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Posted April 12th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1315
US$/GBP – 1.6283
CHF/GBP – 1.4747
CAN$/GBP – 1.5618
AUS$/GBP – 1.5606
ZAR/GBP – 10.9191
JPY/GBP
– 136.55
HKD/GBP – 12.6582
NZD/GBP – 2.0894
SEK/GBP – 10.2631
US$/EURO – 1.4388
           
Sterling hit a 5 ½ month low against the euro in early trading yesterday on expectations that interest rates in the euro zone would continue to rise at faster rate than in the UK. The pound dropped to €1.1287/ £1 early on, but staged a slight recovery on speculation that today’s inflation figures will come in higher and provide some impetus for the Bank of England to raise interest rates following the European Central Bank’s 0.25% rate rise last week. Investors have pushed back expectations of a UK rate hike to August following poor figures and downbeat comments from key policymakers. March’s inflation data is released at 9:30am, so call in now to ensure you take advantage of any movements.
 
In the euro zone, the euro stayed close to highs against sterling and the US dollar yesterday as markets priced in another interest rate hike in the region in July. However, the euro fell slightly against the US dollar, after hitting a 15 month high of $1.4489/ €1 on Friday following a near government ‘shutdown’ in the USA. This week, the members of the European Commission hope to convene with all of Portugal’s political parties to address the rescue programme prior to the upcoming elections on 5 June. Portugal is the third Eurozone country to receive a multi- billion euro bailout along side Greece and Ireland, but there has been little effect on the euro exchange rate. Released later today there are economic sentiment figures, so call in to avoid any adverse market movements.
 
In the USA, the US dollar recovered following Friday’s steep losses as Republicans and Democrats agreed a deal to avoid government shut down. They also decided to cut $38bn in spending for the remaining six months of this financial year. Several key members of the Federal Reserve are set to talk later this week and we could see some change to the current loose monetary policy, so call in and speak to a trader now.
 
Elsewhere, China’s exports and imports showed much stronger figures than expected, not showing any impact from the Japanese earthquake and tsunami. Any better than expected Chinese data generally sees the Australian dollar strengthen as China imports large amounts of commodities from Down Under. As a result, the Australian Dollar hit a new 29 year high of $1.058 against the US dollar.
 
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Posted April 11th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1299
US$/GBP – 1.6331
CHF/GBP – 1.4802
CAN$/GBP – 1.5593
AUS$/GBP – 1.5460
ZAR/GBP – 10.8510
JPY/GBP
– 138.33
HKD/GBP – 12.6912
NZD/GBP – 2.0824
SEK/GBP – 10.1202
US$/EURO – 1.4460
 
Sterling hit a 5 ½ month low against the euro in early trading this morning on expectations that interest rates in the euro zone would continue to rise at faster rate than in the UK. The European Central Bank last week raised interest rates by 0.25% and the Bank of England kept rates on hold for the 25th consecutive month. Despite the structural issues in the euro zone, the euro is a higher yielding currency than sterling and as such offers more return to investors. In terms of the week ahead, the UK focus will be on tomorrow’s CPI inflation figures. Inflation has been way above the Bank’s 2% target for some time now, so it will remain to be seen whether inflation starts to fall off as the Bank expects. Call in now for a live exchange rate.
 
In the euro zone, the impact of the Portuguese bailout has so far seen no knock-on to other European countries. In stark contrast to the bailouts of Ireland and Greece, other ‘periphery’ countries have seen improving borrowing costs. Essentially, Portugal is seen as relatively irrelevant on the European scale and so the fate of the economy will not necessarily unduly impact on others in the region. Either way, the euro is likely to remain strong against sterling. Call in now to ensure you are protecting yourself effectively.
 
In the USA, the US dollar remains weak as a result of interest rate expectations. The Federal Reserve has been very muted with regards to the possibility of scaling back the country’s Quantitative Easing programme and for now, the UK looks likely to increase rates much sooner than the USA, and sterling is seeing the benefits. Inflation data is expected to show an increase, but this is unlikely to see any change in the Fed’s position. Call in now for a live price.

