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Posted February 28th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1707
US$/GBP – 1.6200
CHF/GBP – 1.5001
CAN$/GBP – 1.5810
AUS$/GBP – 1.5934
ZAR/GBP – 11.296
JPY/GBP
– 132.34
HKD/GBP – 12.612
NZD/GBP – 2.1523
SEK/GBP – 10.2921
US$/EURO – 1.3826

Sterling fell on Friday as data showed that the UK economy contracted by more than had initially been anticipated for the 4th Quarter of 2010. The 2nd estimate showed a contraction of 0.6% against the previous estimate of 0.5%. As a result, sterling slumped to a 3 week low against the euro and dropped against the US dollar. The correction left many analysts questioning whether interest rates would now be increased, but there is still an expectation that rates will be hiked by 0.25% before June. This should see sterling remain above or around $1.60 against the US dollar, but further negative data will have an impact and knock sterling. It is a quiet day for data today, but later in the week we have house price data and a wide array of PMI purchasing manager data which will give an idea of activity in the services, manufacturing and construction sectors so call in now for a live exchange rate.
 
In the euro zone, it seems that with all the focus the Middle East and North Africa, many have forgotten about the euro zone debt crisis. European leaders have been unable to find a solution still but talk of inflation and interest rates has kept the frenzied bond selling at bay for a few months. It is a big week in the region though, with the European Central Bank rate decision on Thursday and a number of bond auctions throughout the week which could cause the markets to remember all their concerns over peripheral European debt.
 
In the USA, tensions caused by uprisings and protests in the Middle East and North Africa have had a large effect on the price of oil and the US dollar did not follow ‘normal’ risk averse buying patterns. With concerns over the impact on US foreign policy of widespread upheaval in the Middle East, the Swiss franc was the major benefactor of last week’s tensions. In the USA, the big event of the week is Friday’s non-farm payroll figures so call in now for a live exchange rate.

Elsewhere, the Canadian dollar hit its strongest level against the US dollar in nearly 3 years as the country’s largest export – crude oil – posted the largest weekly price gain since 2009.

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Posted February 25th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1666
US$/GBP – 1.6111
CHF/GBP – 1.4950
CAN$/GBP – 1.5821
AUS$/GBP – 1.5938
ZAR/GBP – 11.332
JPY/GBP
– 132.14
HKD/GBP – 12.560
NZD/GBP – 2.1516
SEK/GBP – 10.274
US$/EURO – 1.3813
 

Sterling fell across the board on Thursday as a spike in oil prices saw investors look to safer haven currencies on concerns over the global recovery. As a result, sterling slipped to a 3 week low against the euro and dropped off Wednesday’s 3 week high against the US dollar. The pound was boosted on Wednesday following the Bank of England’s meeting minutes that showed an increased likelihood of an interest rate hike, but this rally soon ran out of steam as risk aversion saw global risk aversion and a move to safer currencies. Out later today we have a 2nd estimate of the recent GDP figures – this could cause some volatility, so call in now for a live exchange rate.
 
In the euro zone, the euro benefited from yet further talks from a key European Central Bank policymaker over interest rates. Axel Weber boosted prospects of a rate rise, stating that the only way for interest rates to go was up. Inflation in the region has been creeping up so, like the UK, markets now expect an interest rate hike in the coming months to deal with inflation. Out today we have some loan and spending figures.
 
In the USA, oil prices stayed around 2 ½ year highs as concerns over supply have seen the price shoot up. Whilst oil prices dipped slightly on reassurances from Saudi Arabia that it could counter the disruption to supply, tensions in the region have kept investors very concerned. The US dollar – especially US government bonds – have been in high demand as investors look for safe haven assets in times of geopolitical turmoil. Call in now for a live exchange rate.
 
Elsewhere, the Swiss franc has been a key benefactor of the Libyan crisis, with high demand for the traditionally safe currency. Despite all the talk of interest rate hikes in Europe and the UK, Switzerland might actually be closest to raising interest rates, so if you need to buy Swiss francs, we could see sterling drop much further in the coming months so call in now to avoid losing out. 

