Sterling surged overnight against the US dollar to hit $1.67/£1 as GDP figures for the 1st Quarter of 2011 revealed that the UK’s economy expanded by 0.5% - boosted by a surge in activity from the service industry – and markets reacted to Fed Chairman Ben Bernanke’s comments on US monetary policy. Sterling had fallen against both the euro and US dollar ahead of the results as many investors expected the figures to disappoint. Key sectors of the economy, such as manufacturing and services grew at a healthy pace, recording progress of 1.1 and 0.9 percent respectively. Business services and finance expanded by 1.0 percent, the best reading since 2007. Most BoE policymakers want to see a sustainable recovery before tightening monetary policy, meaning interest rates are likely to stay at record lows at least until July despite inflation running at twice the bank's 2 percent target. Call in now for a live exchange rate.

In the euro zone, the euro strengthened against the US dollar after data showed that European industrial orders gained for a fifth consecutive month in February and the US dollar retreated ahead of the Federal Reserve’s interest rate meeting. Greek bond yields have soared this month on speculation that Athens may have to restructure its 327 billion euro (289.6 billion pound) sovereign debt by choosing one or more of several options: extending maturities, lowering interest rates, or cutting the principal. Call in now to ensure that you don’t lose out.

The US dollar plummeted against the euro and after the Federal Reserve’s meeting yesterday evening in which it signalled that it would hold interest rates steady to support the U.S economy after its bond-buying program expires in June. The signals to keep monetary policy loose saw investors dump the US dollar and flock to gold, which hit a fresh record high. The Fed will now probably wait until 2012 to announce sales of mortgage or Treasury securities that it bought to provide stimulus to the economy. Out later today there is GDP data and unemployment figures – GDP is expected to show a drop on last month so there could be some significant volatility.

Elsewhere, the Australian dollar climbed to a record high versus the dollar as consumer prices gained the most since 2006, increasing speculation that the Reserve Bank of Australia will resume its interest rate increases that have been on hold for several months. In addition, the Japanese yen slipped against the euro and the Australian dollar after rating agency Standard and Poor's cut Japan's credit rating outlook to negative from stable, citing the earthquake’s impact on already shaky public finances.

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Sterling fell against the euro yesterday, hit by broad euro strength and investor concern ahead of today’s GDP figures that are released at 9:30am. Last quarter’s GDP was a disappointment, and many analysts are not expecting GDP for the first quarter of 2011 to beat expectations. A weaker than expected growth figure would also see sterling’s strength against the US dollar crumble after enjoying the highest levels against the currency since December 2009 in the last week. On the other hand, a better than expected number will see expectations of an interest rate hike surge. Ensure that you don’t lose out by calling in for a live exchange rate.

In the euro zone, the euro strengthened following a strong Spanish bond auction. The euro had suffered earlier in the day after comments from European Central Bank President Jean-Claude Trichet saw investors cut euro holdings in favour of the US dollar. The President stated that there was a need for a strong US dollar, but the euro soon gained back ground. It is a quiet day for data today in the euro zone, but given the magnitude of US and UK data, there is likely to be significant movement so call in now for a live exchange rate.

In the USA, the U.S. dollar eased against the euro as investors bet the U.S. Federal Reserve will keep its loose monetary policy in place today’s meeting later this evening. Many investors feel that the US dollar will remain under pressure as the Federal Reserve is far more reluctant to tighten its policy any time soon – contrast this to the ECB that has already begun to raise interest rates, and is expected to raise rates twice more before the end of the year. Fed Chairman Ben Bernanke also speaks at the first ever post-rate decision press conference, so his comments will be closely watched for any deviation from the official statement. Ensure you speak to one of the team sooner rather than later.

Elsewhere, investors piled into currencies including the New Zealand dollar as the world’s major central banks pushed down the yen. New Zealand’s consumer price inflation accelerated to 4.5 percent in the first quarter of this year and the Australian dollar was up 0.3 percent against the US dollar, close to the 29-year high it hit on Monday. It had earlier fallen as commodities edged lower.

