Pound back up... a little

It seems that no news is good news for sterling at the moment, and with no major data releases in the UK this week the Pound has crept back up slowly during the last 3 days. Next week's key Bank of England announcement on Thursday could shake things up, so anybody looking to send money overseas may have a window of a few days to look at securing your rate.

Don't forget, Currency Index can book exchange rates up to 2 years ahead, without you needing all your sterling available. Please call for more details.

This week's data

Please see our weekly article for an overview on the market and data releases this week which are likely to affect exchange rates.

Contact Currency Index on 0800 043 2623 if you would like to discuss the latest news relating to your specific requirements.

GDP sends sterling plummeting

This morning's GDP data has shown a contraction of 0.4% in the economy for Q3, dashing hopes that there would be some growth to technically end the recession.

Disappointing data - and the markets have reacted badly, with sterling dropping around 1.5c against both the Euro and US Dollar.

Contact Currency Index for the latest commercial rates.

Retail Sales at 9.30

Following some good days for sterling, this morning's retail sales figures at 9.30am are an important measure of economic activity. If you need to send money overseas, keep an eye on rates around 9.30 and contact Currency Index if you would like us to alert you to any movements.

Bank Minutes Boost Pound

A little more cheer for the Pound today - which has now gained 3% against the Euro and 6% against the US Dollar in the last week. The Bank of England revealed this morning that they voted unanimously for a pause in quantitative easing this month - easing fears that more money would need to be pumped into the economy in November.



The mid-market rates for Euros and Dollars are now above €1.10 and $1.65 respectively, although the outlook is still poor - the UK's debt and fiscal position are likely to stifle any recovery for GBP which remains vulnerable to bad news.

Pound to remain weak until 2014?

Some worrying reading on the Telegraph website over the weekend - Ernst and Young predicting rates around parity for sterling against the Euro for years to come:

http://www.telegraph.co.uk/finance/economics/6360466/UKs-budget-deficit-will-leave-pound-weak-until-at-least-2014.html

Sterling Update

Please see our article for this week's foreign exchange outlook and major data releases.


Mervyn King, the Governer of the Bank of England, is giving a speech tonight at 8.30 which will be watched for clues about quantitative easing. This morning, public finance data is released at 9.30am - if public debt has increased significantly we would expect negative movement for the Pound.

Bank of England sends mixed signals

Some good news for the Pound at last this week, as Bank of England MPC member Paul Fisher told the FT that quantitative easing is now working, "having the scale and impact that we would have hoped for".



The Pound has been struggling on expectations that the Bank would increase QE by pumping more money in to the economy at its next meeting in November. We would expect more volatility leading up to the announcement, as speculation increased as to what the Bank's next move will be.

Unemployment rises

UK unemployment has risen according to official figures out today - but not as much as expected. Sterling has gained a little strength accordingly.

The outlook is still worsening overall for the Pound. See our article on HomesGoFast for an updated analysis on the current situation.

Pound hit by UK inflation

Further bad news for sterling this morning, as the UK's Retail Price Index, a key measure of inflation, fell 1.4% in the year to September. A smaller fall was expected.

Lower inflation means that interest rates are even less likely to rise, and tends to be negative for sterling.

Luckily for anyone sending money in Euros, the Eurozone ZEW economic sentiment survey also came in negative, meaning the EUR exchange rate did not fall as much as it might have done otherwise.

Britain comes bottom of 'quality of life' survey

According to a new survey, the UK has the lowest quality of life compared to 9 other large European countries. Although average household income is higher than anywhere else, the high cost of living, bad weather and long hours mean that France, Spain and Denmark have overall much better quality of life.

This will come as no surprise to those of you buying property overseas, so although exchange rates at the moment mean that property in Europe is relatively more expensive than when the Pound is strong, there is no shortage of Brits wanting to make the move abroad.

If you are making the move, speak to Currency Index about obtaining commercial exchange rates for sending money overeas.

