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Posted September 22nd, 2010 by Charles Purdy

Daily Currency Note

EURO/GBP – 1.177
US$/GBP – 1.569

CHF/GBP – 1.561
CAN$/GBP – 1.603
AUS$/GBP – 1.639
ZAR/GBP – 11.028
JPY/GBP – 133.15
HKD/GBP – 12.172
NZD/GBP – 2.128
US$/EURO – 1.331

Sterling fell to a 2 month low against the euro yesterday after stronger than expected demand for Irish and Greek government bonds eased concerns over European sovereign debt. Ireland sold 100% of the 1.5bn worth of bonds on offer and Greece managed to sell 390m worth of bonds – 72% of what was on offer. This saw sterling hit a low of 1.1810/£1 as the single currency surged on the strong sentiment that was generated by the bond auction. Sterling wasn’t helped after data was released showing that UK public sector borrowing hit a record high for August as interest payouts on UK government bonds shot up as a result of stubbornly high inflation. The data showed that the UK public sector spent £15.3bn more last month than it took in. In terms of today, there is yet more risk that sterling will drop in the form of the minutes of the Bank of England’s recent interest rate meeting. With concerns that the Bank are considering further Quantitative Easing, investors are keen to cast an eye over the discussions and thoughts of the decision makers. Speak to a trader now to protect yourself against further movements.

In the Euro zone, there were concerns last week over the debt crisis in Europe, as rumours spread that Ireland was seeking help from the International Monetary Fund (IMF). These were quickly allayed yesterday as the bond markets gave the emerald isle a vote of confidence by snapping up the bonds that were on offer. Greece also surprised many, and despite only selling 72% of the bonds that were on offer, this was seen as a huge step towards recovering some confidence in the financial markets. Out later today there is some business sentiment data for Belgium which is unlikely to cause too much of a stir. Speak to a trader now as the euro is likely to remain volatile – especially vs. sterling and the US dollar.

In the USA, despite the US dollar coming under significant pressure on Monday ahead of yesterday’s Federal Reserve interest rate decision, the announcement turned out to be a bit of a damp squib. There had been concerns that a further round of emergency stimulus would be pumped into the economy, but the Federal Reserve issued an almost identical statement to last month stating that “additional accommodation would be given [to the economy] if required” i.e. they would pump further money to stimulate as and when it was required. Early reaction following the announcement saw risk appetite improve and sterling strengthen by a cent on the day to just over $1.56/£1. Call in now and speak to one of the team about how best to take advantage of economic events such as interest rate announcements.

Elsewhere, Canadian inflation was milder than expected in August as energy price rises slowed and the Canadian recovery lost steam. This gives the Bank of Canada much more reason to pause its current interest rate hiking scheme and is likely to see the Canadian dollar pull back. The currency – known as the Looney – has recently come very close to parity (1:1) against the US dollar. Poor inflation data is not going to push it beyond that barrier anytime soon.

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Posted July 15th, 2010 by Charles Purdy

EURO/GBP – 1.199
US$/GBP – 1.531
CHF/GBP – 1.606
CAN$/GBP – 1.581
AUS$/GBP – 1.740

Sterling hit a 2 month high against the US dollar yesterday as UK jobs data came in better than expected. The number of people claiming unemployment fell by more than expected, showing a fall of 20,800 people against an expectation of 20,0000. In addition, the rate of unemployment fell from 7.9% to 7.8% driven by a record boost in part time employment. The data was the catalyst to see sterling jump by nearly 1% to nearly $1.53/ £1 – the highest rate in 2 months. Concerns over the banking sector held sterling back, as the FTSE 100 traded down 0.4%. Against the euro, the pound gained marginally to trade back above the 1.20/ £1 level. However, movement between sterling and the euro has been fairly limited this week with most off the volatility coming against the US dollar. In terms of data, there is little out today in the UK so get in touch to ensure you take advantage of the strong US dollar price.

In the euro zone, inflation figures came in as expected with year on year CPI inflation showing 1.4% the ‘core’ CPI showing 0.9% – both of which had been widely predicted. Month on month industrial production underperformed however, posting 0.9% growth against an expectation of 1.2%. Despite holding at around 1.20/ £1 for the last few days, analysts are still expecting the euro to weaken against sterling but this is reliant on the Bank of England raising interest rates or at least ending the asset purchase programme, which is still on pause. Sovereign debt is still a concern, but seems to have taken a back seat. It is not lurking far below the surface though – call in now to ensure you buy at the right time.

In the USA, monthly retail sales figures improved, but by a lot less than was expected. Sales fell by 0.5%, but were expected to decline by 0.2%. Import prices also declined by 1.3% – all of which added to the US dollar’s decline against the pound. Out later today, producer prices are expected to decline alongside CPI inflation data which is expected to show a similar decline as inflationary pressures remain low. There is an expectation that the US labour market figures out today will continue to show a gradual improvement. Call in now for a live exchange rate.

