Showing posts from April, 2010

UK house prices at 3 year high. Pound steady against Euro after Spanish rating cut.

Good Morning. The Pound has been pretty quiet for the last two days which is surprising considering the volatility we would expect after Greece's credit rating was cut to "junk" (meaning Greece is un-investable), and Portugal & Spain's were both downgraded too. Rates @ 09:00am are as follows:
GBP/EUR 1.1521GBP/USD 1.5222GBP/AUD 1.6436GBP/NZD 2.1131GBP/CAD 1.5347GBP/ZAR 11.244GBP/JPY 143.09GBP/CHF 1.6520EUR/USD 1.3205UK House Price Inflation hits a 3yr high

The annual rate of UK house price inflation has hit double figures for the first time since June 2007. The Nationwide building society (one of Britain's biggest lenders) said that house prices in the UK had risen by 10.5% in the year to the end of April. They stated that house prices rose by 1% in April to push the cost of the average home in the UK to £167,802. They did however, predict that the past year's surge would tail off later this year, with sellers starting to outnumber buyers.

US Interest Rates


Pound vs Euro driven by election and problems in Europe

Good Morning. The pound rallied to levels above 1.16 yesterday afternoon but has since fallen back to open this morning at 1.1520. It is a similar story against the Dollar. Mortgage approvals are the main release today from the UK but probably wont have a huge affect on the Pound so expect the election, and the situation in Europe to be the main drivers. Rates @ 08:55am are as follows:
GBP/EUR 1.1514GBP/USD 1.5383GBP/AUD 1.6645GBP/NZD 2.1347GBP/CAD 1.5411GBP/ZAR 11.308GBP/JPY 144.29GBP/CHF 1.6530EUR/USD 1.3355Market Report W/C 26th April 2010


GBP-USD exchange rates remained relatively stable during the early part of last week, trading around the 1.53 mark on the Inter Bank for the majority if the week.

Both currencies were particularly strong, Sterling as a result of positive CPI data and the Dollar in light of its safe haven status. Higher than expected inflation data from the UK helped to fuel speculation that the Bank of England may decide to raise interest rates ahead of schedule …

Pound vs Euro forecast April - May 2010. FCG Market report:

Good Morning. The pound fell back to nearly 1.1450 against the Euro by close of play on Friday but has opened this morning at 1.1560, mainly due to more fears over Greece and the rest of the Eurozone. It is also back up above 1.5460 against the US Dollar. Rates @ 08:55am are as follows:
GBP/EUR 1.1569GBP/USD 1.5470GBP/AUD 1.6649GBP/NZD 2.1488GBP/CAD 1.5442GBP/ZAR 11.380GBP/JPY 145.56GBP/CHF 1.6607EUR/USD 1.3364

Last week we witnessed a positive week for Sterling against the single currency with a 2.25% increase from the start of the week. The high point of 1.1619 was the highest level seen since January of this year and represented some excellent buying opportunities. The peak however was short lived after GDP figures for the UK on Friday showed a decrease to 0.2% for the first quarter of 2010 from 0.4% and the rate fell by around 1.25%.

Prior to Friday the main news that caused the markets to move last week were the Bank of England minutes where it showed all 9 of the committee membe…

Sterling vs Euro at 3 month high. Greek budget debt rating cut.

Good Morning. The pound fell over a cent yesterday against the Dollar but picked up against the Euro to hit highs we haven't seen since January after it was announced that the Greek budget deficit was worse than thought. Rates @ 08:45am are as follows:
GBP/EUR 1.1588GBP/USD 1.5374GBP/AUD 1.6702GBP/NZD 2.1624GBP/CAD 1.5345GBP/ZAR 11.475GBP/JPY 143.48GBP/CHF 1.6596EUR/USD 1.3265Greece's budget deficit worse than first thought

Greece's budget deficit was much larger than expected last year and the figures may get worse still, according to the EU's statistics office. The new data shows a gap of 13.6% of gross domestic product (GDP), not the 12.7% first reported. The credit rating agency Moody's also cut its rating on Greek debt and warned that there could be more downgrades. Moody's cut its rating on Greek sovereign debt to A3 from A2, saying that there was "a significant risk that debt may only stabilise at a higher and more costly level than previously estimat…

Sterling Euro still at 7 week high. How will the election debate affect the Pound?

