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.

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.

UK economy shrinks most in 50 years

Figures out today showed the UK economy contracted by 2.4% in the first quarter of 2009, the worst figure in 50 years.

The figures were adjusted from earlier indications, and were much weaker than originally estimated.

The Pound has fallen sharply on the news, meaning the best exchange rates this year look like they may be a peak in the market for the moment.

This week's currency news

This week sees a number of data releases which are likely to bring some volatility back to the market, after a reasonably quiet week last week.

If you need to send money overseas, keep in touch with your currency broker for the latest news affecting your exchange rate.

For all rates against GBP
Tuesday - Nationwide house price survey
Tuesday - GDP data 9.30am
Wednesday - manufacturing inflation 9.30am

Australian Dollar
Tuesday - new home sales 1am
Wednesday - retail sales 2am
Thursday - Australian trade balance 2.30am

Euro
Thursday - unemployment rate 10.00am
Thursday - interest rate decision & speech 12.45pm
Friday - retail sales for May 10.00am

US Dollar
Tuesday - June consumer confidence 3.00pm
Wednesday - May home sales 3.00pm
Thursday - weekly earnings 1.30pm
Thursday - non-farm payroll data 1.30pm
Friday - market closed (US bank holiday)

Swiss Franc
Friday - Swiss CPI inflation (8.15am)

Euro weaker on ECB cash injection

The Euro exchange rate has recovered most of its losses of the last couple of days, after the ECB pumped €442bn into credit markets to encourage liquidity to help resolve the Eurozone's recession.

This is similar to the Bank of England's quantitative easing programme, which initially weakened the Pound before seeing it strengthen weeks later.

If the same pattern happens for the Euro, we could therefore be entering a brief period where the single currency is at cheaper levels.

If you are worried about the increased cost in recent months of sending money abroad, don't forget you can fix exchange rates up to 2 years ahead through a reputable currency broker.

Euro rate down on data releases

Euro exchange rates have fallen today, after German consumer confidence and European factory prices both came out higher than expected.

The Euro has strenghtened [become more expensive] across the board, so if you need to send Euros to Spain, France or any other Eurozone country, keep a close eye on rates to make sure you don't lose out.

GBP Outlook

With little data released this week, the Pound has continued its upward trend after a blip on Thursday after poor UK retail sales figures.

We are currently very near the best Euro exchange rates this year so far, and whether the Pound can find any more strength from here will become apparent this week. Analysts were only expecting 1.20 to be achieved towards the end of the year, so we would be surprised to see much more movement in the short term.

This week:

Today 9am – German IFO business survey

Tuesday 9am – European PMI (inflation indicator)

Wednesday 7.15pm – American interest rate decision & speech

Thursday 7am – Nationwide UK house price survey

Thursday 7am – US GDP

Swiss Interest Rates Held

In Switzerland, interest rates were kept on hold this morning at 0.25%. This was as expected, although the Swiss Franc has weakened slightly to 1.7670 [interbank] making money transfers to Switzerland slightly cheaper.

Pound falls on UK employment data

Despite better-than-expected UK jobs data, the headling unemployment rate has risen to its highest level since Labour came to power in 1997.

The Pound has tumbled since the announcement, falling a cent against both the Euro and Dollar. The best Euro exchange rates are now trading around 1.17 as a mid-market rate.

Bank of England minutes today

At 9.30 this morning the minutes from this month's Bank of England meeting are released. Any clues about interest rates going back up later in the year are likely to have a positive effect on the Pound, and therefore the best exchange rates available if you are transferring money overseas.

Keep in touch with your currency company if you would like to be informed of the latest movements affecting your transaction.

5 pieces of good news boost Pound

This morning's data has been overwhelmingly positive for the Pound, with commercial exchange rates available for people sending money abroad improving across the board.