Elsewhere, China announced lower than expected GDP data for the 2nd quarter and also lower inflation figures. The Chinese government has been actively trying to cool the economy, and the figures suggest that their efforts have been successful. As a result, risk appetite got a boost, as traders speculated that tight restrictions on bank lending would be eased. Call in now, as the commodity based currencies have yet to take stock of this new development.

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:

Posted July 9th, 2010 by Charles Purdy

EURO/GBP – 1.195
US$/GBP – 1.518
CHF/GBP – 1.599
CAN$/GBP – 1.583
AUS$/GBP – 1.733

Sterling fell yesterday against the US dollar and euro as mixed economic data triggered a sell off of sterling positions. Despite hitting a 2 month high of $1.5241/ £1 – the highest since early May – the pound struggled to make ground. This happened despite data showing a larger than expected rise in industrial production. However, house prices fell and the Bank of England kept the interest base rate and quantitative easing programme on hold as expected. It was revealed a few weeks ago that Bank of England member Andrew Sentence had voted for an increase in interest rates at the last meeting. We will need to wait for 2 weeks until the minutes of yesterday’s meeting are released to see whether any other members of the Bank of England followed suit. Out later today there is monthly PPI data and trade balance data which is expected to show a slight contraction in the UK’s trade deficit. Call in now for a live exchange rate.

In the Euro zone, Germany’s trade surplus shrank by 3bn and the European Central Bank kept rates on hold at 1%. The press conference comments by bank president Jean-Claude Trichet helped boost the euro to above $1.27/1 for the first time since May. The bank president stated that he felt that the recovery was well under well and details over the proposed ‘stress tests’ of government and bank debt helped push the currency higher. The euro pushed below 1.20/ £1 as a result. Out later today, there is Italian and French industrial production data and German PPI purchasing data. Call in for a live exchange rate.

In the USA, initial claims for unemployment benefits fell to 454,000 from 475,000 the week before. This was much better than expected and helped boost the US dollar against most of its counterparts and saw US government bond yields rise (a sign that investors are looking for riskier assets to invest in). In other news, the US administration pledged to monitor the Chinese yuan exchange rate, to ensure that China is living up to its commitments to help rebalance the global economy. Call in now to ensure you get the best exchange rate.

Elsewhere, the Australian dollar is on track for the biggest weekly gain in 9 months as signs that the global economic recovery is intact boosted demand for higher yielding currencies. The NZ dollar also gained. Get in touch now especially if you need to buy AUS dollars, as the price is getting significantly worse. Have a fantastic weekend!

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:

Posted July 8th, 2010 by Charles Purdy

EURO/GBP – 1.199
US$/GBP – 1.517
CHF/GBP – 1.600
CAN$/GBP – 1.587
AUS$/GBP – 1.736

Sterling had a good day yesterday, recovering lost ground against the US dollar and euro as a recovery in UK shares on the FTSE stock market helped ease concerns over the fragility of the economy. Data on UK jobs growth was relatively poor and this put a cap on the strengthening pound. Against the euro, the pound was broadly stronger but sterling seems to have lost the post-budget momentum as gains related to sentiment have given way to concerns that the tax hikes and spending cuts will dampen growth and harm the UK recovery. Many analysts are concerned that the government will struggle to effectively implement the spending cuts, with industrial action being a potential stumbling block. Despite these concerns, the pound has strengthened this morning to a 2 month high against the US dollar as sentiment towards the Euro zone improves and investors look to ‘riskier’ assets in the UK and Euro zone. The big event today is the Bank of England interest rate decision. The rate is expected to stay the same and the emergency funding is likely to remain on hold. However, if this does change, there will be considerable volatility. Call in now for a live exchange rate.

In the Euro zone, final GDP for the quarter came in as expected at 0.2%. There was however slightly poor data in the form of the French trade balance whereby the deficit increased by 1.5bn. In addition, against an expected increase of 0.5%, German factory orders fell by 0.5%. Out today there is data on the German trade balance and also a press conference by the European Central Bank following the interest rate decision – the press conference is normally fairly scripted, but the ‘free questions’ can sometimes prompt volatility if there are any controversial statements. Get in touch now for a live exchange rate.

In the USA, there was a lack of data released in the region yesterday, and the US dollar traded on sentiment. Similarly today, there is very little relevant data as the US dollar takes a back seat ahead of a busy set of data from the UK and Euro zone. Already this morning, the US dollar has given away ground to other currencies on risk sentiment movements. Get in touch now to avoid missing out on the best rates.

