Daily Archives: November 21, 2011
Below is an outline of some of the key data releases that could effect your up and coming currency convesion this week. Some of the main ones to look out for must be the Bank of England’s minutes out on Wednesday morning and the second estimate of Q3 GDP out the day after. Have a glance through the list and if you are concerned about how any specific data release may affect your conversion please feel free to contact me at email@example.com. I will then contact you to discuss the options that are available to you.
UK DATA THIS WEEK:
•Tuesday 09.30am Public borrowing for October, previously 14.138 bio
•Wednesday 09.30am Minutes of previous MPC meeting release (9/10 Nov)
•Wednesday 09.30am BBA mortgage approvals for October, previously at 33,130 k
•Thursday 09.30am 2nd estimate of Q3 GDP, previously at 0.5% q/q and 0.5% y/y
•Thursday 12.00 pm CBI Industrial trends for November, previously at -18
US DATA THIS WEEK:
•Monday 15.00pm Existing home sales for October, previously at 4.91 mio
•Tuesday 13.30pm 2nd estimate of Q3 GDP, previously at 2.5% q/q annualised
•Tuesday 19.00pm Minutes of prior FOMC meeting release (1/2 Nov)
•Wednesday 13.30pm Durable goods orders for October, previously at -0.6% m/m
•Wednesday 13.30pm Personal spending for October, previously at 0.6% m/m
•Wednesday 13.30pm Building permits for October, previously at 594k
•Wednesday 14.55pm Final University of Michigan for November, previously at 64.2
•Thursday – Thanksgiving
EU DATA THIS WEEK:
•Tuesday 16.00pm Flash consumer sentiment for November, previously at -19.9
•Wednesday 08.28am Flash German manufacturing PMI for November, previously at 49.1
•Wednesday 08.58am Flash manufacturing PMI for November, previously at 47.1
•Wednesday 10.00am Industrial new orders for September, previously 1.9% m/m
•Thursday 07.00am Final German Q3 GDP, previously at 0.5% q/q
•Thursday 09.00am German IFO business climate for November, previously at 106.4
•Thursday 09.00am German IFO current conditions for November, previously at 116.7
•Thursday 09.00am German IFO expectations for November, previously at 97
We have seen a decent spike for the pound over the last week or so against the southern hemisphere currencies. This morning sterling exchange rates are trading up at 1.5855 against the Aussie Dollar, 2.0960 against the Kiwi Dollar and 13.00 against the South African Rand.
However clients who need to buy AUD, NZD or ZAR need to be acutely aware of how the problems in the Eurozone are affecting your exchange rates.
Traditionally the higher rates of interest offered in these countries means that investors who are getting a poor return on their savings in areas such as the UK, the Eurozone and even the US buy significant volumes with the aim of holding them and benefiting from the greater interest paid out (known as carry trading) – supply and demand means that the more people looking to buy a currency the more expensive it gets – a trend we have seen since the financial crisis began 3 years ago and worldwide interest rates were slashed.
This trend is reversed when we see major political or economic upheaval as investors sell their Southern Hemisphere Currencies and repatriate their funds for a short period of time until things “settle down again” – this causes a huge drop in demand and we get an exchange rate spike such as we saw in the middle of August, the end of September and during November so far.
With Greece, Italy and Spain putting new Governments in place over the last week and things are again “settling down” I would expect to see demand for these high yielding currencies go up and hence exchange rates for sterling weaken slightly. Now by no means is this a science and there a huge number of other contributing factors but this is a pattern that we have seen time and time again – If you have a need for any of these currencies now may be a key time to secure your funds either on a spot or forward contract. Make sure you keep me aware on firstname.lastname@example.org so I can continue to act as your eyes and ears into the world’s most volatile market. Let me know what your requirement is and we can assess the markets and decide when may be a key time to secure your currency.