This week's currency news

A lot of data is out this week, so expect exchange rates to be volatile. In the current climate the Pound is struggling so any further bad news is likely to make foreign currency transfers more expensive.

For a list of this week's data releases please see our article here.

CEBR Predicts £1 = €1, $1.40

A damning report over the weekend from the Centre for Economics and Business Research, has predicted the Pound will fall BELOW parity with the Euro (£1 = €1) and below $1.40 against the US Dollar, with UK interest rates staying at 0.5% until 2011.

See the BBC's report for more information.

UK Trade Balance worsens

The UK trade balance for August has risen to -£3bn, above expectations of -£2.5bn, in more bad news for the UK economy and sterling.

The Pound is dropping this morning as a result.

Currency News this week

No joy for those of you waiting to transfer money overseas yet this week - as the Pound was hampered by this morning's negative UK manufacturing data.

For the rest of the week we have some key data which may cause volatility - not least the monthly Bank of England and European Central Bank policy announcements.

Whatever your requirements, do contact a currency company to discuss your currency transfer - optimism in these markets can be expensive.

Wednesday
Overnight - UK consumer confidence
11am - German factory orders

Thursday
1.30am - Australian unemployment rate
11am - German industrial production (August)
12pm - Bank of England interest rate decision
12.45pm - European Central Bank interest rate decision
1.15pm - Canadian housing starts
1.30pm - US jobless claims data

Friday
Midnight - Federal Reserve Chairman Bernanke's speech
7am - German CPI inflation
9am - Halifax UK house price index
9.30am - UK PPI inflation
1.30pm - US trade balance (August)

Australian Interest Rates Up

The Reserve Bank of Australia has become the first major central bank to raise interest rates since the economic crisis - from 3% to 3.25%.

This is significant for anybody who needs to send money to Australia, as higher interest rates increase demand for the currency, and therefore the price tends to increase - in other words, exchange rates for sending money to Australia fall.

This morning, the mid-market rate has fallen below $1.80, and with unemployment figures to come tomorrow overnight, there could be more movement to come if the Australian economy is picking up more quickly than expected.

Sterling Report

Please see our latest article on the current plight of sterling:
http://www.homesgofast.com/view_news/1730/

Rate alert - GBP falling

The Pound is losing significant ground this morning - falling to €1.11 and $1.63 [mid-market rates] overnight on poor UK sentiment.

With little support for sterling or confidence in the UK economy, if this morning's public finance figures at 9.30am do not show some good news, there could be further to fall.

Pound falls dramatically after King speaks out

Mervyn King, the Bank of England's governor, did those of you needing to send money overseas a favour last week when the quantitative easing programme was not extended - but he undid all the good work yesterday with a speech slamming the prospects of a quick recovery in the UK.

As other economies around the world look to a brighter future, it looks like the UK will have a tough time in the next few months. The Pound reacted accordgingly, dropping nearly 2c against both the Euro and the US Dollar.

Monday Blues for the Pound

As often seems to be the case following a positive end to a week, sterling dropped away this morning after last week's gains following the Bank of England's announcement on Thursday.

Much of the improvements in rate last week were wiped out during the course of today, against both the Euro and US Dollar.

This week is all about inflation. We have key figures out in the UK, Europe and the USA, on Tuesday, Wednesday and Thursday. Which economy is performing best at the moment will probably indicate which currency will perform better too.

Elsewhere, look out for the RBA Minutes if you are buying Australian Dollars, and the Swiss interest rate decision if you need to send money to Switzerland. For the latest news contact Currency Index directly.

Pound up as QE programme paused

The Bank of England has said it will not extend its quantitative easing programme beyond £175bn for now - and the Pound has spiked up as a result.

Often such spikes are short-lived, so gains of nearly 1c against the Euro and US Dollar may not be available for long. Contact Currency Index for the latest update on 0800 043 2623.

Bank of England today

Take note of the Bank of England's monthly policy meeting at 12.00 today, whatever your currency requirements there is likely to be some impact.