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Sterling finished last week strongly, hitting a 16 month high against the US dollar after UK retail sales gained more than had been expected. The figures were expected to show a 0.5% drop on the month, but came in showing a 0.2% increase which helped support the pound. Growth concerns still remain though, and Martin Weale (a member of the Bank of England that has been voting for a rate increase since January) said that the 1st Quarter had been “disappointing”. It is a quiet week in the UK with a 2nd long weekend only days away, but there is some key data released that could see some serious movement. Today we have CBI industrial trends which are expected to show that the economy is rebalancing towards manufacturing and exports and then GDP data tomorrow. Call in now for a live exchange rate to ensure that you don’t lose out.

In the euro zone, the euro suffered slightly last week following concerns over the need to restructure periphery debt and it fell after ECB President Jean-Claude Trichet stated that a strong US dollar is in the interests of the USA – a move seen by some to “talk up” the US dollar and take the pressure off his own overbought currency. This week is quiet for European data, but thin holiday trading could see some sharp moves so ensure you are prepared.

In the USA, the US dollar plummeted against sterling on Friday and is itself set for a potentially busy week. Wednesday sees the Federal Reserve’s interest rate decision and post-decision press conference. The Fed is widely expected to announce the scheduled conclusion of “QE2” (the $600bn second round of Quantitative Easing that has been in place) in June. Any divergence from this – i.e. an extension of the programme or even fresh Quantitative Easing could see US dollar weakness.

Elsewhere, silver markets fell in Asian overnight trading and Asian shares pulled back from recent highs ahead of the Federal Reserve’s meeting this week. This spread to the gold and crude oil market as traders wait to see whether the Fed will make any sweeping changes to monetary policy.


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Sterling weakened by 1% yesterday to against the euro after minutes from the Bank of England’s last meeting showed policymakers were concerned over economic growth, with no change in the voting pattern on last month. The committee voted 6-3 in favour of keeping rates on hold citing that data over the previous month had “probably been to the downside”. Markets pushed back expectations of an interest rate rise to later in the year, which was the main driver of sterling’s fall. The next major piece of data is retail sales which are released later today, so call in now for a live exchange rate to avoid losing out – especially given the light trading ahead of the Easter break.

In the euro zone, the euro hit a 15 month high against a weak US dollar gaining 1.4% due to high risk appetite and a better than expected bond auction from Spain which was welcomed warmly by investors. Business activity data also showed that Germany and France continue to outperform the rest of the region, helping to support European Bank rate hike expectations in the short term. Ensure you speak to one of the team to avoid missing out.

The US dollar fell against sterling and the euro, despite the fact that US stocks jumped on Wednesday as optimism about the economic recovery rose on a wave of strong earnings and profit outlooks. With the Bank of Japan and U.S. Federal Reserve expected to keep their monetary policy ultra-loose for the time being, the US dollar and Japanese yen have become the currencies of choice for the carry trade - the strategy of use cheap loans to fund investments in higher yielding assets. In addition, a weaker US dollar tends to boost the attractiveness of commodities, which are mostly priced in the U.S. currency. Home sales came in better than expected – out today we have unemployment claims, so call in for a live price.

Elsewhere the Australian dollar extended gains against the U.S. dollar and rose to a fresh high yesterday amid rising risk appetite. Thailand increased the one-day bond purchase rate for the third time this year which strengthened the Thai bhat by 0.3% against the dollar.

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Sterling slipped marginally against the euro yesterday as traders adjusted positions ahead of the Easter break and the euro recovered from a 1% loss against sterling on Monday. The pound was up 0.3% against the US dollar as bets on an interest rate hike by the Bank of England were up ahead of today’s Bank of England minutes. Sterling has traded in a range between $1.60 and $1.64 for two and a half months as investors speculate whether more Bank of England officials will vote for monetary tightening to contain inflation. The minutes are released at 9:30am so ensure you don’t lose out by speaking to a trader as soon as possible.

In the euro zone, solid data in the region helped the euro recover against both sterling and the US dollar after the worst day in 5 months on Monday. Concerns over Greece remain and should keep the single currency under some pressure with Germany not expecting Greece to make it through the summer without defaulting. There have also been concerns that Greece’s deteriorating public finances will cause a dangerous domino effect causing banks to collapse, threatening the viability of the single currency. Call in now for a live exchange rate.