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

 
 

 

Posted February 24th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1776
US$/GBP – 1.6144
CHF/GBP – 1.4959
CAN$/GBP – 1.5964
AUS$/GBP – 1.611
ZAR/GBP – 11.5065
JPY/GBP
– 132.18
HKD/GBP – 12.5851
NZD/GBP – 2.1711
SEK/GBP – 10.388
US$/EURO – 1.3707
 

Sterling gained against the euro and US dollar yesterday as another member of the Bank of England’s monetary policy committee voted for an interest rate hike. Sterling hit a high of $1.6272/£1 – the highest since Feb 3rd – after Bank of England Chief Economist Spencer Dale joined Martin Weale and Andrew Sentance in calling for higher interest rates to deal with stubbornly high inflation. Consumer Price Inflation currently stands at 4% and there has been increasing speculation that the Bank would increase rates as soon as May. Higher interest rates mean higher return for investors holding sterling based investments and as such, demand for sterling increases and the pound strengthens. However, a 0.25% increase in the next 6-12 months is already priced in, so sterling is unlikely to break beyond $1.63/£1 or €1.19/£1 without a major boost from some other economic data. This is the best GBP/USD price in nearly a year, so if you need to buy US dollars, now is a great time. Such is the nature of foreign exchange that we could feasibly see some poor economic figures released that reverses the view on interest rates and we will back in the mid-$1.50’s.
 
In the euro zone, the euro had a fairly quiet day – supported against the US dollar by recent comments by European Central Bank policy makers over inflation in the region. Talk of interest rate hikes contrasts with the Federal Reserve’s relatively loose monetary policy, and as such the euro has held firm despite some serious global uncertainty in the shape of unrest and uncertainty in the Middle East and North Africa. Out today, there is no real data but still a lot of scope for volatility.
 
In the USA, turmoil in Libya has seen investors look to the safety of US government bonds and the Swiss franc on fears that a spike in the price of oil could impact the global recovery. Oil jumped over $100 per barrel as Libyan oil production shut down and fears over Middle Eastern oil supplies left investors concerned. Released today we have unemployment claims and new home sales data so call in now for a live exchange rate.
 
Elsewhere, a former Chinese central bank adviser called on East Asian economies to form an alliance to deal with the USA, especially on issues such as the USA’s fiscal deficit. China plays a key role in currency, and could be a huge issue over the coming months, so it is certainly worth keeping an eye on.
 
For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com
 
 

 

Posted February 23rd, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1804
US$/GBP – 1.6194
CHF/GBP – 1.5178
CAN$/GBP – 1.5986
AUS$/GBP – 1.6131
ZAR/GBP – 11.5378
JPY/GBP
– 133.91
HKD/GBP – 12.6217
NZD/GBP – 2.1665
SEK/GBP – 10.3735
US$/EURO – 1.3717

Sterling slipped against the ‘safer haven’ currencies yesterday as escalating tension in the Middle East and North Africa saw investors scale back holdings in riskier currencies. This saw sterling slip against the US dollar, Swiss franc and Japanese yen. The only real domestic news that caused any movement was speculation over the Bank of England’s minutes from their recent interest rate policy meeting. The minutes are released today at 9:30am and are important because investors hope to get a better picture of the Bank’s likely timescales for an interest rate hike – and whether any additional members joined the current two in voting for an interest rate hike. This is the big piece of UK data this week, so call in now for a live exchange rate.
 
In the euro zone, uncertainty over the situation in Libya – with a mounting public revolt in full swing – saw the euro suffer as a ‘risky’ asset, falling by 1% against the US dollar. However, positive comments by yet another European Central Bank member saw speculation over European monetary tightening start to gain momentum and the euro recovered lost ground against its counterparts. Yves Mersch was quoted as saying that the ECB should ‘change its language over inflation’. Out today, there is no real data and Bank president Jean Claude Trichet makes a speech later on.
 
In the USA, the rising tensions in Libya have pushed the price of Oil to a 2 ½ year high as concerns over the impact on global growth weighed on investors minds. Global stocks dropped by 1% and this saw large flows into the safe haven US Government bonds and as a result, US dollar strength. Out today, there is home sales data – the markets will be closely watching what is happening in Libya so call in now for a live exchange rate.

