fed Chairman Ben Bernanke addresses the Senate. Get in touch now – especially if you need to buy US dollars over the next few months.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

Posted May 12th, 2010 by Charles Purdy

EURO/GBP – 1.182
US$/GBP – 1.501
CHF/GBP – 1.666
CAN$/GBP – 1.527
AUS$/GBP – 1.676

Sterling rose yesterday as Gordon Brown tendered his resignation from office and David Cameron became our new Prime Minister, agreeing a coalition with the Liberal Democrats that sees them part of government for the first time in 70 years. After a volatile day, sterling recovered some of the losses against the US dollar that have seen the pound fall to a 13-month low as markets feared political uncertainty following the UK’s first hung parliament since 1974. There are concerns (as there always are with coalitions) that the deep rooted ideological differences between the two parties will lead to the dissolution of any agreement. However, with a rumoured 4 year ‘no-compete’ clause (i.e. an agreement from the Lib Dems that they will not vote against the Conservatives for 4 years) and the galvanising effect that tackling a record UK deficit will have, there is potential for this coalition to work. Although we shall have to wait and see, the initial reaction from the financial markets is good. The pound jumped to 1.18/ £1 and $1.49/ £1 on David Cameron’s appointment. What is next? The focus will now shift to the Conservative ‘emergency budget’ which is expected within 50 days and will outline the details of how the new government intend to deliver spending cuts of £6bn as a ‘down payment’ on the deficit within a year. Sterling was also boosted by unexpectedly strong manufacturing data. Out today we have unemployment data for the UK and the Bank of England’s inflation report. Call in now to take advantage of today’s jump in the value of sterling as it may not last long.

Following the bailout earlier in the week, the euro zone took a back seat yesterday as the UK election dominated the headlines. A piece of German inflation data showed a better than expected improvement. The big piece of data out today though is the first estimate of GDP for the 1st Quarter of 2010. This can have a large effect and is expected to show growth of 0.1%. Any higher than this and the euro is expected to react well. Get in touch now to take advantage of any movement.

In the USA, the major driving factor behind the US dollar movement against the pound was the UK election. As a degree of certainty returned, the pound strengthened against the US dollar. In other news, the investment bank Morgan Stanley is likely to come under investigation for securities fraud in a similar vein to Goldman Sachs did recently. This could cause uncertainty on Wall Street – get in touch now for a live exchange rate.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

Posted May 11th, 2010 by Charles Purdy

EURO/GBP – 1.165
US$/GBP – 1.484
CHF/GBP – 1.646
CAN$/GBP – 1.518
AUS$/GBP – 1.649

Sterling gained against the US dollar throughout most of yesterday, hitting a high of $1.5054/ £1 as speculation over a deal between the Conservatives and Liberal Democrats helped calm market concerns over the political situation in the UK. Despite being up nearly 1.7% against the US dollar, the pound fell in late trading as news of Gordon Brown’s resignation opened the doors for a potential Labour-Lib Dem coalition and left the markets as concerned as they were at the start of the day. Against the euro, the pound was fairly volatile as traders digested the announcement of a 550bn package to help Greece avoid defaulting on its sovereign debt. The announcement initially caused the euro to strengthen, but the pound recovered ground later in the day as the Bank of England kept interest rates on hold and kept the emergency funding level at £200bn. Out later today we have manufacturing and industrial production data for the month. The key market moving data is the continued uncertainty over the election. Call in now for a live exchange rate.

In the Euro zone, the euro started the day well, recovering losses against the US dollar following the announcement of a new bailout deal. The bailout saw stock markets rally by several percentage points. However, in trading early this morning, the gains made by the euro have been lost again as the wave of optimism created by the 750bn injection has given way to concerns that the support will not avert a slowdown in the region as seen in Japan in the 90’s and in the USA in 2008-09. At this stage, the bailout has eased some of the concern of the last few weeks, but the Euro zone now has a tough few years ahead of it. Out today we have had German inflation data which has shown an unexpected rise. This has had little effect on the euro though. Get in touch now to ensure you plan your next payment efficiently.

