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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 April 30th, 2010 by Charles Purdy

EURO/GBP – 1.154
US$/GBP – 1.537
CHF/GBP – 1.655
CAN$/GBP – 1.542
AUS$/GBP – 1.650

Sterling gained against the dollar and crept back against the euro as European officials stated that additional aid for Greece would be agreed soon. Sterling is trading at $1.5360/ £1 and 11.1560/£1. The prospect of an agreement on Greek aid helped stabilise market fears over debt default in the euro region. Polls soon after last night’s final prime ministerial debate saw David Cameron emerge as the ‘winner’ of the debate, but concerns remain over a hung parliament as none of the parties have a clear majority. A poll of economists showed a 60% probability of a hung parliament – much higher than a month ago. Also yesterday, a Nationwide house price survey showed prices rise by 1.0%, which was slightly higher than expected. Yet again there is no data out today in the UK, but the pound is still likely to trade on sentiment in the final few days of campaigning. Get in touch now for a live price.

In the Euro zone, talks between the European Union and the IMF continued yesterday with Greece being primed for another multi-billion dollar ‘austerity package’. Worries over Greece have been spilling over to concerns over Spain, Portugal and Ireland and this has caused investors to sell the euro against other currencies. The euro hit 1.3225/$1 as risk aversion continued to drive a flight of funds into US dollars. On a relatively positive note, German unemployment fell by 68,000 on the previous month which was much better than expected. However, this had little or no effect on the negative sentiment caused by the debt crisis. Out today, there is European unemployment data. Call in today for a price – especially if you are holding euros, as the euro looks likely to weaken.

In the USA, unemployment claims for the month grew by 6,000 more than expected however the focus is on today’s market data. Out later we have the US first quarter GDP figures which are expected to show a rise of 4% as confidence has grown and economic data has improved. There is a lot of volatility in the market, so 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 April 29th, 2010 by Charles Purdy

EURO/GBP – 1.151
US$/GBP – 1.522
CHF/GBP – 1.651
CAN$/GBP – 1.534
AUS$/GBP – 1.644

Sterling fell yesterday against the US dollar following the fallout from the Greek debt crisis that caused investors to flee to safer assets. The UK came under renewed examination in the run up to the election as analysts predicted that the crisis over government debt could spread further.

With most opinion polls pointing to a hung parliament, the pound suffered as no party would currently have the majority to push through legislation to clear the UK’s record deficit. Despite speeches from the Liberal Democrats over a ‘balanced government,’ or a coalition, markets like certainty and strong decisive government.

The pound hit a 3 week low of $1.5129/ £1 before recovering slightly towards the end of the day. Sterling stayed in a narrow range against the euro throughout yesterday but has dropped this morning after Spain suffered a credit downgrading. Further issues were caused by Gordon Brown’s shocking gaffe on the campaign trail.

There was no data out in the UK yesterday – out today, we have a house price report from the Nationwide which is expected to show a mild decline in the rate of growth in house prices. There is also the final prime ministerial debate tonight which could see more instability. Call in now on 0207 898 0549 for a live exchange rate as they are moving around quite a bit.

In the euro zone, following Tuesday’s downgrading of Greek debt to ‘junk bond’ status, the IMF (International Money Fund) is believed to have stepped in swiftly to begin negotiations over further bailout funding. The IMF chief Dominique Strauss-Kahn is rumoured to be looking at increasing the rescue package to 100-120bn over three years as opposed to the initial 45bn that was agreed several weeks ago.

This helped strengthen the euro.

Out today we have German unemployment data and money supply data. In addition, the investment bank UBS have predicted that the euro will fall to 1.20/ $1. Call in now on 0207 898 0549 to ensure you don’t miss out.

In the USA, the US dollar is still the gauge of global opinion towards risk in the economy. As a result, following yesterday’s issues in the euro zone many investors fled from UK investments to the US and as a result, the Dow Jones stock market in the USA closed higher yesterday. There is US unemployment data out today. Call in today on 0207 898 0549 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 April 27th, 2010 by Charles Purdy

EURO/GBP – 1.152
US$/GBP – 1.538
CHF/GBP – 1.654
CAN$/GBP – 1.541
AUS$/GBP – 1.664

Sterling matched the highest level of the year against the euro yesterday as Greek debt uncertainty caused the euro to suffer. The pound hit 1.1620/ £1 in early trading yesterday (matching a 5 month high last seen in January) as the latest opinion polls showed the Conservatives winning a majority at the election in 10 days time and avoiding the dreaded hung parliament that has caused so much downward movement of sterling since the beginning of 2010. There was no data out yesterday aside from some house price data, so sterling benefited from better sentiment towards the UK. Out today, there is data on consumer spending which has the potential to cause volatility. Call in now to avoid the market moving against you as this is relative to the first 5 months of the year a great time to buy euros.

In the Euro zone, global investors grew impatient over the Greek bailout following the activation of the facility by the country last week. Some Canadian ministers added to concerns over the weekend by suggesting that 43bn would not be enough to sort the country’s finances out. As it stands, the pound is poised to benefit from the deteriorating situation in the region – especially if there is no hung parliament. Are we heading towards 1.20/ £1 sooner than expected? If so and you need to move euros into sterling, better get in touch before it is too late. Out today, there is some German economic data that is unlikely to impact on the current sentiment. Call now for a live price.

In the USA, there was no data out yesterday and the pound reached a high of $1.5496/ £1 as sentiment towards the UK improved following the poll results and poor market reaction to European news. The sterling/ US dollar price is currently a clear indicator of market feeling towards the UK. Upwards of $1.54/ £1 and feeling is good, down towards $1.50/ £1 and sentiment is poor. The volatility has been high over the last few weeks. Any news that could be perceived as negative can cause the price to drop rapidly. Call in now to take advantage of prices whilst they are good.

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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