Sterling lost ground as worries over the UK recovery were to the fore. The only currency that seemed to have a worse day was the US$ as concerns over their debt requirements grew.

We are open until 3pm today so please feel free to get in touch. We then are back for business on Tuesday 4th January.

So we end the year with sterling having gained a bit of ground against the euro , close to where we started the year against the US$ and having lost a lot of ground against the commodity backed currencies. I expect 2011 to be very similar.

I wish you all the very best and have a wonderful 2011

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling gained a little bit of ground across the board. The US$ suffered from worries over the level of its funding requirements over the coming year as yields on US government bonds continued to increase. There are also concerns about the Euro zone funding requirements for January over what demand there will be and what yields will be demanded by the market for government bonds from the periphery countries such as Spain. The total funding requirement for the Euro zone is put at €815 billion for the coming year which is clearly a very large and significant amount which highlights why January will be such a critical month in setting expectations for the rest of the year.

As highlighted yesterday the festive period means that market activity is a lot less than normal. The trouble with this is that transactions that normally have limited effect can result in rapid and significant movements and that is why it is important to minimise the downside risk and maximise the upside potential by getting in touch today.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

We are in a quiet period with little news and low trading volumes as most sensible people make the most of the festive period. Sterling has lost a little bit of ground against the euro and the US$. But it is against the commodity backed currencies that the biggest change has happened with sterling losing significant ground on Tuesday. This was a surprise given that China had raised their interest rates over the weekend which is usually a negative for commodity backed currencies as it signals an effort by the Chinese Government to “manage” the rapid growth of their economy.

As trading volumes are low markets can move very quickly, as we have seen with the commodity backed currencies, and that is why it is so important to get in touch as early as possible to minimise downside risk.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

In our last Daily Currency Note before Christmas, sterling fell to a 3 month low against the US dollar after a downward revision to the UK’s growth figures for the 3rd Quarter reminded investors how fragile the road ahead is for the UK economy. Figures showed that against an initial estimate of 0.8%, GDP for June to September grew by 0.7% and in thin trading conditions ahead of Christmas, losses on sterling were exacerbated. However, the Bank of England’s minutes showed that policy makers were growing more and more concerned about inflation and as such the possibility of tighter monetary policy in 2011 kept the pound supported. Today is the last day of data, with some mortgage approval figures for the UK – whilst it is Christmas, there is still significant movement possible so call in now for a live exchange rate. We are open for trading until 2pm on Christmas Eve…

In the Euro zone, the euro has seen some strength today after it became clear that China had been buying large amounts of euros to hold in reserve but it still came under pressure on warnings over credit rating downgrades. In particular, a newspaper report in Portugal suggested that Portuguese debt had been bought heavily by the Chinese government. China’s central bank declined to comment though. It is looking like an interesting year ahead for the euro, with European bonds likely to be the big talking point – currently each country issues its own debt, and there has been talk of a centralised ‘Euro-bond’ to help stabilise the region.

In the USA, global stock markets gained yesterday following increased optimism over global economic growth, whilst the euro hit an all time low against the Swiss franc. The US dollar gained after GDP amendments showed that US GDP for the 3rd Quarter came in a touch better than had been initially estimated. With the Christmas trading very thin, the US dollar moves were exaggerated. Call in now if you need to buy currency in the next few days as there is scope for significant movement as a result of lower trading volumes.

Aside from that, let me (and all the team here at Smart Currency Exchange) wish you and your family a very Merry Christmas and extend our best wishes for a prosperous 2011.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling hit a 3 month low against the US dollar yesterday as public borrowing figures came in far worse than expected and called into question whether the government can meet its deficit cutting target. Net borrowing by the government was at a record £22.8bn for November – up on last year’s £16.7bn and way above forecasts of £17bn. The Treasury maintained that the UK was on track to eliminate the budget deficit over the next four years, but sterling dropped to $1.5450/£1 – the lowest since September – as traders and investors questioned whether the government would achieve this target. Out today, we have the Bank of England’s meeting minutes and final GDP figures. Given the woeful borrowing figures, any changes to the Bank’s rhetoric could see some serious movement, so make sure you speak to one of the team now to avoid losing out.