Good Morning. The pound has been pretty steady so far this morning after slightly worse than expected retails sales but slightly "better" than expected UK borrowing figures. Rates @ 09:45am are as follows:
GBP/EUR 1.1511GBP/USD 1.5432 GBP/AUD 1.6597 GBP/NZD 2.1617 GBP/CAD 1.5383 GBP/ZAR 11.444 GBP/JPY 143.95GBP/CHF 1.6488 EUR/USD 1.3409"UK borrowing hits record level"

It was announced this morning that government borrowing has hit a record high of £163.4bn this year. This borrowing figure for the 2009-10 financial year is lower than the £167bn predicted by the Chancellor Alistair Darling in April's Budget but is still the most borrowed by the government in peacetime and could weigh heavily on the Pound once the election is out of the way, whatever the outcome.
UK retail sales rose 0.4% in March which was slightly less than the expected 0.6%. After this Sterling rose around 20 pips against the dollar, and remained just above 1.15 against the Euro. "There had b…

Sterling exchange rates rise due to CPI data

Good Morning. The pound has risen against the Euro and US Dollar after better than expected CPI. We'll take a detailed look at this in a moment. First, rates @ 08:30am are as follows:
GBP/EUR 1.1450GBP/USD 1.5375GBP/AUD 1.6491GBP/NZD 2.1586GBP/CAD 1.5283GBP/ZAR 11.300GBP/JPY 143.35GBP/CHF 1.6417EUR/USD 1.3424CPI Data
Consumer Price Index is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. CPI is a key indicator to measure inflation and changes in purchasing trends.

As the figure was much higher than expected, this shows inflation is rising. So why did this boost the pound? Well, higher inflation generally leads to higher interest rates to control it. Higher interest rates mean a better return for investors. This then drives investment towards Sterling strengthening the currency. The net result has been a rise in exchange rates.

UK rates are at a record low 0.5 percent and the BoE has only recently…

Sterling up against Euro, down against USD

Good Morning. The pound rose against the Euro due to ongoing problems with Greece's debt situation. The problems in Greece weakened the Euro, and also helped strengthen the US Dollar. So, pound is up against Euro, but down against US Dollar. Rates @ 08;30am are as follows:
GBP/EUR 1.1400GBP/USD 1.5348GBP/AUD 1.6508GBP/NZD 2.1581GBP/CAD 1.5520GBP/CHF 1.6341GBP/ZAR 11.379GBP/JPY 142.25EUR/USD 1.3458Political Situation
Four opinion polls suggested on Tuesday that the surge in support for the smaller Liberal Democrats may be losing momentum, but the party is still keeping the ruling Labour party in third place, pointing towards a hung parliament where no single party will emerge with outright control. This would be bad news for the pound, as a hing parliament would struggle to push through legislation to reduce the deficit. However, Greece's problems stemmed a big fall against the Euro.

Today's Data
Consumer Price Index data for the UK, and this will be watched closely for a…

Pound to Euro Forecast / Data releases

Good morning. The pound has fallen from it's 7 week highs against the Euro and US Dollar. This morning we'll look at a detailed report on what's moving pound to Euro rates, in addition to a breakdown of the weeks economic data.

Pound vs Euro
The past week has seen movement of a slightly less volatile nature than what we have seen in recent weeks for the Sterling- Euro currency pairing, with a 1.8% shift between the highs and lows of the week, to put this into monetary terms it would mean a difference of £3,600 on a £200k trade.

Sterling began the week strongly, anticipation of a change of government hanging optimistically in the air leading up to Thursday’s groundbreaking televised debate between main party leaders. Despite common belief that the policies revealed in this would have an affect on the market, we have actually seen very little change, mainly due to a lack of any hard line financial policy being revealed.

That said, Nick Clegg’s performance could prove to have a …

Pound up on opinion polls

Good Morning. The pound rose yesterday, again on opinion polls. The latest poll showed an outright majority for the conservatives, and this strengthened the pound. Also helping GBP/EUR rates climb was the Euro coming under pressure on persistent concerns about how Greece will repay it's debts. Rates this morning are as follows:
GBP/EUR 1.1379GBP/USD 1.5399GBP/AUD 1.6530GBP/NZD 2.1644GBP/CAD 1.5432GBP/CHF 1.6303GBP/ZAR 11.310GBP/JPY 142.58EUR/USD 1.3532Political Uncertainty
Most recent polls have suggested the May 6 vote will result in no one party winning an overall majority. Last year polls had consistently shown a clear victory for the Conservatives. In recent weeks their lead has shriveled, suggesting no overall winner in the election.

