The currency markets over the past few weeks have been unbelievably volatile and we have seen the stronger performers (JPY,CHF) over the past few days moving up to 4% in a day as central banks attempt to devalue their currency as the pure strength is really causing them high troubles.
Japan for instance is having a horrible time with exports now, as the price against the USD has gone so far that the states are no longer buying in anywhere near as much as previously so companies, such as Toyota are struggling.
The Pound has also gained 7 cents against the New Zealand Dollar over the past week, 5 cents against the Australian Dollar and 4 cents against the Canadian Dollar however just the two against the Euro.
I start to ask myself is this the time that the Pound is starting to puff out its chest and become one of the harder currencies that investors are really looking at in the current market as a currency they can put their money into.
If only the Bank of England were talking rate hikes we could see a substantial gain for Sterling in the next few months against the majority of majors, but they still seem very wary of doing so, a big shame for those that buy supplies from overseas or are in the process of buying a property abroad.
Maybe we need to not kick ourselves when we are down so much, ok we do have problems in the U.K but in my view they are nowhere near as bad as our friends in Europe and allies across the pond in my opinion.
The next few weeks and months are going to be some of the most volatilie when it comes to currency I personally feel I will have ever seen – Apart from the GBP-AUD moving 20 cents in one day in October 2008!!
Be aware that if you have currency transfers to do you do not want to be in a position where you can be caught out, protect yourself from adverse market movements either with forward contracts, limit or stop orders.
Today is key for the pound and the Euro as we see key interest rate decisions for both the U.K and Europe and although no changes are expected all eyes will be on comments following the releases and surely the head of the ECB cannot continue to be confident and look at further interest rate hikes?? Who knows, we have been surprised many times before!
Do feel free to email me directly [email protected] should you wish to discuss any transfers you do have be it corporate or personal and being an expert in this field I will happily assist you in getting the best rate of exchange and putting together a plan for how to approach it.
Alternatively call me (Daniel Wright) directly on 01494 787 462 or fill in the enquiry form on the right hand side of this page.