Property market gives UK PLC a boost

Exchange rates for sending money abroad are up across the board today - mostly due to Nationwide's house price survey showing a 1.3% rise in house prices for July.

The UK's biggest building society believes that we may even see house prices finish the year higher than they started - which would have been unthinkable just a few months ago.

This, along with a rise in mortgage approvals announced earlier in the week by the Bank of England, has given the Pound a welcome boost, as good economic news (along with the increased likelihood of higher interest rates in due course) tends to make the currency more attractive to investors.

As a result the Pound is now trading at nearly 1.65 against the US Dollar and for Euro exchange rates, the mid-market rate is back above 1.17 for the first time in weeks.

Quiet week to come?

There is very little important data out this week, as much of the key inflation, interest rate, employment and housing data for the month has all been released earlier in July.

Look out for the following which may cause some volatility in exchange rates:

Today - US new homes sales (3pm)
Tomorrow - US consumer confidence (3pm)
Wednesday - Australian new home sales (1am)
Thursday - US jobless claims (1.30pm)
Thursday - UK consumer confidence survey (released overnight)
Friday - European CPI inflation (10am)
Friday - US GDP (1.30pm)

Friday's Data

Today's figures likely to affect commercial exchange rates are as follows:

8.30am German PMI inflation
9.30am UK GDP
2.55pm US consumer sentiment

Monday also sees the monthly Nationwide house price survey at 7am which is likely to have an impact on UK markets, which are fragile to any news about the recovery (or lack of) in the economy. Contact Currency Index if you are concerned about the implications for your transaction.

Retail sales & mortgages bring some cheer

Today's mortgage approval figures and retail sales numbers for June were both better than expected, which gave the Pound some strength, in a choppy day on the markets.

Tomorrow's UK GDP figure will be eagerly anticipated - if the nation's income is improving significantly, there may be a spike tomorrow afternoon offering the opportunity to send money abroad more cheaply. If the news is bad, perhaps the Pound will end the week on a low note.

Bank of England Boost

Today's Bank of England minutes, unsurprisingly, showed a unanimous vote to keep UK interest rates on hold at 0.5%.

The slight surprise, however, was that the central bank has kept its quantitative easing programme at £1.25bn, resisting the temptation to 'print more money' (the maximum allowed under current legislation is £1.5bn), and noting the worst of the recession is probably behind us.

The pleasing news has given some support to what was a rapidly falling Pound - giving opportunities for foreign currency transfers at better rates than we were seeing.

In the last few days, sterling has been falling consistently - so there may be an opportunity today to secure currency at relatively good levels in case there is any further bad news later in the week.

This week on the markets

This week sees fewer data releases than normal, as most of the key monthly data has come out already. Therefore we expect commercial exchange rates to be less volatile than we have seen so far this month.

Last week's UK inflation data was better than expected, as was the Rightmove house price data released overnight, so the Pound is looking a little stronger this morning. Contact your currency company if you would like to discuss the implications for your own transactions.

This week's main news releases are as follows:

Monday

1.30pm - Canadian foreign investment data

3pm – US economic trends

Tuesday

1.30am - Reserve bank of Australia meeting minutes

2pm - Canadian interest rate decision

4pm – Federal Reserve chairman Bernanke’s speech (USA)

Wednesday

2.30am - Australian CPI inflation

9.30am - Bank of England meeting minutes for July

3pm – US house price index

Thursday

9am – Eurozone current account balance figures

9.30am - UK retail sales data

1.30pm – US jobless claims

Pound creeps up

Despite yesterday's headline-making unemployment figures in the UK, the Pound has not fallen - perhaps because poor figures were already factored into the value of GBP.

A terrible reading from the key German ZEW business survey also helped keep the Euro weak.

For the US Dollar, the Federal Reserve's downbeat outlook on the US recession have helped to weaken the dollar, the exchange rate now is back up above $1.64 to the Pound.

This week's major data is now all out, so anybody with currency requirements should perhaps take stock of the latest movements and speak to Currency Index about securing rates, which can be done up to 2 years ahead of your anticipated requirement.

Inflation on target

This morning's key inflation data has come out exactly as analysts expected - so there has been little effect on the Pound.

