Latest Market Report

Sterling Forecast for April 20 2009

UK Budget
All eyes will be on Alistair Darling this week as he announces his budget on Wednesday. With the UK facing possibly the most challenging economic situation ever recorded it will be interesting to see how Darling plans to pull the UK out of recession. It will be an unenviable task trying to offer the economy support while reassuring the markets that the UK will eventually return to full health. In my opinion he is unlikely to achieve either.

Roger Bootle, economic advisor to Deloitte believes that Darling will have to concede that the economy will contract sharper this year than original predictions and that next year’s recovery may also be weaker. With huge levels of debt and a recession looking likely to last longer than predicted the budget could possibly put further pressure on the Pound.

With interest rates in the UK now at the lowest levels in history leaving the Bank of England with very little room for manoeuvre and one of the largest budget deficits in the world it is unlikely to see investment pouring into the UK. This means it is very hard to see the pound continuing its positive run from last week which saw us hit a 3 month high against the dollar and a 6 week high against the Euro. So, if you have an upcoming currency requirement speak to one of our dedicated account manager today to discuss all the options open to you including a forward contract where, for a small deposit, you can fix your exchange rate at today’s prices for a time in the future protecting yourself from any possible market fluctuations.

Bank of England Minutes
Also released on Wednesday are the Bank of England minutes which could give the markets an insight into the thinking behind the Bank of England’s upcoming interest rate decisions and whether they are going to increase the current levels of quantitative easing. Again this could have a big impact on the exchange rates so ensure you keep in close contact with your account manager here at Foreign Currency Direct or if you do not already have an account you can open one for free with no obligation to trade here.

Euro
Comments from the Eurozone on Friday made for confusing reading as several members spoke out calling for further rate cuts but Axel Weber, the president of the Bundesbank and probably most influential member of the committee ruled out cutting rates below 1%. “He’s a Bundesbank president, he’s very influential,” said Nick Kounis, chief European economist at Fortis in Amsterdam, “I always see his remarks as a very good indication of what happens next.”

With a split opinion in the Eurozone it makes it even more difficult to predict what will happen in the currency markets over the coming weeks and months. Therefore, if you need to transfer money internationally it could be worth making the most of the current highs and by trading today avoiding any further uncertainties that may remain in the market.

Forex for Business
The UK recession continues to hinder companies on the high street as more redundancies were announced with Sony Ericsson cutting 2,000 jobs and Toshiba laying off 3,900 staff. As high street names continue to struggle it continues to put the global economy under further pressure with unemployment still rising and therefore spending levels falling. If your business is finding the current climate challenging then we at FX-Foreign Exchange may be able to save you money on your currency transfers.

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 us at FX-Foreign Exchange on Tel +44  (0) 1480 458400 for a personal consultation with a broker.