Elsewhere, Australian employment figures surprised many with the economy adding 45,900 jobs in June – easily beating the 15,000 estimate. The rate of unemployment for May was also revised downwards. This saw the Australian dollar strengthen against all other major counterparts as increased employment boosted expectations for higher inflation. Call in now to avoid missing 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:

Posted July 5th, 2010 by Charles Purdy

EURO/GBP – 1.210
US$/GBP – 1.517
CHF/GBP – 1.613
CAN$/GBP – 1.611
AUS$/GBP – 1.801

Sterling hit a month high of $1.5230/ £1 – the strongest since early May – after US Non-Farm payroll data came in far worse than expected and investors dumped the US dollar in favour of sterling. Following the drastic first budget of the new UK coalition government, the pound has taken advantage after a string of lacklustre US data with many analysts feeling better about the UK’s chances of cutting the deficit. Overall the pound finished up 1% against the US dollar, and despite barely holding above 1.20/£1 for most of Friday after the euro performed well, the pound staged a late rally and closed just shy of 1.21/£1. Out later today there is house price data for the UK and also services PMI data that is expected to show a slight decline. Get in touch now for a live price to ensure that you do not lose out on the best exchange rates.

In the Euro zone, the euro strengthened this week against both the US dollar and sterling after concerns over the liquidity and funding of many European banks turned out to be less of a problem than expected. Higher than expected demand for Spanish bonds and lower than expected demand for European Central Bank emergency funding helped stem concerns over the state of the region as a whole. In terms of data, there is final services PMI data and also monthly retail sales data. Call in now for a live exchange rate.

In the USA, the US dollar had a traumatic day after US Non-Farm payroll (seasonally adjusted unemployment data) showed a far worse fall in jobs in the region than was initially expected. Data showed a drop of 125,000 versus last month’s gain of 433,000. This followed a string of poor data from the US over the last few weeks that has prompted fears that the US recovery is faltering. There had been expectations at the start of the year that there would be an interest rate rise by the 3rd Quarter of this year. However, as it stands this looks less and less likely. This is the reason for the poor performance by the US dollar of late. The US markets are closed today for the 4th July holiday, so no data is being released. Call in today for a live exchange rate to ensure you are accurately forecasting for your upcoming payments.

Elsewhere, the Australian dollar rose after Asian stock markets gained and reports showed that the Australian labour market was improving. Data out this week is expected to show that employment increased for a fourth month. Get in touch now for a live exchange rate and to avoid losing out on poor exchange rates.

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:

Posted June 30th, 2010 by Charles Purdy

EURO/GBP – 1.230
US$/GBP – 1.503
CHF/GBP – 1.626
CAN$/GBP – 1.578
AUS$/GBP – 1.761

Sterling hit a 19 month high against the euro yesterday as investors deserted the euro ahead of bank repayments to the European Central Bank. The pound hit 1.2380 as a key deadline looms on Thursday for the repayment of loans made to banks in the Euro zone. Sterling was also supported after the launch of a 30 year gilt (UK government bond) was received well by financial markets. Lending data released yesterday showed that net lending to individuals had increased to £1.5bn but final mortgage approvals fell slightly. Today, we have seen house price data show prices rise by a mediocre 0.1% month on month against an expectation of 0.3%. Despite the wave of positivity that has followed the budget, there are still several issues that need addressing in the UK, and these figures are showing that there is potential for another housing slump. Call in now to avoid missing out on the best rates.

In the Euro zone, sentiment towards the region has taken another punishment as concerns over liquidity in the Euro zone have left investors concerned. On Thursday, a 442bn lending facility from the European Central Bank expires. This has prompted overnight lending rates to increase and widening gaps between government bond spreads. We will have to see what happens over the next few days. Out today, we have seen German unemployment data for June which has shown a rise of 21,000 – worse than expected. Later on today, there is inflation data for the Euro zone. Get in touch now to ensure you do not miss out.

In the USA, with a fairly quiet week so far on the economic calendar, the big news was that consumer confidence fell on the month. A lot of data in the US has suggested that the US recovery is stalling somewhat so a decline in confidence did not come as too much of a surprise. Out later today, there is ADP Non-Farm employment change – the precursor to the main Non-Farm Payroll data and a figure that gives a good indicator of Friday’s figure. Call in now for a live exchange rate and to ensure that you don’t miss out on the best price.

Elsewhere, Australian private sector credit and loans to buy houses increased yet again and beat economists’ expectations. However, new home sales fell to a 2 year low – showing a conflicting assessment of the property market. It might be due to the heavy programme of interest rate hikes over the last few months. Call in now for a price – especially on the more volatile currencies such as Aus dollar and NZ dollar.

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:

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