In the USA, Deutsche Bank – the world’s biggest currency trader – said that the US dollar is likely to extend its 12% gain against the euro as Europe needs more than just emergency funding to help strengthen the single currency. Looking at purchasing power parity (the equivalent cost of two identical goods in two different currencies), the bank’s ‘fair value’ exchange rate prediction for the /$ is between the 1.15 – 1.20/ $1 marks. Following yesterday’s bailout the US stock markets surged by nearly 4%. Out today, we have some minor economic data which is unlikely to have any effect. Get in touch now for a price.

Elsewhere, Chinese inflation jumped 2.8% since last April and with inflationary measures building, the country’s economy is at risk of overheating. This builds the case for stronger interest rates in the country and a revaluation of the currency to allow it to strengthen. The Chinese yuan is ‘pegged’ (i.e. fixed) against the US dollar. Any revaluation of this could impact UK importers as prices of goods in the country will rise. Additionally, yesterday saw the Polish zloty’s biggest daily gain ever – gaining over 2% against the pound as the currency benefited from the European bailout. However, the currency has reversed some of these gains this morning. Get in touch now to ensure you don’t miss out.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

Posted May 10th, 2010 by Charles Purdy

EURO/GBP – 1.143
US$/GBP – 1.495
CHF/GBP – 1.638
CAN$/GBP – 1.529
AUS$/GBP – 1.649

After a turbulent week for the pound last week, and the most closely fought election for nearly forty years, we are still in store for a turbulent week on the foreign exchange markets. Sterling recovered marginally from Friday morning’s lows against the US dollar as David Cameron and Nick Clegg discussed the possibility of working together in a Liberal/ Conservative coalition. With discussions taking place over the weekend, the markets are awaiting clarity as to what the outcome will be. However, with both parties clear that a major priority is clearing the deficit, we should see sterling recover on the announcement of any power sharing deal. At the same time, if talks fail, we will see another fall in sentiment towards the pound. Despite political factors taking centre stage this week, there is a lot of fundamental data out too. Today we have the Bank of England’s interest rate decision (postponed from last week following the election). It is widely expected that the Bank will keep rates on hold at 0.5% and keep the emergency funding on hold at £200bn. Also, we have retail sales data for the UK. Call in now to avoid the market moving against you.

In the Euro zone, following panic last week over the risk of sovereign debt ‘contagion’, the big news this morning is the announcement of a 500bn comprehensive package to avoid the Greek crisis spreading. The package takes the form of loan guarantees and the European Central Bank pledged to conduct ‘interventions’ in public and private debt markets to ensure ‘depth and liquidity’. This is to all intents and purposes the same as the quantitative easing programme that the US, UK and Japan put in place in 2008. This announcement has seen the return of (some) confidence in the Euro zone and as a result, the euro has jumped back over 1.30/ $1 and has strengthened by 1.5% against sterling. Despite this, UBS and Barclays Capital investment banks both see the euro hitting a ‘fair value’ of 1.20/ $1 in the next few months. Get in touch now to make sure you are protected from these movements.

In the USA, the US dollar has dropped in early trading this morning following a return in broad appetite for risky assets. The US dollar is down nearly 1% since last week against the pound and is currently trading at $1.4925/ £1. The focus for the week in the USA is the numerous speakers from the Federal Reserve and some fundamental data out towards the end of the week. We have seen incredibly high volatility in the last 2 weeks – call in now to make sure you take advantage of the movements.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

Posted May 7th, 2010 by Charles Purdy

EURO/GBP – 1.150
US$/GBP – 1.462
CHF/GBP – 1.630
CAN$/GBP – 1.539
AUS$/GBP – 1.647

Sterling has had a rollercoaster ride over the last 24 hours. We saw it hit 1.1860/ £1 at one point yesterday, before falling to a low (at the time of writing) of 1.1532/ £1 as sterling goes into freefall this morning as current predictions point to a hung parliament. Against the US dollar, the pound plunged as the first exit polls were released at 10pm last night and hit $1.4598/ £1 – the lowest level in over a year. Sterling is currently trading at $1.4710/£1, but could drop considerably further depending on how the day develops. The huge volatility was as a result of panic selling as concerns over the spread of European sovereign debt sent shockwaves through global markets. This panic hit stock markets and at one point yesterday in the USA, the Dow Jones was down over 1000 points – the most since the height of the credit crunch. The FTSE slipped over 5% and is on track for the biggest weekly fall since March 2009. With current results showing that a hung parliament is the most likely outcome of the election, sterling took back gains made against the euro yesterday. With complete uncertainty as to who will be the next prime minister, especially with Gordon Brown seemingly keen to cling onto power despite a huge swing to the Conservatives. Call in now for a live price, as a lot could happen over the course of the day.

