Bank of England voice concerns over recovery

Mervyn King, the Governor of the Bank of England, has suggested this morning that UK interest rates will stay low for the foreseeable future, given concerns about the strength of the UK recovery.

Low interest rates usually translate to a weak currency, so it is perhaps unlikely that we will see any significant gains for the Pound in the coming months.

Current exchange rates for sending money overseas are still around the best levels we have seen in 2010.

Best US Dollar rates since February

A weaker US Dollar has resulted in the best Dollar exchange rates against the Pound since February.

With the Pound still exposed to any further bad news in the UK economy, if you need to send money to the States in the coming weeks or months it might be a good time to consider fixing your exchange rate now.

Please contact Currency Index on 0800 043 2623 (+44 1923 777562 from abroad) if you would like to chat through your options.

Currency markets this week

As we enter the last week of the month, most major data releases have already been published, so there is no important news due out of the UK likely to have a huge effect on the Pound. Elsewhere around the world, the week's data is as follows; contact Currency Index for the latest news and rates.

Monday 26th
0230 - Australian PPI inflation
1500 - USA new home sales

Tuesday 27th
0700 - German retail sales
1500 - US consumer confidence

Wednesday 28th
0230 - Australian CPI inflation
0400 - New Zealand business confidence
2200 - New Zealand interest rate decision
2345 - New Zealand trade balance

Thursday 29th
0855 - German unemployment
0930 - UK mortgage approvals

Friday 30th
1000 - Eurozone unemployment rate
1330 - Candian & US GDP

GDP figures send Pound higher

This morning's GDP figures, estimating growth in the UK economy from March to June, have been released and are much better than expected. The figures showed a growth of 1.1%, compared to expectations of 0.6%.

Sterling has pushed higher on the news, so anyone considering fixing an exchange rate may like to request a quote from Currency Index today.

Retail Sales fall

This morning's UK retail sales figures showed a decline of 1.3% in the previous 12 months, compared to expectations of an increase 2.4%. This is worrying news for the UK economy and the Pound's prospects.

Don't forget you can secure an exchange rate up to 2 years ahead, using a Forward Contract from Currency Index.

Euro rate outlook worsens

This morning's Bank of England minutes have done the Pound few favours, as only one of the MPC's members voted for an interest rate rise this month. Higher interest rates are widely seen as a pre-requisite for further sterling strength.

"The euro is generally weaker so euro/sterling is down but overall I think the outlook for the pound is negative after the MPC questioned the UK's growth outlook," said Ian Stannard, senior currency analyst at BNP Paribas.

The euro slipped broadly after a Portuguese treasury-bill auction showed yields more than doubling from the previous sale

This week's economic data

Major economic news due out in the next 3 days, all likely to affect exchange rates, is as follows:

Today
0930 - Bank of England minutes
1900 - Federal Reserve chairman's speech

Thursday 22nd
0930 - UK retail sales
1330 - Canadian retail sales
1500 - Eurozone consumer confidence & US home sales

Friday 23rd
0930 - UK GDP
1200 - Canadian CPI inflation

This week in currency news

Most of this week's data releases come from the Eurozone, so those of you who are looking at sending payments in Euros should keep a close eye on exchange rates. The only major UK data is Friday's trade balance and PPI figures, while in the States we have a bank holiday today and very little of interest later in the week.

Monday 5th
0815 Swiss retail sales
0930 Eurozone investor confidence
1000 Eurozone retail sales

Tuesday 6th
0815 Swiss CPI inflation

Wednesday 7th
1000 Eurozone GDP

Thursday 8th
0230 Australian unemployment rate
0645 Swiss unemployment rate
0700 German trade balance

Friday 9th
0700 German CPI inflation
0930 UK goods trade balance & PPI inflation
1200 Canadian unemployment