EURO/GBP – 1.174
US$/GBP – 1.432
CHF/GBP – 1.644
CAN$/GBP – 1.493
AUS$/GBP – 1.673
So the UK parliament met for the first time yesterday following the general election. Some people were sitting next to people they probably thought they would never sit next to ever in Parliament [e.g. David Cameron and Nick Clegg]. But we are in a brand new world after 15 plus years of New Labour and as such everyone was full of smiles and high spirits. Sadly this didn’t flow through to sterling. Sterling had a strange start to the day as consumer price inflation came in at 3.7% which was way ahead of the target of 2% and ahead of market expectations. Initially sterling benefitted but then lost ground as the market realised that interest rates in the UK are not going to increase any time soon [which is normally the solution when inflation is ahead of target] due to our “difficult” economic conditions. Very difficult times for sterling so please call now so that you can properly manage your currency exposure.
Now to the euro zone and the euro. The German government decided to ban the short selling of euro zone government debt. Not sure how effective this is going to be given the ability of the markets to find a way round such bans. And the markets kept the pressure up on the euro, especially against the US$ where the euro hit 4 year lows. Against sterling the euro gave back in the afternoon the gains its had made in the morning. So we seem to be in a fairly narrow range between sterling and the euro and who knows which way the next significant move will be. That is why it is important to give us a ring sooner than later so as to make sure you are not in the wrong place at the wrong time with your currency requirements.
The US$ continues to be flavour of the month/year at the moment and is living up to market expectations increasing in strength against sterling and the euro [hitting 4 year highs against the euro]. Not really surprising given the problems in the UK and the euro zone, the US$’s safe haven status and the expectation that the US is leading the western world out of recession. So call now as it doesn’t seem like a good idea to hold off on buying your dollars.
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