In the Euro zone, rioting gripped the Greek capital for a second day as members of the public protested against the terms of the recent 110bn ‘austerity package’. The Greek parliament unanimously approved the terms, which impose harsh cuts on public spending, tax increases and caps on public sector salaries. The fear over ‘contagion’ spread is likely to grip markets further today. The euro took a huge hit yesterday and has fallen to near historic lows of 1.25871/ $1 against the US dollar. Analyst predictions of 1.20/ $1 is looking more and more likely as we continue to see absolute panic over the state of the Euro zone. Call in to ensure you don’t miss out.

In the USA, the Dow Jones recovered slightly after posting a 1,000 point drop yesterday and VIX (a measure of volatility in global financial markets) spiked above 40 for the first time since autumn 2008, when panic over Lehman Brothers caused huge movements across all asset classes. This shows the gravity of yesterday’s situation, as panic over Greece and concerns over the UK’s political situation saw investors flock to US government bonds which also saw interest rates paid plummet as demand for the ‘safe’ assets spiralled. Today we have non-farm payroll in the USA, which still has potential to cause further movement, especially if it comes in at anything more or less than expected. Call in now for a price on US dollars, as we could see absolutely anything happen in the next few days

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

Posted May 6th, 2010 by Charles Purdy

EURO/GBP – 1.175
US$/GBP – 1.503
CHF/GBP – 1.683
CAN$/GBP – 1.557
AUS$/GBP – 1.664

Sterling was very much caught in the middle yesterday as concern over the Euro zone debt crisis caused the pound to jump to a 9 month high of 1.1770/£1 against the euro, but fall against the US dollar to hit a 5 week low of $1.5068/ £1. Fears that the debt crisis would spread to other European countries made sterling a relatively better investment than the euro, and with the polls opening today, the pound suffered against the US dollar as the latest opinion polls showed that no party had a clear majority going into the election. The US dollar strengthened as investors bought into the perceived relative safety of the US currency ahead of the uncertainty of the UK polls. One analyst stated that in order to see a large gain against the US dollar, we would need to see a sizeable Conservative majority on Friday morning. Data out today did show that the UK construction sector is recovering at a better rate than expected, but this did little to help the pound stabilise against the US dollar. The big news today is clearly the election and the Greek situation. Expect volatile trading against the US dollar off the back of the first exit polls later in the afternoon and continued volatility throughout the day against the euro. Call in now if you need to buy currency over the next few days as tomorrow could be more than interesting on the currency markets after the election.

In the Euro zone, the euro had a terrible day yesterday tumbling to a 9 month low against the pound and a 14 month low of 1.29/ $1 against the US dollar – over a 1% drop against the American currency. The drop was as a result of a sharp fall in sentiment towards the region as a whole as fears of ‘contagion’ – i.e. the spread of the debt crisis from Greece to other nations – left investors selling the single currency. Portuguese bonds came under fire as credit rating agency Moody’s lined up the country for a possible credit rating downgrade. Aside from this, there was little fundamental data out today. Some analysts have predicted rates of 1.20/$1 in the coming months as the disparity between the USA and the Euro zone widens. Get in touch now to look at fixing prices in and avoiding any adverse movements impacting on your payments.

In the USA, stock markets suffered on the ‘contagion’ fears with the Dow Jones and the S&P 500 markets dropping by around 0.3% each in early US trading. The US dollar rallied as a result of the panic selling of other ‘riskier’ assets such as the euro and sterling as investors moved into the relative safe haven of US government bonds, increasing the demand for US dollars and driving the value of the currency up. US fundamental data came in relatively strong as well, with ADP non-farm payroll showing a better than expected increase in the number of jobs added to the US payroll in the last month. Data in the USA is light tomorrow, but expect continued trading on sentiment towards both sterling and the euro. Get in touch now for a price – especially as we are approaching the $1.40s against the pound again.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

