Daily Archives: June 21, 2012
UK Retail Sales on the Rise as Eurozone Ministers Meet to Discuss Spain & Greece
Eurozone finance ministers were meeting today, to discuss a bailout for Spains banks and the future of Greece’s two rescue packages. The resolution of these issues is, in my opinioin, key to the long-term stability of the EU and the single currency. The markets have been dogged by uncertainty over recent months, as the economic stranglehold tightened around Europe and investors ran for cover as first Greece, then Portugal, Ireland, Italy and Spain were plunged into debt and their economies contracted, as unemployment rose and growth forecasts were cut.
What investors now need to see is a real fiscal startegy put in place, that will assist with long-term economic growth in the region, whilst finding the right balance with the necessary austerity measures. If this resolution can be found, then I do believe we could see the start of a euro fight back against both GBP and the USD. What to me has become very aparent is that all those waiting for 1.3o on GBP/EUR, should be prepared to be dissapointed.
GBP/EUR rates have pushed back through 1.24 this afternoon and at time of writing were sitting at 1.2427, up over a quater of a cent since the start of this mornings trading. This spike could well have had something to do with the release of todays UK retail sales, which showed an unexpexted rise of 1.4% in May. This increase has led to optimism here on our own shores that the retail sector may finally be ready to show some consistent improvement, which will ultimately be a huge boost to our economy and to sterling.
GBP has fallen off against the USD this afternoon, as the positive sentiment surroundiong Greece and Europe is seemingly having a knock on effect. Investors may well of seen the news as a reason to be hopeful that the global economy is picking up and that will entice them to be slightly riskier with their assets and move money away from the ‘safe haven’ dollar and into riskier currencies, that may provide the opportunity for higher yields.
If you have an upcoming currency requirement or would like to be kept up to date with all the latest market movements and key economic data, then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
With the Greek government finally forming a coalition will market confidence increase? Forecasts for USD, AUD, NZD and ZAR
As news emerged yesterday that Greece has managed to form a new coalition government, will this lead to an increase in market confidence? Personally I think yes. The new conservative led government headed by Antonis Samaras officially took power on Wednesday ending weeks of uncertainty that has rattled financial markets and I believe this may now lead to an increase in investor confidence and a potential drive towards the so called ‘risky’ currencies.
This could be good news for those selling currencies such as the AUD, NZD or ZAR as I personally believe investor demand and risk appetite for these currencies is likely to increase and hence their value will increase. I would expect GBP/AUD to fall towards 1.52 territory, HBP/NZD 1.95 and GBP/ZAR 12.85. As a result we may also see a move away from the relative safe haven of the US dollar and I can see the cable rate continuing towards 1.60 and EUR/USD towards 1.28. Should you have a currency requirement involving any of these pairings and you would like to discuss my thoughts in more detail then please email Mike at mgv@currencies.co.uk
Cable rates also fall as the FED say no to ‘QE3′
GBP/USD rates fell yesterday as the Federal Reserve decided against launching the much anticipated ‘QE3′ as many analysts had expected. Instead the US government has decided to extend ‘Operation Twist’ a bond buying programme aimed at lowering long term rates and to stimulate growth. This gave the dollar a small boost in yesterdays afternoon session, rates have continued in this manner this morning – although for the reasons I have mentioned above I still feel a move towards 1.60 likely.
As my colleague Daniel mentioned below, the aim of this blog is to give an independent and impartial view on recent market trends and current market conditions. We are also here to help individuals and corporate clients alike achieve the best market price when buying currency. The process could not be simpler and we pride ourselves in achieving top market prices for our clients. Daniel has given a very simple breakdown of the service below however should you wish to speak with me to run through the service in full then I can be reached on mgv@currencies.co.uk or by calling 01494 787478