UK CPI for May was up 0.6% (expectations were 0.3%)
UK CPI for the year to May was up 2.2% (1.9%)
UK Retail Prices for May were up 0.6% (0.2%)
UK Retail Prices for year to May were down 1.1% (-1.5%)
UK CPI for year to May was up 1.6% (1.5%)

The Pound gained almost 2c against both the Euro and the Dollar on the release of the news.

This week's currency news

This week's major economic data which is like to affect commercial exchange rates:

Monday:
Eurozone - employment change (10am)

Tuesday:
UK - CPI inflation data (9.30am)
Eurozone - CPI inflation data (10am)
Germany - ZEW economic sentiment (10am)
USA - PPI inflation data (1.30pm)

Wednesday:
USA - Federal Reserve chairman Bernanke's speech (5pm)

Thursday:
Switzerland - interest rate decision (8.30am)
UK - retail sales (9.30am)
Canada - CPI inflation data (12pm)

All these releases are likely to move exchange rates. If you are sending money to Switzerland, Thursday's interest rate decision will be key, while in Europe and the USA there are several important figures to show how each economy is coping with the recession.

New high for Pound

The Pound has continued to recover well after last week's uncertainty, and is currently trading at its best level in 2009 against the Euro.

Rates for sending money to Austria, Spain, Italy France and the other Eurozone countries are now over 1.17 on the interbank markets for the first time in 2009.

Pound recovers on government stability

The Pound has recovered somewhat as Gordon Brown held the first cabinet meeting since his emergency reshuffle.

Markets have reacted positively to Alistair Darling's continuation as Chancellor, while the immediate threat to Brown's leadership seems to have abated.

Confidence in some stability has fed through to forex markets, where the Pound is trading back up at 1.62 against the US Dollar and 1.16 against the Euro. The Australian Dollar rate has recovered to nearly 2.04.

We still expect volatility this week on any further developments, so if you need to buy currency at the best exchange rates for currency transfers make sure you keep in touch with your currency company.

Dollar strenghtens on non-farm data

This afternoon's key American employment data (non-farm payrolls) was much more positive than expected - leading to further strength for the US Dollar against the Pound.

Anyone transferring money in US Dollars will now find their exchange rate 6c lower than its peak only a few days ago, as political trouble in the UK continues to undermine sterling.

Pound plummets on UK political uncertainty

As the pressure increases on Gordon Brown, the Pound is falling rapidly across the board.

If you need to send money abroad contact your currency company urgently to discuss your requirements. Today sees the local election results throughout the day, followed by Euro poll results on Sunday.

Interest rates today

This lunchtime sees interest rate announcements both in the UK (12.00) and Eurozone (12.45).

Although neither central bank has much room for manouevre, the Eurozone announcement at 12.45 is accompanied by a speech from ECB President Jean-Claude Trichet, which often causes some volatility in the Euro exchange rates.

In the UK, there is no accompanying speech, but the interest rate announcement also includes a policy statement on quantititive easing, which can mean all commercial exchage rates against the pound can be affected.

But sterling weakens, is the upward run finished for now?

Wednesday afternoon has seen Euro and Dollar rates start to come back down - have we seen the best exchange rates for now?

- Sterling fell sharply against the dollar on Wednesday, erasing earlier gains after Asian monetary officials said they would keep buying US Bonds

- Weak American employment and services sector data hurt the outlook for global economy hitting riskier assets such as sterling

- The deteriorating market sentiment prompted investors to dismiss earlier strong UK services sector data, as UK shares tumbled 2.3%

- A worsening political crisis for Gordon Brown also helped take some shine from sterling

- Profit taking, "Sterling has had a very good run recently and people are also thinking it may be prudent to take some profit off the table now,"

- Investors are nervous ahead of the Bank of England and the European Central Bank policy decisions, as well as key US jobs data on Friday

- Hazel Blears' decision to step down follows Tuesday's resignation by Jacqui Smith. Both are seen as undermining Brown's authority on the eve of European and local elections

- Investors will also be looking to see whether there are any further announcements on quantitative easing on Thursday

PMI Grows

This morning another good surprise for the Pound - UK PMI (Purchasing Managers Index) showed expansion for May, as opposed to a small contraction expected.