Elsewhere, the same cannot be said for China, who will be releasing a wide array of data on Friday. Consumer inflation is set to rise to 5.4% in March and GDP could see a similar jump. As a result, the Chinese authorities are expected to continue to raise interest rates in the coming months following last week’s 0.25% interest rate hike.

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 April 8th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1369
US$/GBP – 1.6371
CHF/GBP – 1.4938
CAN$/GBP – 1.5638
AUS$/GBP – 1.5548
ZAR/GBP – 10.8840
JPY/GBP
– 139.28
HKD/GBP – 12.718
NZD/GBP – 2.094
SEK/GBP – 10.2650
US$/EURO – 1.4399
 

The Bank of England did as expected and kept interest rates on hold for the 25th month in a row. Now we wait for the Bank of England minutes to find out their view on the UK economy and how the members of the Monetary Policy committee voted on interest rates. Following the announcement sterling gained a bit of ground but has slipped back against the euro this morning. Call in for the latest rate.
 
The real news was happening in Europe. The European Central Bank did increase interest rates by 0.25% which was very much as expected. But the comment made as this was announced was that it was a finely balanced decision given the problems in the periphery states [e.g. Greece, Ireland and Portugal] and it was made clear that no decision had been made to make further increases in the coming months. So the market has taken the view that an increase in May is unlikely which makes sense. Elsewhere Portugal formally asked the ECB to help with a bail out. Long time coming and no surprise to anyone and had very little effect on the euro. Now to Spain where the interest they have to pay on further fund raisings will be very closely watched. At the moment the markets think the likelihood or need for any bail out is small but we wait and see.
 
The US$ lost ground as oil prices continue to rise. There is an inverse relationship between the two at the moment. Sterling pushed through the US$1.63/£1 level. Also deadlock has been reached for the coming years budget. A government shut down looks ever more likely.
 
Elsewhere the commodity backed currencies continue to hold their own following China’s increase in their interest rates at the start of the week.

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 April 7th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP – 1.1399
US$/GBP – 1.6292
CHF/GBP – 1.4929
CAN$/GBP – 1.5666
AUS$/GBP – 1.5573
ZAR/GBP – 10.8805
JPY/GBP – 138.819
HKD/GBP – 12.6671
NZD/GBP – 2.1018
SEK/GBP – 10.3368
US$/EURO – 1.4292

Interest rate day. The Bank of England are expected to keep interest rates on hold whereas the European Central Bank are expected to increase rates by 0.25% as they view inflation as their top priority. Any different from these and the markets will be very surprised. Here in the UK we had the release of disappointing industrial output figures which showed it falling by 1.2% in February when compared to January. Year on year it increased by 2.4%. The previous day we had had better than expected service data which highlights how mixed the UL recovery is. If you want to reduce your risk call in now as come lunchtime we could be seeing some very unpredictable movements in exchange rates.

Portugal has done the inevitable and asked for a bailout from the ECB. Not before time is how the markets view it. Given it was clearly expected the effect on the euro has been minimal. Now we wait and see if Spain is the next domino to fall. The market view is that this is unlikely given the steps that the Spanish have taken to sort themselves out but given the extent of the problems this could be wishful thinking in the medium to longer term. So if you are selling euros now may be a very good time to do this.

The US$ went to 14 month low against the euro. The expectation of increasing interest rate differentials supported the euro as it is unlikely the US will increase their interest rates any time soon. The US also has the possibility of government shut down as agreement can’t be reached on the next budget. Not a disaster in its own right as it has happened before but with debt reaching extreme levels it does seem time for the US to get their house in order.

Australian unemployment continues to fall hitting 4.9% which given their flooding and Japans earthquake and tsunami shows a degree of robustness for the Australian economy.

