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Posted February 27th, 2013 by Charles Purdy

The Italian elections continue to worry markets | Smart Daily Currency Note

GBP/EUR – 1.1532
GBP/USD – 1.5114
EUR/GBP – 0.8665
EUR/USD – 1.3082
GBP/AED – 5.5514
GBP/AUD – 1.4786
GBP/CAD – 1.5492
GBP/CHF – 1.4077
GBP/CNY – 9.47
GBP/HKD – 11.7152
GBP/HUF – 341.49
GBP/INR – 81.03
GBP/JPY – 138.50
GBP/NZD – 1.8304
GBP/RUB – 46.16
GBP/SEK – 9.7372
GBP/ZAR – 13.3356

Sterling

Sterling had a mixed day yesterday – starting off on the front foot reaching highs of 1.1650 against the euro and 1.5220 against the US dollar before losing ground later in the day. Sterling struggled after one of the Monetary Policy Committee (MPC) members from the Bank of England (BoE) suggested he was open to more monetary easing and furthermore, that the prospect of negative interest rates had been raised at central bank meetings. Furthermore, realised sales data from the Confederation of British Industry (CBI) came out lower than expected. Out today we have the second estimate of the UK’s fourth quarter GDP which is expected to show a contraction of 0.3%, the same as the first estimate. Moreover, more MPC members will be speaking today, and following yesterday’s volatility, the market will pay close attention to what they have to say. Call now for the latest updates on sterling.

Euro

It has been a turbulent few days for the euro, news of the inconclusive Italian election yesterday drove the euro to a seven week low against the dollar – whilst weakening by three cents against sterling. The damage was not as widespread as first feared however, as traders became confident that the European Central Bank (ECB) would intervene to limit the fallout, and the euro strengthened in the afternoon. Today is likely to be just as volatile with two important events. Firstly, we expect an Italian 10 Year Bond auction this morning – a key way for governments to borrow money and high yields mean high borrowing costs for the Italian Government. Secondly, in the afternoon the ECB President is speaking in Germany, we traditionally see a great deal of volatility during his speeches as markets look for hints as to future monetary policy. Get in touch now for the latest news and rates.

US Dollar

The US dollar generally performed well yesterday, strengthening against the majority of its currency partners with Consumer Confidence figures and New Home Sales data (rising in January to the highest since 2008) both coming out much better than expected. Along with this, the Federal Reserve Chairman backed the central bank’s current stimulus program, saying that they will support the asset purchases with “little risk of inflation or asset-price bubbles” causing the dollar to strengthen further. In the testimony he stated that “We do not see the potential costs of the increased risk-taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery.” Although he also warned that the automatic federal budget cuts in line to begin 1st of March will add a “significant” burden to the economy if lawmakers are unable to avert from the reductions. Today we will see Core Durable Goods orders along with the second part of the Chairman of the Federal Bank’s “congressional testimony” on monetary policy.

Worldwide

Elsewhere, the Canadian dollar fell to a eight month low versus the US dollar following better than expected data out of the US and the comments from the Chairman of the Federal Bank. The commodity backed currencies struggled in general yesterday whilst the Japanese yen prospered due to risk aversion driving the markets and traders seeking safer havens for their money. The Russian rouble was one of the worst performers yesterday after GDP data released showed that the economy had contracted by 0.3%. Call in now for a market update and a live quote.

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Posted August 10th, 2010 by Charles Purdy

EURO/GBP – 1.199
US$/GBP – 1.580
CHF/GBP – 1.664
CAN$/GBP – 1.629
AUS$/GBP – 1.731
NZD/GBP – 2.185
EURO/US$ – 1.316

Sterling hit a daily high of $1.5998/£1 but slipped away as the pound yet again struggled to break through the $1.60/£1 barrier. Sterling strengthened as the fallout from Friday’s poor US jobs data continued to hammer the US dollar. With many financial options ready to trigger at the $1.60 level, as well as it being a key ‘psychological’ level there is a need for a large ‘boost’ for the pound to push through – and hold firm – away from the $1.50s. This week, we might have just that with the FOMC (the US equivalent of the Monetary Policy Committee) meeting getting under way yesterday evening. There is speculation that there may be further emergency funding injected into the US economy to help jumpstart the floundering economy. The decision is announced today. Aside from that, it was a quiet day on the economic calendar. Out later today, there is UK trade balance data and consumer confidence figures. Ensure you don’t miss out and call in now for a price.

In the Eurozone, it was yet another quiet day. The euro has kept a low profile in the last few weeks, and as one Reuters reporter rightly asked today – whatever happened to the eurozone crisis? The euro is up nearly 10% against the US dollar, lending markets have improved and demand for sovereign debt in the region has increased. One argument put forward is that the risks were wholly over exaggerated. Talk of financial Armageddon and total collapse of the single currency was the norm a few months back, but now there is nothing. There are still significant risks, and several long years worth of tough spending cuts, but the panic has (for the moment) died down. This is likely to keep the pound from hitting 1.25/£1 in the short term, so get in touch now to maximise the size of your payments.

In the USA, the fallout from last week’s unemployment data continues to cause issues for the US dollar. Speculation over further quantitative easing has been high today and with the FOMC meting starting late last night. No recovery occurs in a straight line, and a run of poor data does not necessarily instantly mean that the US is entering a ‘double-dip’ recession. Lloyds TSB are predicting that the UK will enter a similar phase in 6-12 months and that we will see prices back towards the $1.40s. Call in now to take advantage of current pricing.

Elsewhere, Australian business confidence fell to the lowest level in 14 months in July raising the likelihood that the central bank will hold off on the series of interest rate hikes that began last October. The rate rises have been filtering through into the ‘real’ economy of late, with a raft of consumer data showing that lending to consumers has dropped off. 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

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