Interest rates, which used to be the monthly headline from the Bank, are at 0.5% and are not likely to change any time soon. However, the big question in recent months has been whether there will be additional funds pumped in to the economy via 'quantitative easing'.

If the current £175bn programme is increased, we would expect to see the Pound fall significantly. If the amount is left as it is, there may be a small increase for sterling.

The decision is particularly hard to predict because last month the voting committee was split as to the right course of action, with Governer King voting for more action than most of his colleagues.

Whatever your currency needs, contact an experienced currency company today if you are concerned about your own forthcoming transactions.

This week's exchange rate news

There is a bank holiday in the USA for Labour Day today, so trading may be fairly quiet on the – but for the rest of this week we return to key announcements in the UK by the Bank of England on Thursday and on industrial figures on Tuesday.

Last week, Friday’s US employment data was very close to expectations, making little impression on the rate for sending dollars to America. In Australia, speculation that interest rates will be raised soon is making the AUD more expensive, despite the RBA’s decision to keep the central bank rate on hold at 3% last week.

In all cases for sending currency abroad, the Bank of England’s monthly announcement on Thursday is the key event this week. If the Bank continue their policy of quantitative easing, this is likely to be seen as negative for sterling, while any signal that the policy is coming to an end is likely to make exchange rates better. The vote was split last month and this month’s outcome will be taken as an important signal for the UK economy, and therefore sterling's value around the world.

Monday 7th

US MARKETS CLOSED

1100 – German factory orders

Tuesday 8th

Overnight – RICS House Price Balance

0930 – UK Industrial & Manufacturing Production

Wednesday 9th

Overnight – UK Consumer Confidence

0930 – UK Trade Balance

Thursday 10th

Overnight – UK GDP

1200 – Bank of England Interest Rates & Quantitative Easing

1330 – US Trade Balance

Friday 11th

0900 – ECB September Report

0930 – UK PPI Inflation

US Dollar rate down on jobs data

The US Dollar exchange rate has dropped nearly a cent, on the back of stronger-than-expected jobs numbers, released this afternoon.

Sending money to the USA has been getting more expensive in recent weeks, and the improved employment figures have not helped. Mid-market level is now just below $1.63.

Sterling outlook

The Bank of England meets next week and investors will be sensitive to any shift in tone, particularly whether it will extend or pause its £175 bn asset buying programme. This is overshadowing today's positive PMI data, which shows the UK services sector growing at its fastest pace in 2 years.

The Pound gained some value this morning, but for now seems to have tailed off, as all eyes are on next week's key Bank of England announcement on Thursday lunchtime.

This week's currency news

As we enter September, the Pound is set lower than most of the summer so far. Here are this week's major news announcements which could have an effect on commercial exchange rates. Contact Currency Index for the latest news.

TUESDAY 1st
10am - Eurozone unemployment
10pm - US consumer confidence for August

WEDNESDAY 2nd
7pm - FOMC (US interest rate) meeting minutes

THURSDAY 3rd
10am - European retail sales
12.45pm - European interest rate decision
1.30pm - US jobless claims

FRIDAY 4th
1.30pm - US non-farm payroll (key employment figures)

Exchange Rates dropping fast

We have seen the Pound continue to tumble so far this week - despite some positive news in retail sales and inflation figures.

The problem lies with the Bank of England's quantitative easing programme. There is more money being pumped into the economy than analysts expected, and that is causing concern for the UK economy.

Next week will see the central Bank's next announcement on the subject, so until we have some clarity, Currency Index expects the Pound to continue to struggle.

Current interbank [mid-market] rates:
£1 = €1.1450, US$1.6365, AU$1.9525, NZ$2.3840

Exchange rate update

A bad week for sterling - despite UK retail sales for July showing a good improvement, public borrowing figures were very poor, and German/European purchasing figures also showed considerable improvement for the European economy.

Euro interbank rates are now in the 1.15s and US Dollar exchange rates have settled in the 1.65s.