Sterling has weakened because the prospect of a hung parliament has unsettled financial markets, as it casts doubt over whether there would be any agreement to cut Britain's record Budget deficit.

Labour has warned that taking too sharp an ax…

Sterling still strong - 7 week high against USD

Good Morning. Sterling hit a 7 week high against the USD yesterday, boosted by solid UK economic data, with some analysts saying the prospect of a hung parliament after May's election looked to be priced in. Rates against the Euro remained fairly rangebound, still close to a 7 week high. Rates @ 09:00am are as follows:

GBP/EUR 1.1380
GBP/USD 1.5475
GBP/AUD 1.6566
GBP/NZD 2.1652
GBP/CHF 1.6323
GBP/CAD 1.5444
GBP/ZAR 11.326
GBP/JPY 144.04
EUR/USD 1.3597Evidence that the economy is faring better than expected has prompted a slight recovery in the pound, which has been knocked by concerns about Britain's mounting debts and uncertainty linked to the election outcome. However, do be aware the continued political uncertainty will continue to affect rates over the remainder of the month. Euro may weaken further?Portugal may need to take additional steps to cut its budget deficit if economic conditions worsen, the European Commission was warned. European Commissioner for Economic Policy Olli…

Pound to US Dollar Forecast 2010

Good Morning. Today we'll have a detailed look at GBP to USD. First a quick look at rates across the board:
GBP/EUR 1.1296GBP/USD 1.5388GBP/AUD 1.6523GBP/NZD 2.1621GBP/CHF 1.6216GBP/CAD 1.5370GBP/ZAR 11.167GBP/JPY 143.80EUR/USD 1.3620Pound vs US Dollar
Over the past week we have seen a relatively flat movement pattern for the Sterling-Dollar currency pairing, with only a 1.24% difference between the highs and lows of the week. Whilst most European markets were closed on Easter Monday, the U.S. exchanges were business as usual. Data released from New York that day included the Purchasing Manager’s
Index and pending home sales which were both seen to exceed expectations.

This showed that U.S. employers were creating jobs at the fastest rate in three years this past March, reinforcing the perception that the U.S economy is definitely on it’s path to recovery.
As European markets reopened again on Tuesday, Sterling seemed to remain fairly well supported until Prime Minister Gordon Brown an…

Pound Euro Forecast

The markets re-opened on Tuesday after the long Easter weekend to Gordon Brown’s announcement to fix the date of the general election for the 6th May. GBP/EUR immediately came under major influence from the opinion polls, not in favour of a particular party, but in speculation of either party achieving a strong majority.

Due to the British first-past-the-post electoral system, if neither party can obtain a strong enough majority the outcome results in a Hung Parliament. It’s feared that this scenario will result in a Government that lacks the power to take the tough actions needed to tackle the UK’s mounting debt problems and ultimately provide a strong enough platform for Sterling to make any long-term gains.

Although the polls generally showed a mixed outcome, those showing a Conservative majority had the greatest influence and GBP/EUR steadily moved through the 1.13 barrier further encouraged by reoccurring concerns over the Greek economy.

By Thursday morning the opinion …

Sterling falls from highs vs EUR and USD

Good Morning. Sterling rose to a seven-week high versus the euro and a six-week high against the dollar on Friday on robust UK data, but analysts said structural problems facing the UK would hamper gains in the long term. Rates have dropped back slightly this morning, and at 09:00am rates are as follows:
GBP/EUR 1.1344GBP/USD 1.5434GBP/AUD 1.6618GBP/NZD 2.1594GBP/CAD 1.5535GBP/CHF 1.6368GBP/ZAR 11.186GBP/JPY 144.19GBP/NOK 9.096EUR/USD 1.3604
Today we have some retail information for the UK along with housing data. As will likely be the case during April however, ongoing political uncertainty is likely to be the main factor in Sterling exchange rates.

The latest Sun YouGov poll put the opposition Conservatives 9 points ahead of Labour, which would make it the largest party in a 650-seat parliament but deny it an overall majority. Even if one party were to win the election by a clear majority, there would still be negative factors affecting sterling.

Open a free trading facility, and quote …

Pound vs Euro at 7 week high.