In the USA, Monday’s credit rating outlook downgrade has seen capital being shifted away from the US towards other markets, with concerns over fiscal consolidation leaving the UK as a more attractive proposition. The UK government has come under fire for its tough programme of spending cuts, but these finally seem to be being recognised by the financial markets. The USA and euro have suffered in the past few days as a result of concerns over the lack of similar measures in these regions. There is home sales data released today so call in now for a live exchange rate.

Elsewhere, the Japanese yen gained across the board due to concerns over sovereign debt problems in Europe and the US that has seen investors steer clear of ‘carry trades’ (i.e. where investors borrow cheap yen and invest in higher yielding currencies). In addition, the Canadian dollar performed well against the US dollar, gaining by 0.7%.

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Sterling strengthened against both the euro and US dollar yesterday as a US credit rating outlook downgrade damaged the US dollar and fears over Greek sovereign debt hurt the euro. Sterling could remain under pressure though as markets push back expectations of a rate hike in the UK – there had been an expectation of a 0.25% rise as early as next month but unexpectedly low inflation figures put the dampeners on this last week. Out later this week there is the Bank of England minutes and retail sales – both of which could cause significant volatility given the low volume of trade ahead of the long Easter weekend. Call in now to ensure you don’t lose out.

In the euro zone, the Greek government denied any suggestion it will need to restructure its loans but the governor of the country's central bank fanned the flames by warning of a shrinking economy. Worries that Finland would cause problems in the bailout of Portugal also hurt the single currency after an anti-euro party was given a voice in parliament. Finland requires a majority parliamentary vote regarding requests for EU bailout funds. Call in now for a live exchange rate as we have a wide array of purchasing data released today.

In the USA, credit rating agency Standard & Poor's announced a downgrade for the outlook of US government debt. S&P cut the outlook for sovereign debt to negative from stable due to risks from the country's growing deficit. The announcement pushed sterling to a high of $1.6329/£1, but sterling is constrained around this level until the Bank of England starts to increase exchange rates. We have building permit figures out today, so ensure that you don’t lose out.

Elsewhere, fears over stubborn inflation saw China increase interest rates once again yesterday in order to control the economy’s rapid expansion. The banking reserve requirement ratio was increased by 0.5% to 20.5%, to be put in effect from 21 April. We also have the release of South Africa’s inflation data on Wednesday. This will give investors a clear idea of how much high to lift interest rates and could see volatility if there is an unexpected figure.

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Sterling strengthened on Friday against the euro as the single currency was hurt by concerns over periphery debt, with suggestions that Greece would need to restructure its debt. The euro’s losses were limited, as expectations remained that the European Central Bank would keep raising interest rates at a faster rate than the UK. This week sees the start of a run of public holidays in the UK, so liquidity and volatility is likely to be less than it has been. One major piece of data released this week is the Bank of England’s minutes from their recent meeting. With a sudden dip in inflation, many are expecting the minutes to show that the Bank will keep interest rates lower for longer. Call in now for a live exchange rate.

In the euro zone, the euro fell this morning against the US dollar as markets grew uneasy over a Finnish election. Voters in the country handed an anti-euro party a key position in parliament which left markets concerned that Finland could use its right to vote on EU bailout funds to slow down requests to shore up debt in Portugal. With fresh concerns over Greece and now issues with Finland, we could see the euro falter. Call in now to ensure that you don’t lose out.

In the USA, better US data on Friday failed to help the US dollar despite stronger stock markets and lower bond yields – both of which would normally see a stronger US dollar. Markets seem to have taken the view that the Federal Reserve will not be touching monetary policy for some time and that growth in the country will remain slow. It is a relatively quiet week this week, but low liquidity could see some large swings if anything does happen.

Elsewhere, the New Zealand dollar fell after lower than expected inflation data reduced the chance of a resumption of the central bank’s interest hikes. In addition, the Japanese yen fell to a 2 ½ year low against the Australian dollar on expectations that the Bank of Japan would lag behind other central banks on interest rate rises.

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Difficult week for sterling. Following lower than expected inflation data sterling hit a five and half month low against the euro. The reason for the fall in inflation was food prices falling by 1.4% as the supermarkets came under pressure and reduced prices. Other data was mixed. Unemployment fell to 2.48 million but benefit claims went up. Exports increased and the trade deficit narrowed which are again positive. Although the Nationwide consumer confidence survey showed an improvement it still remains at historically low levels. The real problem for sterling is that expectations of increased interest rates are being pushed back. Call in for the latest information and rate.

