Foreign Exchange Catches a Cold
Yesterday’s Movements
Currency Pair Daily Movement
GBP/USD -0.2%
GBP/EUR +1.13%
The largest news on the markets is the outbreak of the deadly Swine Virus that is sweeping around the world from its origin in Mexico. This is having a devastating effect on the currency and stock markets as buyers are moving to currencies that are less likely to be affected. This in turn creates previously unexpected opportunities for both buyers and sellers to maximise currency exchanges.
Our currency exchange services provide a professional, efficient and cost-effective method for currency conversion. Our very personal service is suited to business users, needing to buy forex at the best currency exchange rates available, and for the private clients who wish to make a single money transfer, or regular payments such as overseas pension transfers. Call FX-Foreign Exchange now on +44 (0) 1480.458400 .
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Euro News
Due to its size the Euro zone was hit hard yesterday by the news of the deadly Swine Virus as investors try to move to safer currencies. The opportunity for buyers of the Euro was strengthened even more in the closing hours of yesterday following the European Monetary Fund’s speech. In that Ewald Nowotny, a council member at the ECB indicated that they would be willing to expand its range of policy tools if necessary to ease the flow of credit through the economy. Meaning they could start quantitative easing and continue to lower the ECB interest rate. A complete swift in what had been previously stated, this meant that we saw continual strength in the pound against the Euro yesterday, closing 1.13% higher than it started at the beginning of the day.
This is a welcome recovery after the dramatic loss in confidence last week of the pound as the UK Gross domestic product contracted by 1.9 per cent for the first quarter of 2009, the biggest contraction since 1979. This gives buyers a surprising opportunity to buy foreign currency, (EUROs) as it now stands only 2.5 cents away from the high of 2009.
USD Continues to Win
Sterling continued to lose strength against the dollar for the second day in a row, this after the former U.K. Treasury adviser Roger Bootle said Britain may be heading for a 1930s-type depression as house prices slump. U.K. house prices dropped for a 19th month in April, by a further 0.3 percent Hometrack Ltd. said in their report. This takes the decline in the past 12 months to 10.1 percent. In another report released yesterday by the British Bankers Association it was announced that 2,000 or 7% fewer loans were approved for house purchases in March from the previous month.
This gives short term opportunity for clients that are looking to sell USD currencies, as well as giving buyers of USD perhaps an insight into the potential future weakness in our position against the greenback. This follows the Chancellor of the Exchequer Alistair Darling who said in his budget report to Parliament last week that the economy will contract 3.5 percent this year and expand 1.25 percent in 2010, while the budget deficit reaches 12.4 percent of gross domestic product, the highest among the G20 nations.
In Other News - Mexico Peso Loses
Mexico’s Peso drops a staggering 5% due to both the outbreak of the deadly Swine Virus and an earth quake that reached 6.0 on the richter scale, showing that currency rates can change very quickly. So if you do have a requirement and are currently holding out for a better rate be sure to re evaluate your decision as at any time the markets could move against you.
Upcoming Financial Releases
With so much uncertainty, eyes will be fixed on up and coming economic reports including US Consumer confidence for April being released at 15:00 BST. This informs us of the level of confidence the US public has in the economy, a high level will give the greenback strength and a poorer than expected figure will give buyers an opportunity as the currency will be weakened.
Other reports this week include:
Wed 29th April 00:01BST UK GFK consumer Confidence for April
Wed 29th April 18.15BST United States FED interest rate decision (Currently at 0.25%)
Wed 29th April 18.15BST United States The Federal Open Market Committee meeting minutes
Wed 29th April 22:00BST New Zealand Reserve Bank of New Zealand Interest Rate decision
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