Euro exchange rates are now back up in the €1.16s [mid-market level] and the rate for sending money to the USA has recovered above $1.63. This afternoon sees 6 important news releases in the USA, at 1.30pm.

RICS House Price Boost

This morning's Royal Institute of Chartered Surveyors data showed a surprise increase in house prices for June - showing the second-highest monthly increase in the number of houses increasing in price, since the survey began in 1978.

Retail sales data released overnight also showed a 3.2% increase in the year to June.

The Pound has gained ground on these two pieces of positive news - next is retail inflation at 9.30am...

Euro back below 1.15

Sterling has fallen below 1.15 against the Euro [mid-market level] for the first time in a month, as negative sentiment continues in the UK.

Anybody needing to send money to Europe should speak to their currency company for the latest news, as wishful thinking can be expensive in the currency markets.

Sterling has fallen 3% against the single currency, since its peak in mid-June.

This week's exchange rate outlook

Plenty of news due out this week which is likely to affect commercial exchange rates - whichever currencies you need to buy or sell, contact Currency Index for our views on the market.

UK Data
Monday (overnight) - retail sales and RICS house prices
Tuesday (9.30am) - CPI & RPI inflation figures
Wednesday (9.30am) - unemplyment rate for May

European Data
Monday (11.30am) - ECB President Trichet's speech
Tuesday (10am) - industrial production data
Wednesday (10am) - CPI inflation

Amercian Data
Tuesday (1.30pm) - PPI inflation and retail sales for June
Wednesday (1.30pm) - CPI inflation
Wednesday (7pm) - minutes from the last FOMC meeting
Thursday (3pm) - manufacturing survey

Other Data
Canada - Monday (1.30pm) - Bank of Canada business outlook survey
Australia - Tuesday (2.30am) - key business confidence data
Switzerland - Wednesday (8.15am) - May retail sales

Pound better on monetary easing & trade balance

Two important figures out in the UK today have given the Pound a welcome boost. This morning, the trade balance figure showed a defecit of £2.2bn, better than analysts' expectations of £2.75bn. Then, at lunch time, the Bank of England announced they are not using all the funds made available for quantitative easing, putting off the decision to inject a further £25bn into the economy until August.

Sending money abroad has got cheaper during the course of today as a result, with most exchange rate posting gains of around 1%.

Clients wishing to take advantage of a spike in the market should consider booking a forward contract, which secures a fixed exchange rate for the future.

Swiss unemployment up

Swiss unemployment has risen slightly more than expected, according to figures out this morning. The number of Swiss unemployed is now up to 3.6%.

The Swiss Franc weakened around 0.5% on the release of the news, good news if you are sending money to Switzerland.

Industrial data negative

The UK's industrial and manufacturing data both showed suprise falls this morning, in further bad news for the Pound.

Manufacturing and industrial data for May were expected to show an increas on April's figures - but the opposite has happened and damaged expectations of economic recovery, and hence the Pound has fallen.

Commercial exchange rates fell around 0.5c against both the Euro and Dollar on the release of the news.

Pound down as momentum shifts

More losses for the Pound this morning - despite the lack of any major data, last week's slight drop in exchange rates has been compounded, suggesting we have seen the top for sterling for the moment.

If you need to buy Euros at the best rates or send dollars to the USA, we would suggest considering all your options, as holding out for better rates does not seem to be paying off currently.

Tomorrow's manufacturing and house price data will be of interest to the market, and any negative news is likely to bring rates down further.

Pound struggles despite data

Yesterday's US employment data (non-farm payrolls) was bad news for the US economy - but there was little improvement in the exchange rate. This is a worry for anyone needsing to send money to the USA, as normally a negative reading in the States would improve the exchange rate. Has the Pound reached the top for the moment?

In Europe, ECB President Jean-Claude Trichet said after the Eurozone held interest rates, that the decision was because of the "appropriate" cost of borrowing at present, dashing hopes of a Eurozone interest rate cut which would be likely to improve the Euro exchange rate for Brits.

Speak to your Currency Index dealer for some more opinions, but it may be that the good run the Pound has enjoyed in the last 2 months, has come to an end for the moment.