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 April 6th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP – 1.1441
US$/GBP – 1.6352
CHF/GBP – 1.5054
CAN$/GBP – 1.5710
AUS$/GBP – 1.5755
ZAR/GBP – 10.9260
JPY/GBP – 139.477
HKD/GBP – 12.7133
NZD/GBP – 2.1117
SEK/GBP – 10.2991
US$/EURO – 1.4286

Sterling benefitted from some better economic data here in the UK and negative sentiment elsewhere. Here in the UK we saw the release of a better than expected figure for the services purchasing managers index. This rose to a 13 month high in March. As services are such a key part of the UK economy the market reacted positively and sterling gained across the board. We will have to see if this increase in the index results in an actual increase in the size of the UK economy for the first quarter of 2011. One good day shouldn’t be taken as a change in sterling’s fortune and as such you should call in to get latest rates and the detailed thoughts of a trader.

Portugal’s debt was downgraded further and Spain’s unemployment increased to 4.3 million. So not a good day for the periphery states of the euro zone. The main topic of discussion is tomorrow’s interest rate announcement by the European Central Bank – 0.25% is the expected increase. No increase will see the euro lose ground; an increase greater than 0.25% will see the euro gain. So we could be in for some rapid movements in exchange rates as events remain unfold. Call in now.

The minutes of the last Federal Reserve meeting were released and weren’t quite as bullish on the ending of quantitative easing and increasing interest rates as expected. Also the US service activity data released didn’t meet expectations. These were negative for the US$. But overall the US economy is moving forward with reasonable momentum. Housing sales is still the one area that is showing significant problems.

The Chinese increased interest rates by 0.25% as they continued to try and control the growth in their economy and curb inflation. Neither of these will be easy to achieve and increased Chinese interest rates negatively affect the commodity backed currencies. The Australian dollar pulled back from a 29 year high against the US$.

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 April 5th, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1377
US$/GBP – 1.6149
CHF/GBP – 1.4907
CAN$/GBP - 1.5637
AUS$/GBP – 1.5634
ZAR/GBP – 10.8790
JPY/GBP
– 134.218
HKD/GBP – 12.5608
NZD/GBP – 2.0997
SEK/GBP – 10.2734
US$/EURO - 1.4192


A steady start to the week for sterling gaining slightly against the euro and the US$. A survey by the British Chamber of Commerce highlighted the fragility of the UK economic recovery with cash flow and price pressures being key constraints. The good news was that export activity continued to be strong. The oil price, in sterling terms, has reached a record level which is another pressure on the UK economy; businesses and consumers will suffer. Sterling is under pressure and will remain so for the time being – get in touch for the latest information and prices.

Yield on Portuguese debt is approaching 10%. Clearly unsustainable and the expectation is that a bail out must come sometime soon. However the problem is that there is an interim government in place in Portugal which makes any decision making very difficult. The effect on the euro is minimal as the market awaits the European Central Bank meeting on Thursday and the expected 0.25% rise in interest rates. This is the reason for euros strength against sterling and the US$. So don’t expect the euro to weaken any time soon – call in now to get the latest price.

As mentioned the rhetoric has changed in the US with talk of the need for an exit strategy from the programme of ultra loose monetary policy [quantitative easing and low interest rates]. But there are still concerns about the robustness of the US economic recovery. Call in now for the latest rate.

The Australian dollar has hit a 29 year high against the US$. The main driver seems to be the use of the Australian dollar in the carried trade [where a low yielding currency funds the purchase of a high yielding currency]. The opposite effect is that the yen is losing ground. Call in now for an update and the latest rates.