Good Morning. The pound has risen to a 3 week high against the US Dollar, and a 7 week high against the Euro. UK output was up, housing data was better than expected and the ongoing problems in Greece all helped to boost Sterling rates. At 08:30am this morning exchange rates are as follows:
GBP/EUR 1.1437GBP/USD 1.5320GBP/AUD 1.6482GBP/NZD 2.1601GBP/CAD 1.5325GBP/ZAR 11.040GBP/JPY 143.37GBP/CHF 1.6394EUR/USD 1.3393The Bank of England and European Central banks both left rates on hold yesterday as expected, so this had little impact on rates. Despite its gains against the euro, the pound was unable to gain significantly against the dollar and stayed on the backfoot overall as uncertainty surrounding the outcome of a looming UK election kept the currency under pressure. This is likely to be the case for the remainder of the month, as differing opinion polls give strength or weakness to the pound due to the fears of a hung parliament.

Debt issues are still hanging over and until we have…

Pound vs Euro at 6 weeks high. Election causing volatility.

Good Morning. Sterling hit a six-week high against a broadly weaker euro and a basket of currencies on Wednesday, but it fell against the dollar after a weaker-than-expected survey on UK services sector activity. Rates @ 08:30am are as follows:
GBP/EUR 1.1389GBP/USD 1.5158GBP/CAD 1.5273GBP/AUD 1.6396GBP/NZD 2.1559GBP/CHF 1.6310GBP/ZAR 11.091GBP/JPY 141.03EUR/USD 1.3307Early in the day yesterday, worse than expected UK Purchasing Managers index data caused the pound to fall. Mainly this was against the US Dollar and other currencies. Against the Euro, concerns about Greece's parlous fiscal health sent the euro lower against a range of currencies. We ended up the day close to €1.14 which is where it started. This is the best GBP to Euro rate we have seen for 6 weeks.

Concerns about how Greece will fund its large debt is continuing to cause weakness in the Euro. Without this, the pound to Euro rate would actually be a bit lower.

Political Uncertainty
That's a phrase you are going …

Sterling to Euro & US Dollar forecast

Pound vs Euro
Over the past week we have seen a steady positive movement for the Sterling-Euro currency pairing. This morning we're near €1.14 which is the best it's been for some time.

With the bullish behaviour exhibited by the Pound, Euro prices rose 1.8% from the lows to highs of the week. Starting the week with bad news for Sterling was the data released stating that the number of home loans weakened during this last quarter. This suggests the expectation that the Bank Of England and Monetary Policy Committee are likely to remain dovish in outlook, maintaining their current currency policy throughout the second quarter as the economy continues it’s protracted recovery.

The final revision of GDP for the 4th quarter on Tuesday coupled with data for the House Price Index; saw better results than in previous forecasts. This aided the Pounds’s ascent against all major currencies, only slowing slightly on Wednesday as Germany announced a contraction in unemployment figures.


This weeks data that can affect exchange rates

This Weeks Data
Tuesday & Wednesday
We had an interest rate decision for Australia this morning. Rates rose to 4.25% as expected. This afternoon we have the FOMC minutes from the US. These are a clear guide to the future US interest rate policy, and so can affect the value of USD. This evening there is a measure of UK confidence from the Nationwide. high level of consumer confidence stimulates economic expansion while a low level drives to economic downturn.

Tomorrow the EU release Gross Domestic Product data. GDP is considered as a broad measure of the Eurozone economic activity and health and the figures often cause volatility for the Euro. Producer Prices from Germany and the EU are also released Wednesday, so discuss the impact of this with your account manager if you need to buy or sell euros.

Thursday & Friday
A big day for Sterling. First thing Thursday we see Industrial and Manufacturing production. Then the BoE will announce their decision on interest Rates. We expe…

Sterling hits 1 month high against Euro

Good Morning. The pound rose to its strongest against the dollar in nearly two weeks, extending its rally for a fourth successive day after data on Tuesday showed an upward revision in UK economic growth for the last quarter of 2009. Sterling also rose against the Euro to a 1 month high, as unemployment in the EU was higher than expected. Rates this morning:

GBP/EUR 1.1284
GBP/USD 1.5242
GBP/AUD 1.6587
GBP/NZD 2.1561
GBP/CAD 1.5400
GBP/CHF 1.6031
GBP/JPY 142.63
GBP/ZAR 11.066
EUR/USD 1.3506

Sterling's gains
The pound has rallied since late last week, clawing back after being knocked more than 6 percent lower against the dollar in the first quarter, its biggest slide since late 2008. Sterling hit a one-month high against the euro on Wednesday as traders covered extreme short positions in the UK currency, which was also supported by a spate of positive economic data from the previous day.

Bets the pound will depreciate further were driven by concerns about the UK election expected in May. Many…