Best Exchange Rates for 2009

Sterling hit's year highs
Sterling rose against other major currencies yesterday, hitting its highest levels so far this year against the US Dollar and very close to the highest against the Euro. The reason for the gains was in part due to pessimism about the UK's economy, and in particular the financial sector started to ease.

Also, we had the Consumer Price and Retail Prices Index data yesterday. This showed that inflation fell to its lowest level in more than a year. The CPI rose by 0.2 percent on the month, bringing the annual rate down to 2.3 percent from 2.9 percent in March.

The pound dipped immediately after the data, then resumed its uptrend to hit the highs mentioned above. This is great news for any clients that need to purchase their foreign currency with Sterling, and it would we wise to consider taking advantage of these rates while they are here. Of course they may keep climbing, but we have various data for the UK today that could easilty reverse these gains.

UK Economy
Yesterday the chancellor Alistair Darling predicted the recession will be over by the end of the year, despite more grim economic figures expected from the IMF today. The expenses scandal (which has really had very little impact on exchange rates) has been hogging the headlines recently, however the underlying problems with Darlings rose tintes outlook remain.

Mr Darling dismissed criticism that his Budget forecasts were fartoo optimistic and insisted the economy will return to growth by the end of 2009.

'I am not going to change my forecasts. I remain confident that we will see a return to growth at the turn of the year,' he journalists yesterday. However he is the only person who is so optimistic. International Monetary Fund (IMF) warning the economy could continue to shrink by a further 0.4 per cent next year.

Mr Darling's comments come as the IMF prepares to unveil its yearly assessment of Britain's economic prospects today. We'll watch the IMF predictions very closely, as if it's gloomier than before, expect the pound to fall away again.

Also today we have the Bank of England minutes. The Monetary Policy Committee (MPC) meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee.

It can have a big impact on the pound, as it gives an insight as to further measures such as interest rate movements and Quantitative Easing.

Other data today
We have had german Producur Price index this morning, which has pushed GBP/EUR up higher. Yesterday it hit 1.14, only to fall back to 1.13 overnight. when the german data was released at 7am this morning, it has pushed the rate back up to the high 1.13's.

We also have inflationary measures for Canada, and the FOMC minutes from the US. So, a significant day that is likely to cause some interesting swings in exchange rates.

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