In the eurozone, despite an initial surge against the US dollar after positive comments from China saw traders move to minimise losses, the euro fell against the US dollar yesterday as debt crisis concerns persisted. Credit rating agency Moody’s warned that it may downgrade debt-stricken Portugal’s rating in a review that could take 3 months. Spain sold nearly €4bn of bonds without too much hassle, but the dark cloud of the debt crisis is hanging over the region and is likely to last well into next year. Unfortunately, given the exposure of many UK banks this will not have the positive impact on the sterling/ euro price that many would expect so make sure you assess next year’s budgeted exchange rates sooner rather than later.

In the USA, the US dollar faltered slightly against the euro after the Chinese Vice Premier stated that China had invested a large portion of its foreign currency reserves in euros and a turning point for the euro was near. However, risk aversion soon took over and with concerns over the European debt crisis; UK borrowing data; and many looking for safe currencies for the festive period – the US dollar strengthened. In terms of data, there is some housing data released today which will be followed closely.

Elsewhere, the Australian dollar is currently trading at a 25 year high against sterling so if you are moving Aussie dollars into sterling, now is a great time to look at securing rates for the New Year and minimising losses for 2011.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling gained against the euro yesterday as the single currency was hampered by euro zone debt crisis worries, but sterling’s gains were limited to 0.3% as concerns over the UK’s exposure to the crisis held the pound back. Overall price movement was limited as many investors stick to the sidelines until the first week of January and with the Bank of England reporting that UK banks will remain vulnerable to the European debt crisis into the new year, many traders are waiting until after the festive period to look at their options. Sterling vs euro is likely to suffer over fears of exposure, so it is one of the big issues to keep an eye on heading into 2011. The Confederation of British Industry cut its UK growth forecast for the first quarter of next year to 0.2%. It seems that sterling will have a tough start to the year, so ensure you speak to one of the team sooner rather than later to ensure you do not lose out.

In the eurozone, the single currency fell to all time lows against the Swiss franc and Australian dollar as investors worried about the debt crisis and further credit rating downgrades. To an extent, many investors are simply ‘shutting up shop’ for the next two weeks by moving their investments into safer currencies or assets such as gold or bonds. Gold crept higher for the second day running. In terms of data, the euro wasn’t helped by consumer confidence and manufacturing inflation figures that both came in slightly lower than expected.

In the USA, it was a very quiet day for data releases and today is no different. Most movement has come from trading related to concerns over the eurozone debt. This saw the traditional ‘flight to safety’ with investors buying US dollars as a safe haven asset. In addition, with the S&P 500 stock market up 5% on the month, traders were hesitant to buy stocks ahead of a potential correction. Released today, there is potentially a report from the US Treasury on currency, which could see some movement so call in now for a live exchange rate.

Elsewhere, traders were watching the situation in North Korea closely after South Korea performed a live firing exercise over the weekend. Hints of retaliation added to nervous traders and helped strengthen the US dollar.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling hit a 3 month low against the US dollar on Friday after Lloyds Banking Group warned that it was making further provisions for losses on Irish debt that it is exposed to. This exacerbated concerns over the UK’s exposure to Ireland’s debt crisis and saw investors selling sterling. UK consumer confidence figures were much worse than expected, showing the lowest figures since the depths of the recession and giving an idea of the worries felt ahead of the impact of the government’s spending cuts. Coming into the Christmas week, economic releases are few and far between with the only real data of interest being the Bank of England’s meeting minutes from the last interest rate policy meeting on Wednesday. Call in now for a live exchange rate.

In the euro zone, the euro strengthened against sterling on Friday after particularly strong German business sentiment data contrasted with the poor UK data that was released. The calendar is very thin this week with no data releases of real note aside from some European consumer confidence and German Producer inflation data – both released today. The Irish debt crisis is still causing issues and with lower trading volumes expected over the next few days there is scope for quite sharp moves on the currency markets, so call in now for a live exchange rate.

In the USA, stronger than expected data at the back end of last week kept the upward pressure on for the US dollar as manufacturing and industrial production figures bucked expectations. Again, it is a very quiet week for data releases in the run up to Christmas and the week after will be no different. One thing to look out for though is sharp moves in the exchange rate as a result of low volumes of trade. Call in now and allow us to keep an eye on things for you.