The euro is still the favoured currency between sterling, the US$ and the euro. As well as hitting a high against sterling it hit a 15 month high against the US$. The major support is the likelihood of further increased interest rates following last weeks 0.25% increase. Also countries such as China are diversifying their reserves of foreign currency with the euro being a major beneficiary. But let’s not forget the problem with government debt. However you try and present it €80 billion is not an insignificant amount of debt that the European Central Bank has to fund as part of the Portuguese bail out. Call in now to take advantage of euros strength.

The US$ continues to suffer as we see no end to the Federal Reserves ultra loose monetary policy. One step forward was the cut of US$38 billion to the government budget for the next six months. A small step given the size of US government spend but at least a start. Sterling continues to hold above the US$1.60/£1 level which is an important support.

Commodity backed currencies continue to gain against the US$ with the Australian dollar hitting a 29 year high. The yen is under pressure as import costs rise, industry falters given the infra structure problems arising from the earthquake and tsunami and the low yen interest rates.

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Sterling fell to a 5 ½ month low against the euro yesterday as investors bet that UK interest rate rises would lag behind those in the euro zone. The pound was flat against the US dollar as a mixed set of unemployment figures failed to support the UK currency. Figures showed that the number of people unemployed fell to 2.48 million with the unemployment rate beating expectations to show 7.8%. Any optimism was offset by the fact that the number of benefits claimants increased, and wage growth remained subdued. It is a quiet day for data releases, but a Bank of England member is speaking which could cause some movement so ensure you don’t miss out.

Euro strength saw the single currency hit a high of €1.1205/£1 yesterday as investors priced in a 50% chance of an interest rate hike by the ECB in both August and September. Against the US dollar, the euro hit a 15 month high of $1.4521/ £1 as global risk aversion subsided and investors sought higher yielding currencies. Data is thin on the ground again today, but with currencies volatile off the back of interest rate speculation, ensure you do not miss out and speak to one of the team today.

In the USA, the Federal Reserve’s loose monetary policy has seen the currency suffer against the euro. Analysts expect both sterling and the US dollar to underperform in the coming weeks, which should see little movement on the currency pair. Beyond that, the US dollar is expected to recover so ensure you take advantage of higher sterling/ US dollar rates whilst you can.

Elsewhere, the Swedish krona strengthened as the government boosted its economic forecasts. The Chinese yuan reached a 17 year high after suspicions that the government may raise the bank’s reserve ratio. The Japanese yen weakened as risk appetite returned following this week’s second earthquake aftershocks.

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Sterling hit a low of €1.1233/ £1 against the euro yesterday as inflation figures came in lower than expected which left investors questioning the prospects for an interest hike in the UK. This has widely been regarded as a positive though, as the UK needs inward investment from overseas in order to get back on track. A weak pound will help achieve this aim and as such, this should be seen as a positive. Figures released yesterday showed that UK exports had increased and the trade deficit had narrowed – all good news for the economy. Released today, we have UK unemployment figures so call in now for a live exchange rate.

The euro rose to a new 5 ½ month high against sterling in early trading this morning, as the outlook for interest rates in the UK and euro zone continues to diverge. Many analysts expect further hikes from the ECB – possibly before the Bank of England and as such this has drawn demand for the euro. The euro dropped slightly against the US dollar for a second day as the IMF European Commission met in Lisbon to discuss the €80bn bailout of Portugal. Industrial production figures are released later so ensure you are protected.

Against the US dollar sterling hit a low of $1.6227/£1 - off a 15-month high hit last week of $1.6430 - following the drop in UK Consumer Price Inflation. There is a wide array of retail sales data released today in the USA, so call in to ensure that you do not lose out if the markets move against you.

The Japanese yen, US dollar and Swiss franc strengthened after more earthquakes shook buildings in Japan and after the country raised the nuclear severity rating that began last month, reviving demand for the safer haven assets. The Australian dollar fell the most in almost four weeks against the yen as Asian stocks slumped, damping demand for higher-yielding assets. Call in now for a live exchange rate.