Further afield, the Australian Dollar has dropped below $2 to the Pound again, and NZD rates are falling too.

Monday morning's Nationwide house price index will be important, however there is little else in the pipeline to give sterling any support.

Bank of England send mixed signals

Today's Bank of England minutes (from their interest-rate setting meeting earlier in the month) showed a surprise split on quantitative easing - with 2 members (including Mervyn King) voting for even more extra money for the economy than the £50bn which was injected.

As the extra funds have tended to devalue the Pound, the shock news send sterling tumbling over half a cent against the Euro and Dollar this morning, with the Dollar rate recovering slightly this afternoon.

Tomorrow's UK retail sales will now be interesting - can we get some good news from the high street, or will further gloom add to the weight on sterling exchange rates?

Prices in UK hold steady

Today's UK inflation data shows prices were static in July, compared to analysts' expectations of a slight drop of 0.3% for July's inflation.

Year-on-year, prices rose 1.8%, again above expectations of 1.5%.

The Pound has spiked up a little on the news, although Germany's upbeat ZEW economic sentiment data has halted any huge gains against the Euro.

Thursday's retail sales figures are the next key UK data, so anyone worried about the Pound falling further in the coming weeks, may see this as a 2-day window to look at securing commercial exchange rates.

Rightmove House Prices

Rightmove's keenly watched monthly house price survey has shown a 2.2% drop in house prices in August - disappointing after July's 0.6% increase. As mixed signals continue to come out about the UK economy, it looks increasingly likely that things are not as good as the Treasury would have us believe.

The Pound's recent drop may well continue therefore and Currency Index would urge anyone looking for the best Euro exchange rates or cheapest US Dollar transfers, to consider locking in rates on a forward contract to eliminate the risk of paying even more in the future.

This week's currency news

Comments by the Bank of England’s governor King last week citing a “fragile” recovery at best in 2010 did not help the Pound – as France, Germany and Japan have all now technically come out of recession and the UK is therefore lagging behind its main competitors.

As a result, the Pound has continued to fall against many major currencies, making sending money overseas more expensive. Euro rates are nearly 4c down in the last 10 days, while the US Dollar rate is nearly 7c down in the same period.

There is not a huge amount of significant data this week, although the UK's inflation and retail sales numbers will be interesting. Whatever your currency requirements, contact a currency company to discuss them and make sure you are equipped with the latest news.

Monday 17th

Rightmove House Price Index (already released)

Tuesday 18th

0230 – Australian interest rate meeting minutes

0930 – UK CPI & RPI inflation figures

1330 – US PPI inflation and house building data

Wednesday 19th

1200 – Canadian CPI inflation

Thursday 20th

0930 – UK retail sales

1330 – US jobless claims

Friday 21st

1500 – US home sales

Australian dollar rate at 11 month low

The Aussie Dollar rate has slipped to an 11-month low today of 1.9650 [mid-market], on speculation that Australia will increase their interest rates in the coming months.

This would be the first upward interest rate move by a developed economy, since the financial crisis started last September.

If you need to send money to Australia in the coming months, contact your currency company to discuss your transaction - if interest rates do start to go up in Australia, exchange rates could easily fall further still.

Germany and France out of recession

Germany and France have both posted positive growth data in the last 24 hours - signalling the end, technically, of their recessions.


With the Bank of England stating that any recovery in the UK will be "fragile" at best in 2010, this is a signal that the Euro may gain value over sterling in the next 6 months.


Anybody needing to transfer Euros abroad should therefore be concerned, as falling exchange rates may dominate the rest of 2009.


Contact Currency Index if you would like to discuss your own requirements in detail.

Bank Downbeat on Recovery

The Bank of England says the UK has some way to go before recovering from the financial crisis, and that any recovery in 2010 will be "fragile".

This is contrary to the government's insistence that there will be a sharp rebound in 2010 - not so, according to the Bank's Governor Maervyn King.

This morning's unemployment figures showed an increase to 2.44m - the highest level since 1995.

