Sterling has tumbled this morning following the release of UK GDP figures which were much worse than analysts had expected. The shock numbers showed that the UK economy shrank by 0.5% over the last 3 months of 2010. The severe weather seen in December dramatically hit GDP, particularly in the construction and service sectors. However, according to The Office for National Statistics, even if the impact of the poor weather was excluded, economic activity would have been ‘flattish’.
The governor of the Bank of England is due to make a speech tonight, whilst the minutes from the previous Bank of England Monetary Policy Committee (MPC) meeting will be released tomorrow at 09:30. Recent calls by some economists and in particular MPC member Andrew Sentance to increase interest rates in the face of above target inflation will now be weakened.
Currently the Pound trades in the region of 1.57 against the US Dollar and at 1.15 against the Euro.
Given current market volatility, please do not hesitate to contact Currency Matters to discuss any foreign currency exchange requirement. Currency Matters can provide a number of products including Forward Contracts and Stop Loss/Limit Orders which can help you manage your foreign currency exchange risk.
The exchange rates mentioned in the above blog are based on the current interbank rate. Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote.
Last week the Pound appreciated strongly against the Euro rising from 1.15 on Monday 3rd January to 1.20 by close on Friday the 7th January.
Today GBPEUR continues to trade near 1.20 on the interbank market, the best rate since September 2010 and only 3 cents below the 2010 high of 1.23 seen in June. Against the US Dollar the Pound continues to trade between 1.53-1.55.
If you have any currency exchange requirements in 2011, please do not hesitate to contact the dealing team to discuss how best to manage your currency exchange and international payments.
The exchange rates mentioned in the above blog are based on the interbank rate at the time of writing. Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote.
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The Pound has continued its recent recovery against the Euro and the US Dollar following the double bout of good news released earlier this week of better than expected UK GDP and S & P’s UK credit rating upgrade to AAA Stable. The Pound is now trading near 1.15 against the Euro and near 1.59 against the US Dollar on the interbank market.
Following the release of minutes from the Bank of England Monetary Policy Committee (MPC) and the Government’s Spending Review, the Pound has remained relatively stable near its current levels in the region of 1.13 against the Euro and 1.57 against the US Dollar.
The Bank of England Minutes confirmed that there was a three way split in the nine member MPC October meeting. Seven members voted to keep interest rates and quantitative easing (QE) on hold, whilst one member voted for a 0.25% interest rate hike, whereas Mr Posen voted for a £50 billion extension of QE.
The minutes indicated that whilst the clear majority of MPC members did not see the case for further QE at present, they did indicate that the chance of further QE in the future had increased. Going forward the prospect of further QE and low interest rates will continue to weigh on Sterling’s value.
During the UK Spending Review, Chancellor George Osbourne unveiled the largest UK spending cuts since World War II. Departmental budget cuts averaged 19%, which was less severe than the 25% cuts expected, largely thanks to an additional £7 billion found in savings to the welfare budget. The Spending Review aims to cut £81 billion from public spending over four years.
The exchange rates mentioned in the above blog are based on the current interbank rates. Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote.
This week we have seen the Pound fall further against the Euro as the probability of further Quantitative Easing (QE) from the Bank of England increased. Earlier in the week Mr Posen a member of the Bank’s Monetary Policy Committee (MPC) became the first member of the MPC to openly call for further QE since November. However, today his tone seems to have softened suggesting that the other MPC members may be able to convince him that his calls for further QE are premature.
Whilst further QE is by no means a foregone conclusion, the increased risk of further QE has weighed significantly on the Pound. Despite a raft of bad news from the Euro-zone; including the downgrading of Spain’s credit rating from AAA to AA1 and the mounting costs of the Irish bailout of Anglo Irish bank, the Euro has appreciated strongly against the Pound, trading above 0.86p (GBPEUR 1.15).
Further falls in Sterling could be seen, particularly if support for further QE gains momentum. Many analysts are now predicting that GBPEUR could fall further, with 1.12 being noted as the next downside level.
Given the current uncertainty surrounding the Pound, you may deem it appropriate to hedge against any future falls in the Pound’s value. Currency Matters can suggest a number of products and strategies which can eliminate currency risk. Please do not hesitate to contact the dealing team to discuss any upcoming currency requirements.
The exchange rates mentioned in the above email are based on the current interbank rate. Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote.
The US Dollar has continued to fall following Tuesday’s meeting of the Federal Reserve. At the meeting the Federal Reserve kept interest rates on hold at 0.00-0.25% and kept quantitative easing at current levels. However, the Federal Reserve opened the door to the possibility of additional quantitative easing indicating that it would be prepared to provide additional accommodation if needed to support a fragile economic recovery.
On the interbank market GBPUSD currently trades above 1.56 whilst EURUSD trades at 1.33.
In the UK, Sterling has come under some downward pressure following the release of recent disappointing economic data including poor retail sales and higher than expected government borrowing, which totalled £15.3 billion in August. The Bank of England Minutes released this week showed that the Monetary Policy Committee voted to keep both interest rates on hold at 0.5% and its Quantitative Easing Asset Purchase Scheme at £200 billion. The minutes made no clear indication that further Quantitative Easing (Q.E.) would be needed however many analysts interpreted that the chances of further Q.E. had increased since the previous meeting. The Bank of England remains torn between trying to support a fragile economic recovery, whilst trying to anchor inflation which remains stubbornly above the 2% target.
As a result of the above, extreme volatility has been seen in the GBPEUR exchange rate, yesterday hitting its lowest level since May before recovering slightly today. The current GBPEUR interbank rate trades at 1.17.
Given current market volatility, please do not hesitate to contact Currency Matters to discuss any foreign currency exchange requirement. Currency Matters can provide a number of products including Forward Contracts and Stop Loss/Limit Orders which can help you manage your foreign currency exchange risk. The exchange rates mentioned in the above blog are based on the current interbank rate. Please do not hesitate to contact the dealing team on +44 (0) 1695 581 669 for a live quote.
The US Dollar has fallen sharply late this afternoon (14/09/10) following a report from Goldman Sachs suggesting that the Federal Reserve could announce a new program of asset purchases (quantitative easing) in order to support the weak economy and to try and avoid a double dip recession.
The Euro has made strong gains against the US Dollar, forcing EURUSD nearly two cents higher to a high so far of 1.3021. This has caused some volatility in EURGBP which currently trades at 0.8360 (1.1962) on the interbank market.
The Pound has also made gains against the USD pushing the interbank rate through 1.55.
Given current market volatility, please do not hesitate to contact Currency Matters to discuss any foreign currency exchange requirement.
The Bank of England has today kept UK interest rates on hold at 0.5% and the Bank’s current asset purchase scheme known as quantitative easing also remains on hold at £200 billion.
The Pound continues to look firm against the US Dollar trading above 1.58 on the interbank market and against the Euro the pound trades near 1.20.
The market will now await the European Central Bank announcement later today and on Friday the latest US employment data will be released.
Please do not hesitate to contact Currency Matters for a live quote. Please note the exchange rate you are able to achieve will depend on the amount being exchanged.
This morning the Office for National Statistics released its latest UK GDP estimate. The estimate was better than market expectations at 1.1% quarter on quarter and at 1.6% year on year.
As a result the Pound has appreciated towards 1.54 against the US Dollar and 1.19 against the Euro.