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)