Posted May 5th, 2010 by Charles Purdy

EURO/GBP – 1.168
US$/GBP – 1.513
CHF/GBP – 1.674
CAN$/GBP – 1.555
AUS$/GBP – 1.666

Sterling had a mixed day yesterday falling to a 5 week low against the US dollar of $1.5090/ £1 and gaining against the euro to finish the day well above the 1.16/ £1 mark. The pound suffered over concerns that the crisis in Greece and subsequent bail out would spread to other countries. The FTSE stock market fell as bank shares suffered Greece related selling and mining companies fell as Australia announced a potential new tax on mining operations. This caused investors to sell the pound and buy US dollars. Lower than expected data on lending also added to sterling’s woes against the US currency as figures showed that month on month lending to individuals fell by £1.8bn and new mortgage approvals dropped by 3,000 on last month. Out today we have house price data from the Halifax and data on the construction sector. The election is still the biggest issue in the short term – call in now for a live exchange rate.

In the Euro zone, despite the 110bn ‘austerity package’ agreed by the EU and IMF to help Greece avoid defaulting on its debt, there is a total lack of confidence in the plan which hit the euro hard today. The single currency fell against the US dollar to a 1 year low of below 1.31/ $1 as fears spread over sovereign debt default spreading to other southern European countries. Bond markets are showing that investors expect default in Greece, Spain and Portugal. With many public sector workers in Greece on strike due to the measures imposed by the IMF, the country is in deep crisis. German retail sales unexpectedly fell by 2.4% against an expectation that the figures would remain the same. Out today, we have monthly retail sales for the Euro zone as a whole which are expected to show a marginal improvement on the month. There is a lot of volatility this week – call in now to avoid missing out.

In the USA, the number of pending home sales rose by 5.3% – more than the 3.9% that was forecast and monthly factory orders unexpectedly showed a rise of 1.3%. This led to investors speculating that the US Federal reserve would look to raise interest rates much sooner than first thought, and prompted increased demand for the US dollar – especially when combined with the drop in sentiment in the Euro zone and concerns over a hung parliament in the UK. Get in touch now to avoid missing out as we could see the pound drop into the $1.40s against the US dollar again.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

Posted May 4th, 2010 by Charles Purdy

EURO/GBP – 1.155
US$/GBP – 1.518
CHF/GBP – 1.654
CAN$/GBP – 1.539
AUS$/GBP – 1.651

Sterling has started the week relatively quietly ahead of Thursday’s general election. The latest polls show the Conservatives in front, but still lacking the required majority to take overall victory. With the prospect of a hung parliament looming, this is seemingly having little effect on the value of sterling and many analysts now feel that a hung parliament has been ‘priced in’ – i.e. already factored into the price. Another view is that a hung parliament might be a good thing for the pound, as stronger cross-party consensus would be needed to tackle the UK’s deficit. However, alternatively, traders might just be waiting to see what happens on Thursday before making a move – wary of placing large trades. Therefore expect a lot of volatility on Friday. Aside from the election, out today we have data on mortgage approvals and consumer credit, neither of which are expected to throw up any major surprises that will affect the pound. Call in now to discuss a strategy to avoid losing out over the election period.

In the Euro zone, over the weekend European ministers agreed to a 110bn bailout to help Greece avoid defaulting on its debt. The ailing economy has a repayment due on the 19th May, but the deal rests on the bailout receiving parliamentary approval in Germany in order to release funds – a factor which has concerned many traders. Aside from the Greek bailout, there was German retail sales data this morning which unexpectedly showed a monthly decline of 2.4% against an expectation of no movement. The election is likely to take centre stage alongside the Greek situation – get in touch now to avoid losing out on any payments you have to make in the next few days.

In the USA, following last week’s decision to keep interest rates on hold at the 0%-0.25% target rate, there is a lot of key data out from the US this week. Friday sees non-farm payroll figures which are expected to show an increase of 190,000 jobs for April. In addition, there is manufacturing data and factory orders released today. As has been the trend over the last few weeks, the US dollar price is the risk gauge for sentiment towards the UK. Call in now to avoid missing out.

Exchange rates change every second – call Smart Currency Exchange for a live up-to-the-minute quote on our Freephone number: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or fill out our online quote form at: SmartCurrencyExchange.com/quote.aspx

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