Elsewhere, this week sees interest rate policy meetings in both Poland and Korea – both of which are expected to keep rates on hold. Get in touch whilst it is quiet to discuss next year’s currency requirements and discuss how Smart Currency can help manage your exchange rate risks.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling climbed against the US dollar and euro yesterday after UK retail sales data for October was revised upwards and inflation expectations continued to rise. November retail figures came in slightly lower than was expected, but consumer inflation expectations showed that many expect nearly 4% inflation in the coming months. Having dropped by 1.5% against the US dollar on Wednesday, sterling recovered but many analysts believe that a recovery above $1.57/£1 will simply see profit taking and as such sterling is likely to remain in a tight range against the US dollar. The inflation figures will put the Bank of England in a tough position, with soaring inflation and higher than expected unemployment figures. There is uncertainty about the impact of the austerity measures on growth, so the New Year is going to be interesting on that front.

In the Euro zone, the euro fell against the other major currencies as the European Summit of European ministers got underway. The aim is to resolve deep divisions amongst euro member states over the best way to resolve the debt crisis and avoid further countries from requiring bailouts. Germany has been keen to avoid footing the bill for anymore bailouts and until resolution is found, there is likely to be a lot of concern still. Spain held a bond auction and had to pay higher interest rates than last time after credit rating agency Moody’s stated that it would amend its outlook for the country’s debt. Call in for a live exchange rate.

In the USA, the US dollar gained against the euro and yen yesterday after a report unexpectedly showed a jump in factory activity in the Mid-Atlantic region. Bond yields rose as investors looked elsewhere for returns on the news that suggested the US economy is recovering at a better rate than initially expected. Call in now for a live exchange rate.

Elsewhere, the Australian dollar seemed to be the only thing performing well down under as their cricket team collapsed to 268 all out against England in the third test of the Ashes in Perth. Sterling has remained under the $1.58/£1 for several days, so call in now for a live exchange rate and to avoid losing out.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling fell to a 12 day low against the US dollar yesterday after UK jobs data came in much weaker than expected. Many felt that this drop points towards a shaky recovery in the coming months, and with uncertainty over the impact of a 2.5% VAT hike and austerity measures, many investors pulled out of sterling positions. Despite figures from the Confederation of British Industry that showed retail sales had grown at the fastest pace for 8 years, the markets focused on data that showed that the number of Britons out of work rose for the first time in half a year with the unemployment rate hitting 7.9%. Out later today, there is retail sales data and the Bank of England’s Adam Posen speaks to the Institute of Directors so get in touch now for a live exchange rate.

In the Euro zone, the euro came under renewed pressure yesterday as worries persisted over the debt crisis in the region. The euro fell by 0.9% against the US dollar to hit a low of $1.3250/ €1after US credit rating agency Moody’s announced that it had put Spain’s Aa1 credit rating on review citing mounting debt and 2011 borrowing requirement. Today sees the start of the EU Economic summit, which is likely to be watched closely to find some sort of direction and long term plan to deal with the European debt crisis, so call in now and speak to one of the team about forward contracts and hedging.

In the USA, the US dollar started the day strongly after receiving a boost from data that showed a steady recovery in New York State’s manufacturing sector. Month on month consumer price inflation came in at 0.1% against an expectation of 0.2% which further supported the Federal Reserve’s recent move to pump an additional $600bn into the US economy to kick start the flagging recovery. Today we have further manufacturing data and US weekly unemployment claims.

Elsewhere, China and the USA have agreed to improve cooperation on issues ranging from trade to investment and finance. There has been a potential currency war brewing between the two countries over China’s use of a fixed exchange rate that artificially keeps Chinese goods cheap – much to the anger of many Americans who want to see manufacturing recover in the USA. This marks a first step to resolving these concerns.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling dropped from 3 week highs against the US dollar yesterday after strong US figures helped boost the US dollar. UK inflation came in at 3.3% - the highest for 6 months – and the 11th consecutive month that it has been more than 1% higher than the Bank of England’s 2% target level. With GDP growth higher than trend and inflation persistently above targets, analysts now feel that there is only a small chance that the Bank of England would embark on a further round of Quantitative Easing, with many talking about the prospect of interest rate hikes early next year. With a VAT hike to 20% in the coming weeks, and a report released yesterday that suggested retailers would use the price rise as a smokescreen to increase prices beyond the 2.5% level, there are concerns that inflation will jump next year. You would expect sterling to strengthen as a result, but large selling of sterling by one Australian dollar buyer and thin trading volumes saw the pound drop. In the long run, yesterday was great news for the UK – especially given the USA has embarked on a 2nd round of QE and the Euro zone is in such a mess.