Elsewhere, the catastrophic earthquake in New Zealand had a serious effect on the currency. The NZ dollar fell almost 2 % against the US dollar hitting a 2 month low as investors sold the currency on concerns over the economic impact of the earthquake.

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

 

Posted February 22nd, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1920
US$/GBP – 1.6136
CHF/GBP – 1.5265
CAN$/GBP – 1.5916
AUS$/GBP – 1.6136
ZAR/GBP – 11.6464
JPY/GBP
– 134.25
HKD/GBP – 12.57
NZD/GBP – 2.1554
SEK/GBP – 10.5193
US$/EURO – 1.3532
 

Sterling hit a high of $1.6260/£1 yesterday, but struggled to push much higher as investors took profit from sterling’s recent run against the US dollar. Positive comments from a key Bank of England policymaker helped support sterling, as Martin Weale (who voted for an interest rate hike last month) stated that a small interest rate rise now would reduce the need for a large rise at a later date. Whilst the prospect of an interest rate hike helped support sterling, markets are waiting for Wednesday’s Bank of England minutes to see if any other of the 9 strong committee joined Andrew Sentance and Martin Weale in voting for an interest rate hike this month. It is worth noting that a lot of the current interest rate hike speculation is already ‘priced in’ (i.e. reflected in the exchange rate already) and as a result, there could be no real movement. We are at the highest level against the US dollar for nearly a year, so it is a good time to take advantage.
 
In the euro zone, the euro slipped yesterday following risk aversion relating to the escalating tensions in the Middle East and North Africa. In times of geo-political turmoil, investors generally look to safe haven currencies. As a result, the Swiss franc has seen some strength against the euro today. However, the euro did see some support from strong fundamental data, with German business confidence hitting a record high and purchasing managers’ data beating expectations. Call in now for a live exchange rate.
 
In the USA, with the markets closed for a bank holiday, there was no real data impacting the price. With the increase in violence in the Middle East and Libya in particular, oil prices have jumped to a 2 ½ yr high – which you would expect to see correlated with US dollar strength. However, what we have seen recently is US dollar weakness with the current situation as investors worry over the future impact on US foreign policy of massive upheaval in the region. Interesting times, so make sure you are on top of any upcoming payments.

Elsewhere, the Australian dollar has remained resilient despite moves by China over the weekend to rein in inflation and reduce monetary supply. China’s moves have been greeted with relief by many rather than panic, and with Australian economic fortunes closely linked to China’s economic demand, a move to address an expanding bubble is a sensible move by the Chinese.

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

Posted February 21st, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1861
US$/GBP – 1.6231
CHF/GBP – 1.5334
CAN$/GBP – 1.5996
AUS$/GBP – 1.6036
ZAR/GBP – 11.5499
JPY/GBP
– 1354.94
HKD/GBP – 12.6372
NZD/GBP – 2.1233
SEK/GBP – 10.4019
US$/EURO – 1.3682

Sterling hit a 2 week high against the US dollar on Friday as retail sales in January came in far higher than expectations. After a disappointing Christmas period, and with January retail sales normally coming in lower, the rise of 1.9% encouraged investors to back the pound. Sterling’s fortunes are very much linked to inflation and interest rate expectations. Higher retail sales figures left many feeling that the Bank of England will need to address the 4% inflation level far sooner than current rhetoric is suggesting. Out this week we have the Bank of England’s minutes that will be closely watched for any hint of timescales for an interest rate hike, so call in now for a live exchange rate.
 
In the euro zone it was a similar story with the single currency breaking above $1.37 against the US dollar to post the first weekly gain since late January. The euro’s strength came as European Central Bank policymaker Lorenzo Bini Smaghi said that the ECB would hike interest rates if price pressures continued to grow. As in the UK, this saw increased speculation over rate hikes in the region and the single currency strengthened. Out this week we have a wide array of European data so call in now for a live price as we could see some volatility.
 
In the USA, the US dollar had a poor end to the week, falling against the euro and sterling on interest rate expectations. The US dollar was not helped either by geopolitical concerns in the Middle East, with concerns over Iranian warships in the Suez Canal seeing concern. It is a bank holiday in the USA today, so there was a fair amount of US dollar selling going into the long weekend that also saw the currency weaken. This week sees consumer confidence and home sales figures so get in touch to ensure you are protected.