PMI is a measure of the health of the UK services sector, which has been struggling during the recession - so the news is the latest in some boosts for the Pound this week. Sending dollars to the USA is, for example, now at its best level for 9 months.

UK Consumer Confidence Up

This month's Nationwide Consumer Confidence data showed an increase in sentiment in the UK - above analysts' expectations.

The announcement has given the Pound a further boost against both the Euro and US Dollar - making sending money overseas cheaper again as the recent rally for sterling continues.

If you are sending money to Dubai, don't forget that the AED rate is also pegged to the US Dollar, so in both cases the exchange rate is currently the best it's been since Autumn.

UK Elections & Exchange Rates

Anyone needing to transfer money overseas is encouraged to contact their currency company in advance of this Thursday's European and local UK elections.

Historically, confidence in a country has been eroded by landslide defeats for incumbent parties - so international markets (and sterling) may not react well to any Labour wipeout this week.

The Pound is relatively strong at the moment but is still sensitive to negative news.

Australian interest rates held again

The Reserve Bank of Australia last night held interest rates, bad news for any of you making money transfers to Australia. A cut in interest rates may have weakened the Aussie currency, making exchange rates better for buying dollars.

The mid-market GBP-AUD rate has stayed at around the 2.02 level this morning.

Pound gains more strength

The Pound has continued on its recent run, now trading at the best rates for buying Euros and US Dollars since last year.

Sterling touched €1.16 and $1.6450 as traders continued to move out of Euros and Dollars into more risky assets.

Look out for Eurozone and UK interest rate decisions on Thursday which may have an effect on rates in general.

The Reserve Bank of Australia also makes its monthly interest rate decision overnight tonight, which could be important if you are sending money to Australia.

UK house prices in surprise increase

Nationwide this morning has reported a 1.2% rise in house prices for May.

Expectations had been for a 0.3% drop - so the news has given the UK economic outlook - and therefore the Pound - a welcome boost.

With more key data out next week which could potentially provide trouble for sterling, anyone looking to transfer money overseas should contact a currency broker to discuss the latest developments.

Mixed Euro and US data keeps rates steady

The Pound hovered around its newly-found levels against both the Euro and Dollar today, as mixed data from the States and Eurozone did little to encourage either of the currency pairs.

EMU consumer confidence came out at the level expected by analysts, while in the USA there was some good news on the jobs front but bad news in construction of new homes.

As a result sending money in dollars is still around its best level since November, although the mid-market rate has dropped back below 1.60.

For Euro exchange rates, overnight levels of 1.15 were not sustained but a relatively healthy 1.14 is still showing on the live markets.

Tomorrow's Nationwide house price survey in the UK will be watched at 7am for any clues as to the next direction for the Pound.

Best rates this year

The Pound has continued its recent surge, reaching 1.60 against the US Dollar and nearly 1.15 against the Euro.

Both currencies are now around the cheapest they have been all year against sterling.

If you need to transfer money overseas in Euros or Dollars, it is worth discussing your requirements with a UK currency company to make sure you do not miss any opportunities to secure a preferential rate.

This week's data

News out this week which might affect all commercial foreign exchange rates:

Transferring money to the USA
1500 Tuesday - consumer confidence
1500 Wednesday - US house price index and home sales figures
1330 Thursday - durable goods orders
1330 Friday - GDP

Transferring money to Europe
1000 Thursday - consumer confidence
1000 Friday - CPI inflation data

Transferring money to Australia
0200 Thursday - new home sales

UK Data
0001 Friday - consumer confidence
0700 Friday - Nationwide house prices

...and Pound drops back down after S&P Rating

Following overnight gains the Pound has dropped back sharply after the credit agency S&P downgraded the outlook for the UK economy from "stable" to "negative".

If you need to transfer money overseas contact your currency company for the latest developments in a volatile market today.