In the Euro zone, the euro slipped against the US dollar following the stronger than expected US retail sales figures. The euro started the week at $1.32/1 before hitting a high of $1.35/1 early on Tuesday and slipping back on the US figures. The focus revolved on the US economic situation and whether the Federal Reserve would add to the additional $600bn of asset purchases. Economic sentiment in Germany was stronger than expected yesterday also – call in now for a live exchange rate.

In the USA, retail sales and producer price data came in far better than expected which gave the US dollar a welcome boost after falling on Monday to lows against counterparts. Figures showed that core retail sales jumped to 1.2% on last months 0.8% increase and producer prices rose by 0.8% against an expectation of 0.6%. Business inventories – i.e. the amount of goods being stocked – also fell, which indicates that the US recovery may be accelerating. Released today, there is US inflation data. Last month showed 0.0% change, so the figures will be quite interesting – call in now for a live exchange rate.

Elsewhere, the Australian dollar strengthened beyond the 1:1 level against the US dollar after the price of oil rose. Now is a great time to be moving Australian dollars into sterling or US dollars so call in now for a live exchange rate.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Currency Exchange Comments for the International Trade Industry

Sterling hit a 3 week high against the US dollar yesterday; gaining nearly 2 cents from earlier lows after concerns hit the US economy that left investors selling the US dollar. At the start of the day, sterling dropped after a weak housing survey and downbeat comments by Deputy Governor of the Bank of England Charles Bean. Figures from housing website Rightmove showed that asking prices for houses had fallen by 3.0% in the last month. Lower mortgage approval rates and economic uncertainty were cited as the major factors. Deputy Governor Bean stated that the Bank of England would still look to use additional Quantitative Easing if UK growth slowed or if the Euro zone debt crisis had an adverse effect on the UK economy. Key data released today is UK consumer price inflation. This is the major indicator being used to assess whether further QE is needed. As such, there is likely to be some volatility, so call in for a live exchange rate and to discuss your options.

In the Euro zone, the euro received a welcome boost as strong demand from Eastern Europe and Latin American countries helped the single currency post 1.5% gains against its US counterpart. Ahead of a key Federal Reserve meeting today and a meeting of European ministers later in the week, buying volumes were much lower, which can see the market move a lot more than normal. Debt in the region is still a huge concern, with the expectation that Portugal and Spain will soon follow Ireland and Greece down the path of a bailout. Out today there is key German consumer sentiment data that is likely to be at odds with the general assessment of the region as a whole. Call in now for a live exchange rate.

In the USA, the US dollar fell broadly as credit rating agency Moody’s stated that last week’s extension of Bush-era tax breaks could push the US budget deficit to levels that would see the agency rethink their outlook on the USA’s AAA credit rating. The impact of the extension of the tax breaks was positive with growth expectations being revised upwards and stock markets performing well. However, this would essentially be driven by government debt – hence the concern. This is likely to develop further, so speak to one of the team now about buying at the right time. Later today, there is the first meeting of the Federal Reserve since adding $600bn to the US economy.

Elsewhere, despite inflation of above 5%, China is expected to raise interest rates only twice in 2011 according to a poll by Reuters with a 25 basis point rise by the end of 2010. The language used in Sunday’s policy statement was interpreted by many that the Chinese government feels it has inflation under control currently.

Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling climbed against the euro on Friday after persistent ‘real money’ buying (i.e. physical purchase rather than speculative trades) saw sterling shrug off the fact that producer prices had dropped marginally. A large corporate account bought large amounts of sterling throughout the day, which also helped stabilise sterling against the US dollar. It is a relatively busy week for data with inflation, labour market and retail sales data all released over the coming days. Inflation is expected to remain above 3.2%, which will decrease the likelihood of further Quantitative Easing. Adam Posen is due to speak later in the week – he is currently the only advocate of pumping more money into the economy, so call in sooner rather than later to ensure you don’t lose money if the markets move adversely.