To request a up-to-the minute quotation, call 0845 638 0571 or (+44 207 898 0500 from outside the UK) or fill out our quote form: http://www.smartcurrencybusiness.com/quote1.htm

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Sterling hit a 5 ½ month low against the euro in early trading yesterday on expectations that interest rates in the euro zone would continue to rise at faster rate than in the UK. The pound dropped to €1.1287/ £1 early on, but staged a slight recovery on speculation that today’s inflation figures will come in higher and provide some impetus for the Bank of England to raise interest rates following the European Central Bank’s 0.25% rate rise last week. Investors have pushed back expectations of a UK rate hike to August following poor figures and downbeat comments from key policymakers. March’s inflation data is released at 9:30am, so call in now to ensure you take advantage of any movements.

In the euro zone, the euro stayed close to highs against sterling and the US dollar yesterday as markets priced in another interest rate hike in the region in July. However, the euro fell slightly against the US dollar, after hitting a 15 month high of $1.4489/ €1 on Friday following a near government ‘shutdown’ in the USA. This week, the members of the European Commission hope to convene with all of Portugal’s political parties to address the rescue programme prior to the upcoming elections on 5 June. Portugal is the third Eurozone country to receive a multi- billion euro bailout along side Greece and Ireland, but there has been little effect on the euro exchange rate. Released later today there are economic sentiment figures, so call in to avoid any adverse market movements.

In the USA, the US dollar recovered following Friday’s steep losses as Republicans and Democrats agreed a deal to avoid government shut down. They also decided to cut $38bn in spending for the remaining six months of this financial year. Several key members of the Federal Reserve are set to talk later this week and we could see some change to the current loose monetary policy, so call in and speak to a trader now.

Elsewhere, China’s exports and imports showed much stronger figures than expected, not showing any impact from the Japanese earthquake and tsunami. Any better than expected Chinese data generally sees the Australian dollar strengthen as China imports large amounts of commodities from Down Under. As a result, the Australian Dollar hit a new 29 year high of $1.058 against the US dollar.

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Sterling hit a 5 ½ month low against the euro in early trading this morning on expectations that interest rates in the euro zone would continue to rise at faster rate than in the UK. The European Central Bank last week raised interest rates by 0.25% and the Bank of England kept rates on hold for the 25th consecutive month. Despite the structural issues in the euro zone, the euro is a higher yielding currency than sterling and as such offers more return to investors. In terms of the week ahead, the UK focus will be on tomorrow’s CPI inflation figures. Inflation has been way above the Bank’s 2% target for some time now, so it will remain to be seen whether inflation starts to fall off as the Bank expects. Call in now for a live exchange rate.

In the euro zone, the impact of the Portuguese bailout has so far seen no knock-on to other European countries. In stark contrast to the bailouts of Ireland and Greece, other ‘periphery’ countries have seen improving borrowing costs. Essentially, Portugal is seen as relatively irrelevant on the European scale and so the fate of the economy will not necessarily unduly impact on others in the region. Either way, the euro is likely to remain strong against sterling. Call in now to ensure you are protecting yourself effectively.

In the USA, the US dollar remains weak as a result of interest rate expectations. The Federal Reserve has been very muted with regards to the possibility of scaling back the country’s Quantitative Easing programme and for now, the UK looks likely to increase rates much sooner than the USA, and sterling is seeing the benefits. Inflation data is expected to show an increase, but this is unlikely to see any change in the Fed’s position. Call in now for a live price.

Elsewhere, the same cannot be said for China, who will be releasing a wide array of data on Friday. Consumer inflation is set to rise to 5.4% in March and GDP could see a similar jump. As a result, the Chinese authorities are expected to continue to raise interest rates in the coming months following last week’s 0.25% interest rate hike.

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The Bank of England did as expected and kept interest rates on hold for the 25th month in a row. Now we wait for the Bank of England minutes to find out their view on the UK economy and how the members of the Monetary Policy committee voted on interest rates. Following the announcement sterling gained a bit of ground but has slipped back against the euro this morning. Call in for the latest rate.