Unsurprisingly, the Pound has not reacted well this morning, losing nearly a cent against both the Euro and US Dollar.

Contact Currency Index if you would like to discuss the implications for your currency transactions.

Inflation Report Tomorrow

At 10.30 tomorrow morning, the Bank of England's quarterly inflation report is published.

This could have profound effects on sterling's value in the currency markets, particularly after last week's decision by the Bank to extend quantitative easing by £50bn.

The likelihood is that inflation figures will be low - which usually causes the Pound to fall.

Contact Currency Index tomorrow morning if you need to send money abroad and are worried about exchange rates falling - you can call us on 0800 043 2623 from around 8.30am.

Pound continues down

The Pound has continued to lose ground today, as the lack of data in the UK following on from last week's disappointing announcement from the Bank of England left traders with little reason to buy GBP.

Don't forget that you can fix and guarantee an exchange rate up to 2 years in advance by using a Forward Contract with Currency Index. There is a small deposit to pay once a rate has been agreed, providing peace of mind that your currency requirement is then fixed in sterling instead of fluctuating day by day at the behest of international markets.

Please contact Currency Index if you would like to discuss your options.

This week's FX news

A quiet week ahead this week, with little major data out to affect commercial exchange rates. Contact Currency Index for our own views and opinions affecting any currency transactions.

Tuesday 11th

0930 – UK trade balance

1315 – Canadian new house builds

Wednesday 12th

0930 – UK average earnings, unemployment rate and jobless claims

1000 – Eurozone industrial production

Thursday 13th

0700 – German GDP

1330 – US retail sales and jobless claims

Friday 14th

1000 – Eurozone CPI inflation

1330 – US CPI inflation

US employment data boosts Dollar

This afternoon's non-farm payroll data is not the news you were looking for if you need to send money to the USA - the jobless total has fallen more than expected, as the US economy added more jobs in July than analysts had estimated.

The US Dollar has been volatile since the announcement, dropping below 1.67 [interbank rate] briefly but then rallying as the Pound has found some strength accross the board.

Those of you holding out for trading rates above 1.70 might like to reasses their targets following the main monthly employment news of the month from America.

What goes up...

...must come down. The Bank of England today unexpectedly announced a further £50bn injection of cash into the economy - a shock move which has dented the Pound significantly.

Exchange rates dropped over 1c against both the Euro and US Dollar immediately after the announcement at 12.30pm.

Next we look to tomorrow's PPI inflation figures in the morning, and at 2.30 the key monthly US emplyment data is announced.

More good news for GBP

The Pound has continued up this morning - breaking the 1.18 level against the Euro and 1.70 level against the US Dollar [mid-market rates] after more good economic news from the UK.

Manufacturing production was up 0.4% in June, while PMI services data was positive in the UK and negative in Germany. Retail sales also fell unexpectedly in the EU in June.

So the combination of good news in the UK and bad news elsewhere has pushed commercial exchange rates up today - however the interest rate decisions on the UK and Europe tomorrow could shake things up, so do consider looking at rates today if you'd like to take advantage of the recent movements when sending money overseas.

Pound up - this week's FX news

The Pound has soared to a 10-month high against the US Dollar and is near its best against the Euro this year, after Barclays and HSBC reported unexpectedly good profits today.

This week we have a number of important data releases which could make or break the recent rally - keep in touch with Currency Index for the latest news.

Tuesday 4th
Aussie retail sales (2.30am)
Aussie interest rates (5.30am)
Swiss CPI inflation (8.15am)
US income & consumption (1.30pm)

Wednesday 5th
UK manufacturing (9.30am)
European retail sales (10am)
US factory orders (3pm)
New Zealand unemployment rate (11.45pm)

Thursday 6th
Australian unemployment rate (2.30am)
Bank of England interest rates (12pm)
European interest rates (12.45pm)

Friday 7th
UK PPI core inflation (9.30am)
US non-farm payrolls and earnings (2.30pm)

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.