In the Euro zone, panic over the debt crisis has calmed slightly over the last week, with Ireland expected to put through the new budget legislation later today that will leave the country with the toughest budget for a number of years. A two tiered system has also begun to emerge, with the German economy seemingly on full throttle but towing the rest of Europe behind it. There is German economic sentiment released tomorrow and industrial and manufacturing figures later in the week, which are likely to send conflicting messages to already cautious investors so call in now for a live exchange rate.

In the USA, Tuesday sees the first meeting of the Federal Reserve since last month’s announcement of a second round of Quantitative Easing in what has since become known as “QE2”. The Fed announced an additional $600bn of monetary stimulus and there is likely to be no change this month as the Fed allows the impact of the additional purchases to take effect. In addition, there is inflation data released on Wednesday, so get in touch now to ensure you buy at the best rate.

Elsewhere, inflation shot up in China as figures released on Friday showed a reading of more than 5% against a figure of 4.4% last month. Markets have been braced for an interest rate hike, but this has not happened much to the confusion of some analysts, as from all accounts, China could be heading for a bubble. Call in now for a live exchange rate, as China’s movements have a far reaching impact.


Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Daily Currency Comments 10/12/10

Sterling slipped against the US dollar yesterday after worries over the single currency and euro zone debt crisis brought the pound down against a stronger US dollar. There was no reaction from sterling prices as the Bank of England kept interest rates and monetary policy on hold. Whilst this was widely expected, it was a credit rating downgrade in Ireland that dented sterling. Rating agency Fitch downgraded the credit rating of Ireland after they recently secured an 85bn euro bailout. The UK economy relies heavily upon the euro zone as a trading partner and as a result, issues in the region can impact prospects for the UK recovery. Sterling was not helped by details that showed that house prices fell 0.1% in the last month. Out later today, there is production data which could have a significant effect on sterling pricing.

In the Euro zone, the euro fell against the US dollar yesterday following the rating downgrade and also on the news that one of the Irish political parties would vote against the emergency European bailout for the country. Euro fell by around 0.5% against the US dollar to hit a low of $1.3169/€1 on the day. In terms of data there was nothing of note – today sees French and Italian industrial production figures so get in touch for a live exchange rate.

In the USA, a larger than expected decline in the number of claims for unemployment helped bolster the view that the economic recovery is gaining traction. The recent extension of tax breaks has left many expecting a growth boost as consumers and businesses spend additional disposable income. However, some analysts feel that this extension is de facto Quantitative Easing and will add to the deficit and cause more pain in the long term. In terms of data, today sees the US trade balance figures which could see some significant volatility – call in now and speak to one of the team to protect yourself.

Elsewhere, a survey by the Bank of Japan is expected to show that confidence amongst Japanese firms fell for the first time in 7 quarters as the strong yen has left international prospects uncertain. Call in now for a live exchange rate.


Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Daily Currency Comments 09/12/10

Sterling hit a 2 week high against the US dollar yesterday after industrial order data showed that the UK recovery is gaining momentum. Sterling also saw some strength against the euro as concerns over the European debt crisis continued to blight the single currency. Sterling hit a high of $1.5834/£1 and closed the day above €1.19/£1 after hitting a high of €1.1954/£1 earlier in the day. A survey by the Confederation of British Industry showed that industrial orders unexpectedly jumped to -3, which is the highest level since June 2008 as export orders hit a 15 year high as the impact of the weaker pound filtered through. If UK data continues to impress, we may see sterling break out of being stuck between the US dollar and euro and begin to make headway against both currencies at the same time. Out today we have the Bank of England’s interest rate decision – seen by many as a non-event given the low probability of any change to policy. Speak to one of the team for a live exchange rate.

In the Euro zone, the single currency continued to suffer as a result of the debt crisis, with many investors uncertain as to how far it would spread. Ireland did move a step closer to gaining access to bailout funds as the Irish parliament voted in favour of the toughest budget on record in the first round vote. Any strength that the euro sees following an approval of the budget is likely to be short lived according to many analysts, so call in to speak to one of the team and ensure you buy at the best time.