The real news was happening in Europe. The European Central Bank did increase interest rates by 0.25% which was very much as expected. But the comment made as this was announced was that it was a finely balanced decision given the problems in the periphery states [e.g. Greece, Ireland and Portugal] and it was made clear that no decision had been made to make further increases in the coming months. So the market has taken the view that an increase in May is unlikely which makes sense. Elsewhere Portugal formally asked the ECB to help with a bail out. Long time coming and no surprise to anyone and had very little effect on the euro. Now to Spain where the interest they have to pay on further fund raisings will be very closely watched. At the moment the markets think the likelihood or need for any bail out is small but we wait and see.

The US$ lost ground as oil prices continue to rise. There is an inverse relationship between the two at the moment. Sterling pushed through the US$1.63/£1 level. Also deadlock has been reached for the coming years budget. A government shut down looks ever more likely.

Elsewhere the commodity backed currencies continue to hold their own following China’s increase in their interest rates at the start of the week.

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Interest rate day. The Bank of England are expected to keep interest rates on hold whereas the European Central Bank are expected to increase rates by 0.25% as they view inflation as their top priority. Any different from these and the markets will be very surprised. Here in the UK we had the release of disappointing industrial output figures which showed it falling by 1.2% in February when compared to January. Year on year it increased by 2.4%. The previous day we had had better than expected service data which highlights how mixed the UL recovery is. If you want to reduce your risk call in now as come lunchtime we could be seeing some very unpredictable movements in exchange rates.

Portugal has done the inevitable and asked for a bailout from the ECB. Not before time is how the markets view it. Given it was clearly expected the effect on the euro has been minimal. Now we wait and see if Spain is the next domino to fall. The market view is that this is unlikely given the steps that the Spanish have taken to sort themselves out but given the extent of the problems this could be wishful thinking in the medium to longer term. So if you are selling euros now may be a very good time to do this.

The US$ went to 14 month low against the euro. The expectation of increasing interest rate differentials supported the euro as it is unlikely the US will increase their interest rates any time soon. The US also has the possibility of government shut down as agreement can’t be reached on the next budget. Not a disaster in its own right as it has happened before but with debt reaching extreme levels it does seem time for the US to get their house in order.

Australian unemployment continues to fall hitting 4.9% which given their flooding and Japans earthquake and tsunami shows a degree of robustness for the Australian economy.

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Sterling benefitted from some better economic data here in the UK and negative sentiment elsewhere. Here in the UK we saw the release of a better than expected figure for the services purchasing managers index. This rose to a 13 month high in March. As services are such a key part of the UK economy the market reacted positively and sterling gained across the board. We will have to see if this increase in the index results in an actual increase in the size of the UK economy for the first quarter of 2011. One good day shouldn’t be taken as a change in sterling’s fortune and as such you should call in to get latest rates and the detailed thoughts of a trader.

Portugal’s debt was downgraded further and Spain’s unemployment increased to 4.3 million. So not a good day for the periphery states of the euro zone. The main topic of discussion is tomorrow’s interest rate announcement by the European Central Bank – 0.25% is the expected increase. No increase will see the euro lose ground; an increase greater than 0.25% will see the euro gain. So we could be in for some rapid movements in exchange rates as events remain unfold. Call in now.

The minutes of the last Federal Reserve meeting were released and weren’t quite as bullish on the ending of quantitative easing and increasing interest rates as expected. Also the US service activity data released didn’t meet expectations. These were negative for the US$. But overall the US economy is moving forward with reasonable momentum. Housing sales is still the one area that is showing significant problems.

The Chinese increased interest rates by 0.25% as they continued to try and control the growth in their economy and curb inflation. Neither of these will be easy to achieve and increased Chinese interest rates negatively affect the commodity backed currencies. The Australian dollar pulled back from a 29 year high against the US$.

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A steady start to the week for sterling gaining slightly against the euro and the US$. A survey by the British Chamber of Commerce highlighted the fragility of the UK economic recovery with cash flow and price pressures being key constraints. The good news was that export activity continued to be strong. The oil price, in sterling terms, has reached a record level which is another pressure on the UK economy; businesses and consumers will suffer. Sterling is under pressure and will remain so for the time being – get in touch for the latest information and prices.