Elsewhere, China raised the level of required bank reserves to a record 19.5% in order for banks to lock up more cash to combat rapid inflation in the country. It is another move by Beijing to combat inflation and further moves – especially on interest rates are likely to be taken.

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

 
 

 

 

 

Posted February 18th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1930
US$/GBP – 1.6202
CHF/GBP – 1.5411
CAN$/GBP – 1.5911
AUS$/GBP – 1.6009
ZAR/GBP – 11.6580
JPY/GBP
– 135.023
HKD/GBP – 12.6108
NZD/GBP – 2.1251
SEK/GBP – 10.3992
US$/EURO – 1.3575
 

The rollercoaster ride for sterling continued yesterday, as a speech by Bank of England policymaker Andrew Sentance reignited speculation over interest rate hikes. As a result, sterling strengthened back up against the US dollar and euro. Sentance, who has been calling for an interest rate hike since June 2010, made it clear that there are numerous risks that will add to inflation and as such, interest rates need to rise faster than many think in order to filter through to the real economy and keep inflation on target. The constant back and forth over interest rate expectations is causing sterling movement on a day by day basis as sentiment shifts between swift interest rate hikes or no action from the Bank of England. Any feeling that interest rates will rise soon sees sterling strength and expectations that policy will remain unchanged will see sterling fall. Today, there are retail sales and mortgage data which is potentially market moving. Next week, the Bank of England’s minutes from last week’s meeting will be closely watched.
 
In the euro zone, reminding us that inflation is not just an issue faced by the UK, German producer price (or “factory gate”) inflation has shown a 1.2% jump on the month – far more than the modest 0.6% gain that was expected. Unlike the UK, wage inflation is on the up – driven by union demands within the auto-manufacturing sector. This brings the possibility of an interest rate hike in the euro zone into play and as such, risk appetite for investors has already improved. Call in now for a live exchange rate.
 
In the USA, the US dollar held near 2 week lows against the Swiss franc yesterday as the Swiss currency saw demand related to the situation in the Middle East. Anti-government protestors from Bahrain to Iran hoped to emulate their counterparts in Tunisia and Egypt and as such, as is normal in times of geopolitical tension, the Swiss franc sees ‘safe haven’ demand. Fed Chairman Ben Bernanke speaks today, so call in now for a live exchange rate. 

Elsewhere, the G20 summit of finance ministers and central banks kicks off in Paris today with the focus on global imbalances. As a result, discussions are likely to turn to currency – especially China’s fixed exchange rate that is a major cause of current imbalance. Call in now for a live exchange rate. 

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

 

 

 

 

Posted February 17th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1930
US$/GBP – 1.6169
CHF/GBP – 1.5570
CAN$/GBP – 1.5968
AUS$/GBP – 1.6188
ZAR/GBP – 11.8497
JPY/GBP – 135.328
HKD/GBP – 12.6005
NZD/GBP – 2.1462
SEK/GBP – 10.4309
US$/EURO – 1.3550

Sterling strengthened against both the US dollar and euro yesterday following another jump in consumer price inflation in the UK. The figures showed that inflation hit 4% – up from 3.7% in December – giving rise to more and more speculation over interest rate hikes over the coming months. Financial markets had been pricing in an interest rate rise towards the second half of the year, but many feel there could be a hike as early as May. This saw sterling hit a high of $1.6169/£1 and €1.1963/£1 against the US dollar and euro on heavy buying. The Bank of England releases the latest Quarterly Inflation Report tomorrow which could see upward amendments to inflation expectations. If this happens we are likely to see sterling strengthen even further and break over €1.20/£1 and $1.63/£1, so call in now for a live exchange rate.
 