In the USA, following the extension of tax breaks by President Obama on Monday; financial markets feel much more positive about the prospects for the US recovery. The tax breaks are expected to encourage growth, as businesses and individuals spend their additional disposable income and give a boost to the economy. Released today, there is the weekly US unemployment claimant count. Last week saw a bizarre drop in the number of new jobs created so the markets will be keeping a close eye later today.

Elsewhere, a key advisor to the Chinese central bank believes that the USA is in a worse state than Europe. Speaking at a financial forum n Beijing, Li Daokui stated that for the next 2 years, the US dollar will be a safe investment, but as the Euro zone situation stabilises, the US will come under scrutiny assets will experience serious declines.


Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Daily Currency Comments 08/12/10

Sterling hit the highest level against the US dollar for 2 weeks yesterday as better than expected UK manufacturing figures and a strong GDP estimate helped point towards a continued economic recovery. Manufacturing figures showed that output rose by 0.6% in October – double what was expected. In addition, data from the National Institute for Social and Economic Research estimated that the UK had grown by 0.6% in the 3 months to November. In a bizarre coincidence of the “0.6’s”, sterling finished the day up 0.6% against the US dollar at just over $1.58/£1 as the figures detracted from the possibility of further Quantitative Easing. There is house price data and CBI order expectation figures released today so call in now for a live price.

In the Euro zone, optimism that the Irish parliament would approve the emergency budget saw the euro recover recent losses against the US dollar in early trading. However, when Irish Finance Minister Brian Lenihan began his presentation, the euro began to slide again. The budget sets out plans to cut €6bn of spending out of an economy that is still reeling from a prolonged recession. Whilst the Irish budget may alleviate some political concerns, European Finance Ministers failed to outline in any detail their plans to help stabilise European credit markets and avoid a wholesale collapse of the single currency. This is still the major market mover, so speak to one of the team about protecting yourself against currency risk.

In the USA, the US dollar started the day poorly as investors moved away from the safe haven currency as risk appetite improved. Buoyed by the renewal of tax breaks in the USA that were expected to stimulate spending in the economy and optimism over the Irish budget, investors looked elsewhere for higher yielding investments. US stock markets also performed well, but the US dollar gained against the euro after the Irish budget presentation started. It is a relatively quiet day on the data front, but there are some key Chinese figures released which could see some market volatility – ensure you don’t lose out.

Elsewhere, the boost in risk appetite saw emerging market currencies strengthen, with the Brazilian real and Chilean peso close to 2 month highs against the US dollar. Ensure you are adequately protected in the run up to Christmas and 2011 by talking to one of the currency specialists here at Smart sooner rather than later.


Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Daily Currency Comments 07/12/10

Sterling gained against a broadly weaker euro yesterday as investors focused on Euro zone debt woes with a meeting of European finance ministers taking place throughout the day. With sterling taking a back foot ahead of another meeting later today, in which ministers are expected to formally approve the Irish bailout plan, many analysts expect to see sterling take advantage of the poor euro sentiment. In the UK, the key event of the week is the Bank of England’s interest rate decision – announced on Thursday. The central Bank is not expected to make any changes to policy, and so investors are looking to industrial, trade and producer prices for direction on the UK economy this week. Out later today, we have manufacturing production data and (potentially) a GDP estimate for the last 3 months. With all the European focus, call in now to avoid losing out to a poor rate.

In the Euro zone, there was significant pressure on European finance ministers to increase the size of the EUR750bn emergency fund in order to avert a full blown debt crisis in the region. A report by the International Monetary Fund stated that there should be a larger emergency rescue fund in place to help future members that get into trouble. A measure of investor confidence in the Euro zone fell to 9.7 from 14. This was a far worse result than was expected, giving an idea of how much fear there is when it comes to investing in the Euro zone. The new Irish budget goes to the vote today too, so call in now to avoid missing out.

