Sterling GBP Euro EUR Dollar USD Forecast

US Dollar
Some dramatic movements in exchange rates yesterday and this morning. The US has announced yesterday evening that it will pump $1.2 Trillion dollars into the economy [more on this below], which instantly weakened the dollar and pushed rates up from 1.39 to 1.43. A huge movement, and a great opportunity for any clients looking to by US Dollars.








Euro
The opposite for GBPEUR I'm afraid - rates have plummeted following dreadful jobless data from the UK. This has severely weakened the pound, and rates are down into the 1.05's. Also the weakening of the US Dollar has had a knock on effect of weakening the Euro as often happens, which has contributed to the fall in GBPEUR rates:




US pumps $1.2 Trillion into economy

The US Federal Reserve says it will buy almost $1.2 tn dollars (£843 billion pounds) worth of debt to help boost lending and promote economic recovery. It said it would start buying long-term government debt and expand purchases of mortgage-related debt.

They follow the UK, as the Bank of England has already started buying debt to try and expand money supply - known as quantitative easing. The pound has been weakened because of this, and it looks like the dollar is following.

The Federal Reserve said it hopes the measures will boost mortgage lending and the struggling housing market by lowering interest rates on mortgages and other forms of consumer debt.

The US central bank also kept interest rates unchanged at close to zero after its two-day policy meeting. In December, it cut rates as low as they can go - to a range of zero to 0.25%. The Fed's unprecedented measures come as central banks around the world are grappling with how to fight the worst recession since World War II.

Wheras this is bad news for the global economy, it presents a rare opportunity to purchase dollars at rates much better than in recent times. Get in touch today if you have a requirement for US Dollars.

UK Unemployment
Sterling tumbled on Wednesday after a jump in UK unemployment to a 12-year high pointed towards a deepening recession, and on concern that record government bond issuance will greatly inflate the money supply.

The number of people claiming jobless benefit rose in February by the biggest amount since records began in 1971. The wider measure of unemployment rose above the 2 million mark for the first time also since 1997.

Russell Jones RBC Capital Markets said the rise in unemployment and weak wage data was "horrible, catastrophic" for the UK economy and things will get even worse.
So, as predicted in yesterdays report, the unemployment figures and fed data has had a huge impact on exchange rates.
Todays Data
For the UK and EU, only money supply data for the UK, and Industrial Production data for the EU.
The main data today though comes from the other side of the atlantic, with Consumer Price Index data from Canada, and Jobless data this time from the US.

Summary
In these extremely volatile markets, you need to make sure you are not caught out if you have a requirement to buy or sell foreign currency. Get in touch today to discuss your currency requirements, and find out what currency tools are available with Foremost Currency Group to protect you from adverse exchange rate movements.
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