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Book your currency in advance

With the markets ever changing and the economy still unstable, managing your money can save you a great deal – selling, buying or just getting your wages paid in the right currency can maximise your transfer value.

GBP £

Yesterday’s 4th quarter GDP revision showed the economy actually shrank an additional 0.1 percent. This coupled with the annual growth figure of just 0.5 percent had a significant negative impact.

Following a change in tone from BoE governor Mervyn King have raised the possibility of additional QE , this could lead to a loss of confidence in the UK economy and a continuing failure to rally higher against a newly faltering USD and still struggling Euro.

What does this mean for you?

This leaves markets on the fence as to trading patterns until a clearer direction is evident. The currency pairs with Sterling could become very volatile for a period of time. When uncertainty escalates your mindset should be entirely focused on protecting your bottom line. One hedging tool we use for this is forward purchasing. Booking your currency in advance at a rate that you’re happy with would mean you no longer have to worry about the fluctuations in the foreign exchange market.

USD $

Starting with yesterday’s data US durable goods orders were up 2.2 percent for February, however, this follows a revised decline of 3.6 percent for the previous month, this is the first real disappointing news from US data for some time, leading to a loss of confidence in the recovery and an increase in speculation that the economy could begin to falter.

Speculation in the markets surrounding portfolio adjustments and quarter end flows suggests that the USD will receive some short term support as we close in on the end of the first quarter.

What does this mean for you?

A potentially stronger Dollar is all the more likely due to the uncertainty in the market. If you need to buy USD we could be at the top end of the buyer’s market with a level of resistance around the 1.5880 mark, meaning now could be the right time, achieving a level around 1.5850 should be attractive in the current climate.

EUR €

European money supply data looked good on the surface of things when there was an announcement of 2.8 percent growth. However, digging a little deeper we can see that private loans, which is vitally important to economic recovery, came in at just 0.8 percent as bank lending remains very weak.

A lack of lending impacts smaller businesses as they struggle to invest in their business for growth. As I’m sure you’re aware a lack of funding for small businesses is part of a wider problem stagnating economic growth. The expected removal of red tape will help to cut costs and save time for these businesses but until lending picks up again these businesses will continue to struggle.

The scale of the bad debts in Spain is creating a nervous atmosphere after they were pressured to deny they were about to ask for bailout funds. However, the level of bad debts suggests that it is almost inevitable they will be forced in to a situation where they require additional support.

What does this mean for you?

Yet again the leading factor is uncertainty. This could prevent Sterling making headway against the Euro but I would expect – and have already seen today – a Dollar again against the Euro. If you need to sell Euro’s for USD, again, now could be the right time.

 

If you would like any further information or have any questions please contact:

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Morning Market Rates: (Please note: These are indication prices only, they are not offer rates)

GBP/USD: 1.5890

GBP/EUR: 1.1870

GBP/AUD: 1.5217

GBP/CHF: 1.4327

GBP/ZAR: 12.0759

GBP/JPY:  130.98

USD/JPY:  82.61

USD/ZAR: 7.5581

EUR/USD: 1.3310

EUR/ZAR:  10.1250

GBP/NZD: 1.9370

GBP/CAD: 1.5820

GBP/AED: 5.8235

 

 

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