Foreign Exchange

The chancellor says that, for the first time since WWII, the world economy is expected to contract this year.

£20b increased in bank lending for mortgages this year.

Borrowing expected to be £275bn, some 12.5% of GBP

The Chancellor Mr Darling says that although our exports are falling, exports in Germany and other countries are falling more sharply.

Get all the latest new from the 2009 UK Budget on April 22 2009 live here.

Chancellor, Alistair Darling, will make his Budget statement to the House of Commons at 12.30 pm today. How will that effect your Foreign Exchange position.

Stay on this page for a sector by sector breakdown of how the Budget will effect you or your companies trading position.

GBP Foreign Exchange Rate Forecast Today 22nd April 2009

Sterling Strengthens but economists advise caution ahead of Today’s UK budget.

Many people seems to be cautious ahead of the UK budget where the government is expected to forecast the economy is shrinking at its fastest pace in sixty years with a 3-3.5% slowdown in the UK economy this year, far than the November forecast of 0.75-1.25 percent.

Chancellor, Alistair Darling, will make his Budget statement to the House of Commons at 12.30 pm today and this could bring with it one of the most volatile trading sessions we have seen for a long time. The budget can last up to five hours and as it only happens once a year it can be difficult to predict how sterling foreign exchange rates will react to the budget statement.

We also have the Bank of England  minutes out this morning which will give us an  indication as to their reasoning for the last interest rate decision and what their strategy may be to try and stabilise the UK economy.

Speaking  before parliament, the new Bank of England Monetary Policy Committee member Paul Fisher indicated further weakness in global economic demand could hold back UK growth.

“The major risks I am concerned about are that monetary accommodation does not have sufficient positive impact on demand that we miss the inflation target on the downside,”

He went on to imply the Bank of England will have to discuss seriously whether it needs to increase its quantitative easing programme.

If you are thinking to sell off or buy Sterling Today in the foreign exchange market, you would be well advised to stay in close contact with your broker throughout the day. Telephone  FX-Foreign Exchange on +44 (0) 1480.458400 for the latest market reports and trading foreign exchange rates.

At FX-Foreign Exchange we can  offer you forward contracts  for up to two years into the future to take the risk factor away from your foreign exchange purchase and this will give you peace of mind so you will know exactly how much your currency will achieve for you. Or if you are wanting to achieve a rate that is not quite there you can place a limit into a live market as your target level may be reached when the UK trading session is over as the American and Asian sessions are just opening and the currency markets are moving 24 hours a day.

UK DEFLATION

In other news Sterling showed little reaction to the inflation data out yesterday.

UK annual inflation measured by the Retail Prices Index went negative in March for the first time since 1960, to -0.4%, down from zero in February. RPI includes mortgage costs, which have fallen following the Bank of England’s reductions in interest rates.

The Consumer Prices Index fell in March to 2.9% after February’s unexpected rise to 3.2%, the Office for National Statistics said. The official CPI figure is still well above the government’s target of 2%.

EURO DATA

Germany’s ZEW economic sentiment index posted its first positive reading since July 2007, pointing to a possible pick-up in the nation’s economy in the second half of 2009.

The ZEW index, which measures the confidence in the financial markets, rose by 16.5 points from minus 3.5 points in March to 13 points in April. ZEW president Wolfgang Franz stated

“It is even becoming more likely that the economy will slowly recover in the second half of this year”

This may not be the best of news for anyone with a Euro requirement so with the extremely rare spikes arising in the market place at present you should open an account if you do not already have one so you can capitalise when a good buying opportunity does arise. please feel free to apply for an account here. It is totally free to set up and bares no obligation on your part.

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 .