Yield on Portuguese debt is approaching 10%. Clearly unsustainable and the expectation is that a bail out must come sometime soon. However the problem is that there is an interim government in place in Portugal which makes any decision making very difficult. The effect on the euro is minimal as the market awaits the European Central Bank meeting on Thursday and the expected 0.25% rise in interest rates. This is the reason for euros strength against sterling and the US$. So don’t expect the euro to weaken any time soon – call in now to get the latest price.

As mentioned the rhetoric has changed in the US with talk of the need for an exit strategy from the programme of ultra loose monetary policy [quantitative easing and low interest rates]. But there are still concerns about the robustness of the US economic recovery. Call in now for the latest rate.

The Australian dollar has hit a 29 year high against the US$. The main driver seems to be the use of the Australian dollar in the carried trade [where a low yielding currency funds the purchase of a high yielding currency]. The opposite effect is that the yen is losing ground. Call in now for an update and the latest rates.

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Will this be a better week for sterling? Probably not. The Bank of England meets this week and the expectation is for interest rates to be kept on hold as the Monetary Policy Committee wait to see how the UK economy is being affected by the Governments austerity cuts. Economic data to be released this week are producer price inflation figures which are expected to show increasing input costs and industrial production for February which is forecast to show an annualised increase of 4.3%. So don’t expect sterling to show a resurgence against the euro and the commodity backed currencies this week. In fact the trend seems to be for further weakening. So get in touch now to get the latest and prices.

The euro seems to be the markets favourite at the moment despite the Irish having to increase their banks bailout funds yet again and Portugal on the edge of requiring a bailout. The reason for this is that the European Central Bank are expected at this weeks meeting to increase interest rates by 0.25%, The reason for this is their desire to fight inflation which is too high. Economic data released this week by Germany, the engine of euro zone growth, are industrial production and industrial orders which are both expected to be positive. Call in now for the latest prices.

US economic rhetoric has changed quite dramatically as their economy seems to be moving forward and unemployment falling. Talk of further quantitative easing seems to be replaced by talk of increasing interest rates. Minutes of the last Federal Reserve meeting are released this week and will make for interest reading to see if there was any discussion about an exit strategy. But lets not get our expectations too high as the problems in the US are still extensive. Prices are holding around the US$1.60/£1 level so call in now to avoid disappointment.

The commodity backed currencies continued their strong run and have seen significant gains against sterling following the rise in risk appetite as markets stabilised following the Japanese earthquake and tsunami. This week the Australian Reserve Bank meet and are expected to keep interest rates on hold as their economy continues to recover from the floods they experienced earlier this year.

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Sterling fell to a 5 month low against the euro yesterday as euro-region inflation data left investors betting that the European Central Bank will raise interest rates before the Bank of England. Expectations have been that the ECB will start hiking rates in April, and yesterday’s data cemented this. Analysts now feel that the euro could test last October’s highs of 1.11/£1 against sterling as sentiment improves towards peripheral European countries and UK data disappoints. Against the US dollar sterling hit a high of $1.6152/£1, the strongest since March 24, boosted by data that showed house prices unexpectedly increased. Out today we have manufacturing sector activity data, so call in now for a live exchange rate to ensure that you don’t miss out.

The euro performed well against other currencies on Thursday, after inflation data essentially confirmed rumours that the European Central Bank would raise interest rates in its next meeting. The euro reached a ten month high against the yen of ¥117.90/€1, the highest since May 2010. Analysts feel that the euro will stay strong in the short term, but towards the end of the year it should return to more normal levels. Out later today, there is European unemployment data, so call in now for a live exchange rate.

The US dollar rose to a three-week high of 83.21 yen before running into selling by Japanese banks and foreign players. This return to more ‘normal’ levels of strength is a sign that the panic from the recent earthquake/ tsunami is beginning to die down. Following comments earlier in the week regarding US monetary policy from senior US officials, the prospects of higher interest rates in the US mean that Japan and the USA’s interest rates are likely to take very different paths. Out later today, we have key US unemployment figures in the form of non-farm payrolls which could see significant volatility.

Elsewhere, following a stress test of Irish banks yesterday, it was revealed that Ireland needs €70bn to protect its banks from future shocks. The government promised a radical overhaul of the sector and promised a radical overhaul of the sector. Call in for a live exchange rate.

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