Currency Market Update – Just what is going on worldwide and how may it affect your transfers
U.K – Sterling GBP
The Pound has had a strange few weeks, continuing to drop away against the Swiss Franc, New Zealand and Australian Dollar, yet gaining back some ground against the U.S Dollar and Euro.
Economic data from the U.K has not been terribly good however not terribly bad either of late compared to many others, the key would be for data to improve, spending cuts to appear to be working and investors to start believing that the Pound is a good currency to hold once again during these troubled times worldwide.
Europe - Euro
Well documented problems in the Euro Zone have led to a shaky time for the Euro of late, we have seen various credit rating agencies downgrading numerous countries, not to mention the ongoing problem with Greece that appear to be merely delayed rather than anywhere near fully rectified.
My opinion on the Euro is that I am merely waiting for big trouble to arise, this may not neccesarily mean that the pound will suddenly gain a huge amount of ground back due to the exposure the U.K has of these countries. I do however expect us to be higher than we are once the cracks start appearing again.
U.S .A – Dollar
The States also are having big issues and with GDP (Gross Domestic product) figures today being revised down it looks like a rocky road ahead. I would not be surprised to see the pound make some gains against the Dollar at times in the short term, however a saying on the market is that when the U.S sneezes the U.K catches a cold so do be a little wary that we could see a ripple effect head this way which in turn may hold back our recovery and hit us against most major currencies.
Australia -AUD
The Australian Dollar has had a good week following higher than expected inflation figures in Australia leading to the chance of rate cuts disappearing for now and the AUD holding firm below the 1.50 barrier.
Personally, at some point in the future I expect a major movement against the AUD much like what we saw in October 2008 as investors ruch to unwind carry trades and be ahead of the currency market movements, this could lead to a snowball effect and the AUD losing ground rapidly however recovery in the U.K may need to start showing decent signs of recovery first and foremost.
Swiss Franc – CHF
The Swiss Franc has still gone from strength to strength against the Pound and also still appears to be at the forefront of investors minds when looking for a safe haven currency. Surely this cannot continue and sooner or later the fact that Swiss exports will be so expensive it may bring them trouble further down the line. This once again brings back the hope that the Pound takes over the Swiss Franc as the safe haven of choice, and those with sky high Swiss Franc mortage costs can breath a small sigh of relief that things are going back in the right direction.
If you have an upcoming currency transaction to make, I can ensure you save money over using your bank or indeed your current broker. Please feel free to contact me by emaiing djw@currencies.co.uk or filling in the enquiry form on the right hand side of this page.
Have a great weekend!
Dan
I’m interested in your comments about the KIWI -
but sometimes you overlook this currency.
I wonder if it is going to take a major slide against the GBP?
Hi There,
It could well potentially do this at some point soon, however the Kiwi is going from strength to strength at the moment against the pound. I feel the real turn around will be when interest rates begin to rise in the U.K which may not be until next year now i’m afraid, however there will be some spikes in the short term I personally feel.
kind regards,
Dan