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Foreign Exchange Forecast for March 15 2009
The latest market report is shown below. There may be some supplementary information and links towards the end of the report.
If you have any questions on the content of this or any other report, you are welcome to email the author directly or contact your FX-Foreign Exchange representative to discuss the implications for your own transactions.
Exchange Rates
£/USD + 0.5% £/NZD + 1.4%
£/€ + 1% £/AUD + 0.8%
£/CAD - 0.4% £/ZAR + 0.75%
Sterling
Sterling continued its good run against a basket of major currencies on the day bringing buying levels against the Euro to the best levels in 6 weeks and against the greenback to a 9 week high. Should you be sending money overseas in the near future it is imperative you keep in contact with one of our experienced currency brokers particularly as market conditions are so volatile and can dramatically affect the cost of your money transfer - In the current climate sterling spikes have been few and far between call FX-Foreign Exchange today and open an account so you can secure your currency in one quick phone call or discuss the various options at our disposal as one of the UK’s largest FOREX Brokers, including the use of a Forward Contract, whereby for a small deposit we can secure your rates for up to 2 years in advance guaranteeing the price of your conversion.
Mortgage Lending on the up
On a fairly quiet day data wise sterling seemed to find support following a surprise increase in mortgage lending for the month of March according to the Council of Mortgage Lenders (CML). The number of mortgages handed out by lenders rose slightly in February but activity in the market remains weak. Loans for house purchases in February in the UK rose to 24,300, up by 4% compared with January.
But the group warned that activity in the market remained at a “very low level historically”.
And first-time buyers had to find a record typical deposit of 25%.
“We are not convinced that underlying trends have shifted sufficiently to change our forecasts for mortgage market activity in 2009, but there are some positive signs for later in the year,” said CML director general Michael Coogan. “Some large banks are making more funding available through enhanced lending commitments, which is helpful but will not satisfy consumer borrowing demand on its own.”
While the figures, which followed earlier data on mortgage approvals, suggested some lift for the housing market, it remains in stark contrast with recent years. The number of mortgages completed was running at about one-third of the average February total of 76,000 loans for house purchase between 2002 and 2007 and the CML also reported a 20% decline in the number of remortgaging deals, down from 44,000 in January to 35,000 in February. With the UK placing such a large influence on the property market data such as this inevitably will give sterling some short term support; however the question is will this continue? Contact one of our currency brokers to discuss the implications for your next currency conversion.
Bank Shares Rally
Lloyds Banking Group and Barclays rose more than 10% before falling back in afternoon trading following stronger than expected quarterly gains announced by Goldman Sachs yesterday. These results were very different from the previous quarter’s results when the bank announced its first loss since going public in 1999. However, despite its strong performance, the bank said trading conditions continued to be tough.
“We continue to be cautious about the near-term outlook for our businesses,” said chief financial officer David Viniar. The financial system still faces “extremely difficult macroeconomic conditions,” he added.
These positive results led to a boost in investor confidence that the worst maybe over for financial firms, however some analysts were quick to disagree.
“The Goldman figures are remarkably good, but bank results are mercurial and you have to pick through them carefully,” said Justin Urquhart Stewart at Seven Investment Management.
He believes the results from Goldman Sachs and Wells Fargo will not set the tone for upcoming results in general.
“It’s not going to be pretty reading on the corporate results front this quarter,” he said.
Data Releases
With a quiet week for data yesterday’s major release came from across the pond with US Retail Sales coming in below the expected level for the month of March and falling for the first time in two months. Following the release the USD lost ground to the tune of 0.3% against sterling and again, in my opinion, bringing about some good buying levels for the greenback.
The Commerce Department said total retail sales dropped 1.1 percent after rising 0.3 percent in February. March sales were weighed down by declining purchases for big-ticket items like motor vehicles and electronic goods.
“This throws some cold water on the idea that we’re carving out a bottom. As long as you have initial jobless claims running around 650,000 and getting revised higher week after week, I don’t see a recovery,” Jacob Oubina a currency strategist at Forex.com, Bedminster, New Jersey.
Figures like these will not be interpreted well around the world with the US being the largest economy negative data releases can have impact on the world’s economy. After a couple of positive months the US retailer appears to be holding back on their spending, should we see a similar pattern emerge within Europe and world I would expect a large deviation from the current exchange rates - with this in mind why not contact FX-Foreign Exchange to discuss the various tools at our disposal to safeguard your currency requirement and keep up to date through the use of our daily market report. Call now +44 (0) 1480.458400.