In the USA, the US dollar strengthened by 1.14% against the euro as fears over the debt crisis in the region saw investors by US dollars over the single currency. This came despite negative comments made by Federal Reserve chairman Ben Bernanke which could have had the opposite effect. In an interview on CBS-TV’s “60 minutes” late on Sunday night, the Fed chairman stated that it was possible that US policy makers could increase the amount of Quantitative Easing being pumped into the economy, despite adding an additional $600bn in the last meeting of the Federal Reserve. Speak to one of the team about minimising the risk of your payments increasing.

Elsewhere, the Dutch finance minister Jan Kees de Jager warned in an interview on Sunday that the markets would turn to other heavily indebted countries once focus moved from the Euro zone. He felt confused that countries such as Japan and the USA had similar if not worse problems than the Euro zone. An interesting stance… Watch this space to see what happens next.


Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Daily Currency Comments 06/12/10

Sterling rose against the US dollar on Friday afternoon after poor US employment figures saw the US currency weaken across the board. There were some concerns amongst investors over the UK banking sector’s exposure to the euro zone, but this is likely to be more of a story in the New Year. Data showed that UK services activity dropped marginally as expected. Many had hoped that it would show an improvement after surprisingly strong manufacturing activity data earlier in the week. It is another relatively busy week with the Bank of England’s interest rate decision on Thursday and monthly figures for industrial, trade and producer prices. Whilst the Bank is likely to keep rates on hold, there is likely to be further division between members. Call in now to speak to a member of the team about minimising your losses.

In the euro zone, it was an incredibly volatile week for euro zone government bonds. At one point, Portuguese and Italian bond yields hit record highs relative to German bonds – a measure of the additional ‘premium’ that these countries need to pay when borrowing from the markets. However, the European Central Bank started buying bonds in large numbers in order to reduce the risk and calm the volatility. There is likely to be further volatility in the coming months as investors look for a long term solution to the debt crisis in the region, rather than the current ‘damage limitation’ that seems to be taking place at the moment. Either way, speak to one of the team in order to protect yourself from further movements.

In the USA, Friday saw the release of the latest Non-Farm payroll figures – a seasonally adjusted measure of the number of jobs added to the economy in the previous month. The forecast was for an additional 172,000 jobs, and when the numbers showed only 39,000, investors were double checking the figure to ensure there hadn’t been an error given the figure was so low. Whilst there may be some kind of anomaly, it still leaves the door open to some potential US dollar weakness.

Elsewhere, the Australian dollar saw some strength after inflation data showed that the annual rate had jumped to 3.9% in the year to November. The rate is currently below $1.60/ £1, so if you have any Australian dollars to move into sterling, now is a relatively good time. Call in now for a live price.


Get a live quote and/or more information from Smart Currency at: http://www.smartinternationaltrade.co.uk/

Sterling fell against the euro yesterday after bond buying by the European Central Bank restored a level of confidence to investors. Sterling fell by 0.7% against the stronger single currency to drop back below the €1.18/£1 level. Against the US dollar, sterling finished the day hovering around the $1.56/£1 level after earlier hitting a low of $1.5514/£1 against the US currency. Earlier in the day, figures showed that UK construction sector activity unexpectedly picked up in November, but stayed near to an 8 month low meaning that the figures are unlikely to provide much of a boost to economic growth this quarter. Out today, there is monthly figures for service sector activity which could cause some movement. Call in now for a live exchange rate.

In the Euro zone, the bond markets settled yesterday after the European Central Bank stepped in to buy Irish and Portuguese bonds on the open market. This helped the countries, as this pushed yields down and therefore also pushed down the amount of interest that the respective governments would need to pay on the debt. Tuesday saw this figure spike to record highs for some countries, so the intervention of the central bank has helped calm the panic somewhat. In the ECB press conference, the central bank slowed the rate at which it will withdraw emergency funding. Out today, there is monthly retail sales data so speak to a member of the team today about managing your currency risk.

In the USA, the US dollar fell against the stronger euro following a volatile day on the currency markets. The US dollar fell by around 0.7% against the single currency following the ECB’s purchase of European bonds. News that the US unemployment claims rose by 26,000 this week did not help the US dollar either. Ahead of today’s key Non-Farm Payroll figures (released at 1.30pm) this is not the news that many wanted to hear and demonstrates the continued fragility of the US economy. Get in touch to minimise your risk if these figures disappoint.