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 April 4th, 2011 by Charles Purdy

Daily Currency Note


EURO/GBP - 
1.1362
US$/GBP – 1.6157
CHF/GBP – 1.4909
CAN$/GBP – 1.5542
AUS$/GBP – 1.5555
ZAR/GBP – 10.8510
JPY/GBP
– 134.901
HKD/GBP – 12.5664
NZD/GBP – 2.0986
SEK/GBP – 10.1871
US$/EURO – 1.4217
 
Will this be a better week for sterling? Probably not. The Bank of England meets this week and the expectation is for interest rates to be kept on hold as the Monetary Policy Committee wait to see how the UK economy is being affected by the Governments austerity cuts. Economic data to be released this week are producer price inflation figures which are expected to show increasing input costs and industrial production for February which is forecast to show an annualised increase of 4.3%. So don’t expect sterling to show a resurgence against the euro and the commodity backed currencies this week. In fact the trend seems to be for further weakening. So get in touch now to get the latest and prices.
 
The euro seems to be the markets favourite at the moment despite the Irish having to increase their banks bailout funds yet again and Portugal on the edge of requiring a bailout. The reason for this is that the European Central Bank are expected at this weeks meeting to increase interest rates by 0.25%, The reason for this is their desire to fight inflation which is too high. Economic data released this week by Germany, the engine of euro zone growth, are industrial production and industrial orders which are both expected to be positive. Call in now for the latest prices.
 
US economic rhetoric has changed quite dramatically as their economy seems to be moving forward and unemployment falling. Talk of further quantitative easing seems to be replaced by talk of increasing interest rates. Minutes of the last Federal Reserve meeting are released this week and will make for interest reading to see if there was any discussion about an exit strategy. But lets not get our expectations too high as the problems in the US are still extensive. Prices are holding around the US$1.60/£1 level so call in now to avoid disappointment.

The commodity backed currencies continued their strong run and have seen significant gains against sterling following the rise in risk appetite as markets stabilised following the Japanese earthquake and tsunami. This week the Australian Reserve Bank meet and are expected to keep interest rates on hold as their economy continues to recover from the floods they experienced earlier this year.

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 April 1st, 2011 by Charles Purdy

Daily Currency Note

EURO/GBP - 1.1339
US$/GBP – 1.6073
CHF/GBP – 1.4788
CAN$/GBP – 1.5566
AUS$/GBP – 1.5542
ZAR/GBP – 10.8530
JPY/GBP
– 134.308
HKD/GBP – 12.5026
NZD/GBP – 2.1094
SEK/GBP – 10.1391
US$/EURO – 1.4170

Sterling fell to a 5 month low against the euro yesterday as euro-region inflation data left investors betting that the European Central Bank will raise interest rates before the Bank of England. Expectations have been that the ECB will start hiking rates in April, and yesterday’s data cemented this. Analysts now feel that the euro could test last October’s highs of 1.11/£1 against sterling as sentiment improves towards peripheral European countries and UK data disappoints. Against the US dollar sterling hit a high of $1.6152/£1, the strongest since March 24, boosted by data that showed house prices unexpectedly increased. Out today we have manufacturing sector activity data, so call in now for a live exchange rate to ensure that you don’t miss out. 

The euro performed well against other currencies on Thursday, after inflation data essentially confirmed rumours that the European Central Bank would raise interest rates in its next meeting. The euro reached a ten month high against the yen of ¥117.90/€1, the highest since May 2010. Analysts feel that the euro will stay strong in the short term, but towards the end of the year it should return to more normal levels. Out later today, there is European unemployment data, so call in now for a live exchange rate.

The US dollar rose to a three-week high of 83.21 yen before running into selling by Japanese banks and foreign players. This return to more ‘normal’ levels of strength is a sign that the panic from the recent earthquake/ tsunami is beginning to die down. Following comments earlier in the week regarding US monetary policy from senior US officials, the prospects of higher interest rates in the US mean that Japan and the USA’s interest rates are likely to take very different paths. Out later today, we have key US unemployment figures in the form of non-farm payrolls which could see significant volatility.

Elsewhere, following a stress test of Irish banks yesterday, it was revealed that Ireland needs €70bn to protect its banks from future shocks. The government promised a radical overhaul of the sector and promised a radical overhaul of the sector. Call in 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

 

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