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Posted June 10th, 2010 by Charles Purdy


EURO/GBP – 1.210
US$/GBP – 1.459
CHF/GBP – 1.672
CAN$/GBP – 1.515
AUS$/GBP – 1.737

Sterling recovered yesterday when investors bought back into the pound after analysts stated that the pound had been oversold on Tuesday following comments by credit rating agency Fitch. In the end, the comments made by Fitch added nothing new to what the markets knew already. Concerns over the deficit and a potential credit rating agency have been around since the start of the year, and many investors have been calmed by the aggressive cost cutting measures that have already been announced by the new government. As a result, the pound hit $1.4578/ £1 and was helped along by a strong performance by stock markets as risk aversion eased slightly. The pound is likely to remain under pressure in the run up to the emergency budget on June 22nd as investors remain cautious. There is a lot of data out today, with the main UK news being the Bank of England’s interest rate decision. Whilst it is expected to remain on hold for the considerable future, there could be volatility if any comments are made regarding the £200bn asset purchasing facility. Call in now to ensure you take advantage of any movement.

In the Euro zone, there was little data out yesterday and the single currency took its lead from general sentiment and reaction to other currencies. With sterling having a strong day, the euro fell towards the 18 month low it hit last week, with the pound firmly back over the 1.21/£1 mark. Out later today, we have the European Central Bank press conference in which the bank will outline this month’s interest rate and monetary policy decision. The press conference can cause considerable volatility if any of the comments made are unexpected. In addition, there is some French unemployment data out this morning. Get in touch with a trader to make sure you are buying at the right time.

In the USA, the US dollar fell yesterday as risk appetite increased. There is a fair amount of data out today, with the trade balance expected to show a widening to $42bn. In addition, Treasury Secretary Geithner addresses the Senate on China later this afternoon. There could be some interesting discussion regarding the exchange rate ‘peg’ (i.e. fixed exchange rate) that is in place between the US dollar and Chinese yuan. The US dollar seems to be swinging back and forth at the moment on sentiment – call in now to ensure you catch it at the right time.

Elsewhere, New Zealand raised their interest rates by 0.25% to 2.75% for the first time since the credit crunch hit. A report by Credit Suisse shows that many expect another 0.25% rise at the next meeting in July. Rising interest rates mean a stronger currency – ensure you don’t miss out. The Australian dollar strengthened as data showed an unexpected jump in the number of jobs added to the economy last month. Call in to ensure that any payments you are making do not increase.

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 18th, 2010 by Charles Purdy

EURO/GBP – 1.167
US$/GBP – 1.450
CHF/GBP – 1.637
CAN$/GBP – 1.493
AUS$/GBP – 1.652

The pound suffered yesterday as concerns over the UK’s escalating deficit saw sterling hit a 13 month low of $1.4250/ £1 against the US dollar and slip against the euro. With many investors shying away from highly indebted countries, many analysts expect the downward trend against the US dollar to continue. With no real data released today, the big news was the announcement by the Chancellor George Osborne that the government will create a new independent watchdog to monitor the budget and economic forecasting. In a move similar to Labour’s creation of an independent interest rate setting body early into their first term in 1997, the new Chancellor is looking to ensure that he and his new government are held to account on cutting the deficit. He also announced that the first budget would be announced on June 22nd. With the government committed to delivering £6bn worth of spending cuts in the next year, the markets will be waiting to see exactly where the cuts will come from. Whilst the City is keen on the tough stance on spending, there are concerns that an overly aggressive round of cuts will stifle the UK’s fragile growth. With poor house price figures out yesterday morning, the Chancellor has a lot to prove. Inflation data out later today could cause some movement and many expect the pound to suffer in the run up to the budget. Call in now for a live exchange rate.

In the Euro zone, the single currency had a torrid day slipping to a 4 year low against the US dollar as the markets remained sceptical that the IMF bailout will be enough to stop the wave of risk and poor sentiment towards the region. With Greece expecting the first 14.5bn instalment today, a European Central Bank board member was keen to stress that nobody was questioning the euro in an interview on Austrian radio. With so many European officials seemingly desperate to keep faith in the euro, this may cause a stumbling block in future if the single currency does come into question. Out today we have German economic sentiment and European inflation data. This could see further volatility if it underperforms. Call in now for a live exchange rate.

In the US, despite a strong week for industrial data last week, the ‘Empire’ manufacturing index came in a lot worse than expected fuelling expectations that the US recovery may not be as strong as many thought. The US dollar is experiencing a lot of strength related to negative sentiment – both towards the euro zone and the UK as growth prospects fall. Out later today we have building permit data giving an idea as to the state of the housing market and also purchasing data. 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 17th, 2010 by Charles Purdy

EURO/GBP – 1.173
US$/GBP – 1.441
CHF/GBP – 1.643
CAN$/GBP – 1.495
AUS$/GBP – 1.646

Sterling has hit a 13 month low against the US dollar in early trading this morning and also fell against the euro as house price data for the UK raised concerns over the health of the domestic economy. This is a particular worry as the new government is committed to cutting the deficit, therefore investors are concerned that the UK will experience poor growth as a result. A house price survey showed that UK prices in May rose less than they did in April pointing to a slow down in the housing market recovery. The reason for the fall was an increase in supply causing sellers to reduce their price expectations. The pound hit $1.4253/ £1 – the lowest since March 2009 – and also fell against the euro to hit a low of 1.1640/ £1. There is little other data out today and as a result, the pound is likely to continue to trade on sentiment. Call in now for an updated price as we could break through the $1.40/ £1 barrier soon.

In the Euro zone, the euro has hit a 4 year low against the US dollar of $1.2235/1 as sentiment towards the region continues to fall. Concerns that the debt crisis in Europe will undermine the global economic recovery saw Asian stocks fall by 3% overnight – the most since November 2009. This in turn drove risk aversion and saw demand for US dollar surge as a safe haven asset. There is little other data out today in Europe, so expect the sentiment based trading to continue. We could quite conceivable hit $1.15/1 in the next few weeks. Call in now to ensure you don’t lose out.

In the USA, with strong demand for the US dollar today following a poor session on Asian stock markets, expect the trend to continue today. US stock futures suggest that the US stock markets will be down by several points later today. This risk aversion is driving demand for the US currency. Following strong industrial data last week, the Empire manufacturing survey is expected to show similar strength. Later in the week we have the minutes from the Fed’s recent interest rate decision, which could point to when the US Federal Reserve is likely to raise interest rates next. Get in touch now, as we have seen the pound fall by 20 cents over the last year. Stop this from continuing to impact your payments by speaking to a trader today.

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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