All posts by mporter

Currency Matters

GBP/USD has climbed to its highest level since 30th April and currently trades at 1.62 on the interbank market. Strong Resistance is expected at 1.63. If you have any upcoming requirements to buy USD, please do not hesitate to contact a dealer on telephone 01695 581 669 for a live quote.

Currency Matters can offer a number of products which can help you plan your future currency requirements. By using a Forward Contract it is possible to purchase currency today at a guaranteed exchange rate for settlement at a later date. A small deposit is required to secure a Forward Contract with the balance due by the agreed future value date.

Currency Update

Yesterday Wednesday 15th saw Greece’s troubles resurface. With Greece facing a deepening recession, the Greek Prime Minister is set to meet with his French, German and Luxemburg counterparts next week to persuade Eurozone leaders to extend the period of austerity from two to four years, essentially planning to reduce the Greek budget deficit by 1.5% of GDP annually compared to the previous agreement of 2.5%. Due to the slower pace of deficit reduction it is believed an additional £20bn of funding would be required to support Greece.

In the UK, yesterday’s jobs figures continued to defy the recession with unemployment down to 8% and the claimant count dropping by 5,900 in July. Minutes released by the Bank of England also confirmed that the Monetary Policy Committee was unanimous in its decision to leave the bank rate unchanged at 0.5% and to maintain its Quantitative Easing Asset Purchase Programme at its current level of £375bn. Unlike in previous meetings, the bank did not hint towards a bias of further rate cuts giving Sterling a further boost. It is expected that the Bank will gauge the impact of the new Funding for Lending Scheme and the completion of its current £50bn extension of QE in November before it makes a decision on more monetary easing. Today, UK retail sales also beat market expectations growing by 2.8% year on year.

The better than expected news from the UK, coupled with the Eurozone’s on-going troubles has pushed GBPEUR higher towards 1.28, currently trading at 1.2793 (EURGBP 0.7817).

Elsewhere the Pound trades between 1.56-1.57 against the US Dollar and the Euro trades at 1.23-1.24 against the US Dollar on the interbank market.

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote or for advice and tailored solutions to your currency requirements.

16/08/12 10:30

Contraction in UK GDP

The Pound has fallen back below 1.28 against the Euro and back below 1.55 against the US Dollar following this morning’s preliminary UK GDP data release. The data showed that the UK economy contracted much more than many economists expected.

In the second quarter UK economic output plummeted, contracting -0.7% quarter on quarter and contracting -0.8% year on year compared to a median forecast of -0.2% QoQ and -0.3% YoY. Whilst factors including the poor weather and the Jubilee bank holidays may have exaggerated the fall in GDP, underlying economic growth is expected to be close to flat or declining over 2012 despite a predicted improvement in the third quarter.

With UK inflation falling back towards the target of 2% (currently at 2.4%) and the economy in contraction, the likelihood of further Quantitative Easing and an even greater prolonged period of low Bank of England interest rates (currently 0.5%)has increased.

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote or tailored solutions to your currency requirements.

11:00 25/07/12

EURO

The Euro has continued to come under strong selling pressure as the European Central Bank has indicated that it will not accept Greek government bonds as collateral. EURUSD has fallen from the morning high of 1.2282 to a low of 1.2144. 1.2144 representing the lowest EURUSD exchange rate since June 2010 when the rate hit a low of 1.1876.

The Pound has made strong gains against the weakening Euro hitting a high earlier of 1.2866, the highest level since October 2008. Against the US Dollar the Pound tracked the sharp falls in EURUSD with GBP falling from 1.5724 to a low of 1.5626.

20/07/12 15:20

Currency Matters

Currency Matters are currently able to offer GBPEUR @ 1.24-1.25. The GBPEUR exchange rate has not been significantly higher than its current level since 2008.

Currency Matters can offer a number of products which can help you plan your future currency requirements. By using a Forward Contract it is possible to purchase currency today at a guaranteed exchange rate for settlement at a later date. A small deposit is required to secure a Forward Contract with the balance due by the agreed future value date.

If you are paying or receiving foreign currency we can help save you money.

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for further information or for a live quote.

08:00 06/07/12

BoE and ECB

As expected the Bank of England has increased its programme of Quantitative Easing by an additional £50bn taking the total asset purchase scheme to £375bn. The Bank also decided to hold the bank rate at 0.50%.

In Europe, the European Central Bank cut its key interest rate by 0.25% to 0.75% a record low.

On the interbank market the Pound has climbed back above 1.25 against the Euro, currently at 1.2525. Whilst the Euro has fallen back below 1.25 against the US Dollar and currently trades at 1.2440. The Pound continues to trade between 1.55 and 1.56 against the US Dollar.

Please do not hesitate to contact the dealing desk on +44 (0) 1695 581 669 for a live quote.

05/07/12 13:10

Bank of England

Minutes released today by the Bank of England have revealed that the Bank came close to extending its programme of Quantitative Easing (QE) as four of the nine member Monetary Policy Committee voted to extend QE. Three members including Bank of England governor Mervyn King voted to extend QE by an additional £50bn whilst one member voted for a smaller addition of £25bn. The Bank also considered the merits of cutting the Bank Rate from 0.50% but concluded that a rate cut had no advantages over more QE.

As previously discussed, further QE from the Bank of England continues to pose a risk to Sterling’s value. On release of the minutes at 09:30 the Pound fell back below 1.24 against the Euro hitting a low of 1.2350 and back below 1.57 against the US Dollar hitting a low of 1.5650 before recovering back to 1.5730 against the US Dollar and 1.2385 against the Euro.

10:00 20/06/12

Spanish Bank Bailout fund

The markets have responded favourably to the agreed bailout of Spain’s banks. Eurozone ministers have agreed to lend Spain as much as EUR 100bn to fund its troubled banks. Equities in Asia and Europe have opened higher and Spain’s bond yields have also dropped back below 6%, reducing the cost of funding Spain’s debt.

The Euro also opened a cent higher against the US Dollar, hitting a high earlier of 1.2668 and ¾ pence higher against the Pound hitting a high earlier of 0.8155 (GBPEUR 1.2262). The Euro has however since pared the majority of these gains and currently trades at 1.2550 against the US Dollar and 0.8075 (1.2384) against the Pound.

As the week progresses the markets focus will turn to the upcoming Greek elections on June 17th. Many are viewing the elections as a referendum on Greece’s membership of the European Monetary Union. If Greece renounces its bailout terms, Greece’s international partners could stop providing the rescue loans which the country depends on. That could lead Greece to default and potentially force Greece out of the Eurozone.

12:30 11/06/12

GBPEUR @ its highest level since 2008.

The Pound has appreciated following today’s Bank of England announcement that the Monetary Policy Committee has kept interest rates unchanged at 0.50% and Quantitative Easing at its current level of £325bn. Whilst this was widely expected, the possible threat of further QE always poses a threat to the value of the Pound and as such the market was reassured by the announcement and the Pound has appreciated.

Because of the continuing economic and political woes facing the Eurozone the Pound has now appreciated to its highest level against the Euro since November 2008, hitting an interbank high of 1.2496 earlier today.

Currency Matters can offer a number of products which can help you plan your future currency requirements. By using a Forward Contract it is possible to purchase currency today at a guaranteed exchange rate for settlement at a later date. A small deposit is required to secure a Forward Contract with the balance due by the agreed future value date.

Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for further information or for a live quote.