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
 
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
 
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

 

 

Posted February 16th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1930
US$/GBP – 1.6169
CHF/GBP – 1.5570
CAN$/GBP – 1.5968
AUS$/GBP – 1.6188
ZAR/GBP – 11.8497
JPY/GBP
– 135.328
HKD/GBP – 12.6005
NZD/GBP – 2.1462
SEK/GBP – 10.4309
US$/EURO – 1.3550
 

Sterling strengthened against both the US dollar and euro yesterday following another jump in consumer price inflation in the UK. The figures showed that inflation hit 4% – up from 3.7% in December – giving rise to more and more speculation over interest rate hikes over the coming months. Financial markets had been pricing in an interest rate rise towards the second half of the year, but many feel there could be a hike as early as May. This saw sterling hit a high of $1.6169/£1 and €1.1963/£1 against the US dollar and euro on heavy buying. The Bank of England releases the latest Quarterly Inflation Report tomorrow which could see upward amendments to inflation expectations. If this happens we are likely to see sterling strengthen even further and break over €1.20/£1 and $1.63/£1, so call in now for a live exchange rate.
 
In the euro zone, the single currency slipped yesterday to the lowest level against sterling in 4 weeks as rate hike expectations boosted sterling and European data disappointed. GDP figures for the region showed that the economy grew by 0.3% against an expectation of 0.4% which didn’t help. In addition, German economic sentiment undershot expectations – highlighting the fragility of the region. Tomorrow is a relatively quiet day for European data but could see debt crisis related volatility, so call in now for a live price.
 
In the USA, the US dollar underperformed against the euro for the first time in four days yesterday as risk appetite saw the single currency benefit, but many analysts still expect the euro to suffer. Retail sales data for the US disappointed, showing growth of 0.3% against an expectation of 0.6%. This saw the US dollar fall marginally, but it held above an 8 week high against the Japanese yen as US government bond rates make US dollar holdings more attractive against Japanese holdings.
 
Elsewhere, the Australian dollar fell overnight as Reserve Bank of Australia Governor Glenn Stevens stated that interest rates were above average and that the central bank would not be raising rates for some time.

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

 

 

Posted February 15th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1886
US$/GBP – 1.6021
CHF/GBP – 1.5570
CAN$/GBP – 1.5818
AUS$/GBP – 1.5998
ZAR/GBP – 11.7210
JPY/GBP
– 133.89
HKD/GBP – 12.4931
NZD/GBP – 2.1195
SEK/GBP – 10.4079
US$/EURO – 1.3471

Sterling was firm yesterday ahead of a big day of data releases in both the UK and euro zone. We have UK consumer inflation, euro zone GDP and US manufacturing data. In the UK, inflation is expected to break the 4% barrier – up from 3.7% in December. What is uncertain though, is the extent of the recent VAT increase. If this has already been passed on by retailers, then the impact on inflation will not have been so great. Inflation is still in line with the Bank of England’s expectations, with Mervyn King expecting it to peak at around 5% before dropping back off. Tomorrow’s Quarterly Inflation Report should give a clearer picture of the Bank’s expectations and intentions for monetary policy. Either way, it is set to be a turbulent few days so call in now for a live exchange rate.
 
In the euro zone, the euro hit a 3 week low against the US dollar on fresh fears over the region’s banking system. Markets are starting to realise that there is no ‘silver bullet’ that will fix the crisis and the increasing lack of a solution is taking its toll on the single currency, despite European Finance Ministers agreeing to a new fund totally €500bn from 2013. There is a wide array of data released today, with key economic sentiment data and the latest GDP figures that are expected to show 0.4% growth in the region for last Quarter. With both euro GDP and UK inflation being released within a short while of each other we could see some significant volatility.
 
In the USA, the focus will be on January retail sales figures and the Empire manufacturing survey – both of which are released later on today. Both are expected to show large improvements, and as such could see increased support for the US dollar. Call in now for a live exchange rate.
 
Elsewhere, Chinese inflation accelerated at a slower rate than expected overnight, coming in at 4.9% against an expectation of 5.4%. This helped higher yielding ‘commodity related’ currencies, as China will not necessarily need to step in to cool its economy down. As such, imports of commodities are likely to remain at similar levels – boosting demand for currencies such as the Australian dollar.

For more information on Smart Currency Exchange, please call our freephone: 0808 163 0102 (+44 (0)207 898 0541 from outside the UK) or visit our website at: SmartCurrencyExchange.com

 

 

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