Elsewhere, the South African rand strengthened by 2.2% against sterling yesterday after strong earnings forecasts from one of the country’s leading petrochemical manufacturers saw investors buy into the currency. It takes the notoriously volatile currency to ZAR10.71/£1 so if you have any rand requirements, now is the time to act to stop it dropping any further.


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Sterling slipped against a slightly stronger euro yesterday after investors held back on selling the single currency ahead of today’s European Central Bank interest rate policy meeting. Earlier in the day, sterling stopped just shy of the €1.20/£1 mark, hitting €1.1995/£1 as purchasing manager data for the UK manufacturing sector came in far better than expected. However, ahead of today’s ECB meeting, investors scaled back on the amount of ‘short positions’ (i.e. bets against the euro) in case the meeting revealed something that brought euro strength. The manufacturing data did help sterling recover some ground against the US dollar, reaching a daily high of $1.5649/£1 after dropping to a 2 month low of $1.5485/£1 on Tuesday. In terms of data released today, there is construction purchasing manager data which could cause similar movement, so get in touch now to ensure you don’t lose out.

In the Euro zone, there was a level of respite in the European bond markets yesterday which helped the euro recover some ground against sterling and US dollar. On Tuesday, bonds for ‘peripheral’ Euro zone countries (Spain, Portugal and Italy) took a veritable hammering as investors speculated that these countries would also need bailouts in the coming months. Despite this respite, many analysts still expect the euro to continue on a downward to trend against sterling, so if you are still holding euros with a view to moving them into sterling, now might be a good time to think about exchanging them.

In the USA, the US dollar fell by over 1% against the euro ahead of the ECB’s interest rate meeting today in which many analysts speculated that the European Bank would announce measures to prevent further bailouts from crippling the region. In addition, there were also rumours that the USA would help support the region with higher contributions to the International Monetary Fund. There is US unemployment figures released today, so call in now for a live exchange rate.

Elsewhere, the euro’s rise yesterday also saw other ‘high risk’ currencies post gains. The Australian dollar climbed by 0.6% against both the US dollar and sterling despite falling earlier in the day on poor economic figures. South African rand gained by 1.2% against sterling after similar risk


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Sterling climbed against the euro yesterday as concerns over sovereign debt in the euro zone continued to hamper the single currency. As a result, sterling broke the €1.19/ £1 barrier for the first time in around 2 months. The risk aversion that saw investors pull out of the single currency and into sterling also saw sterling lose ground against the US dollar, with sterling dropping to $1.5480/£1 for a time before levelling out at the $1.5530/£1 mark. The sterling/ US dollar rate is a real indicator of investors’ feelings towards risk and with Commerzbank forecasting a return to $1.52/£1 today in the short term, it is a far cry from the giddy heights of $1.6290/£1 that we saw on Bonfire night – just a few weeks ago. This kind of volatility demonstrates why you should be in touch to discuss forward contracts to protect against this kind of movement.

In the Euro zone, the euro plummeted to 10 week lows against the US dollar yesterday as the Irish bail out failed to dampen speculation over the need for further rescue packages in the region. The single currency dropped below $1.30/ €1 for the first time since September as worries over ‘contagion’ hammered the euro zone debt markets. Spain, Italy and Belgium’s cost of borrowing hit record highs yesterday, as many feared these countries would not be able to face their debt obligations. One analyst felt that this risk of default could spread to countries outside the euro zone as there are “no safe sovereign borrowers”. In terms of data, there is German retail sales figures released today, but these are likely to be insignificant in the grand scheme of things. Call in now for a live exchange rate.

In the USA, the US dollar continued to attract demand from risk adverse investors yesterday. The currency has been the ‘safe haven’ for those investors looking to avoid losses, with most buying US government bonds – traditionally one of the safest (but consequentially lowest yielding) investments globally. US data was positive yesterday, with consumer confidence and purchasing data both beating expectations. Out today, there is a wide range of data being released so call in now for a live price.

Elsewhere, the Japanese Ministry of Finance confirmed that it did not intervene in the currency markets between October 28th and November 26th. The Japanese government stepped in on September the 15th and sold $25bn worth of yen to bring the Japanese yen off 15 year highs against the US dollar and help make Japanese exports more competitive.


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