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Latest on the currency markets – you may just need a broker

Read the latest market information with regards to currency from SGM-FX. If you are involved with exchanging currencies, purchasing abroad or just sending money home then this affects you.

 GBP £

Some upbeat news came out yesterday in the form of comments from BoE governor Mervyn King.  He stated that he doesn’t think the BoE will look to add any more quantitative easing as they feel the economy is starting to show very positive signs of growth and they also believe inflation is starting to slowdown.

Other good news was the CBI retails sales report which came in at zero. This may not sound very positive but the fact is the month before the figure was at minus 2, so this month’s figure represents an improvement. The figure itself shows the volume of goods ordered for that month and also the total value of goods sold – as the UK economy depends heavily on the retail sector this is actually pretty good news.

The pound came very close to breaking the big 1.60 level against the dollar yesterday but failed to break through the 1.5999 level.  There’s a lot of resistance built up at that level but if the market continues to trade as it does then we feel it won’t be long before we’re back up there trying to break that ceiling.

What does this mean for you?

A stronger sterling represents a great time to be transferring funds overseas. We are now close to the psychologically important barriers, of 1.2000 against the Euro and 1.6000 against USD.  If you have a purchase to make abroad we are approaching a good time to buy, if we are not there already.

USD $

Despite the drop in the dollar overnight we had a very interesting piece of data from the states in the form of the US consumer confidence number which was weaker than expected.

The reading came out at 70.02 vs. 71.6 from the previous month. Although the data was not near the market expectations it’s still the only negative figure to come out of the states for this month, two FED governors jumped all over this to state that they felt the future outlook was looking weaker than predicated – one argument for saying this is that they possibly don’t want to overhype the US recovery.

Today shows the release of US durable goods which consensus believes will be better than expected with the huge purchases this month for aircraft goods.

What does this mean for you?

If you are purchasing USD to buy aircraft we are now approaching levels that would make a purchase all the more attractive. We have been involved in the purchase of many aircraft and feel that in the current climate a purchase at a level of 1.58 and above represents excellent value.

EUR €

In Europe the ongoing talk about debt seems to headline at least once or twice a week and yesterday there were more talks surrounding the firewall debt structure as Portugal bond yields started to shorten and there were fears that Portugal will need to go cap in hand this year to the IMF and the ECB.

This might not be the case as the firewall is being prepared and certainly billed as a way to solve the “cap in hand” trend which started two and half years ago by giving everyone access to the massive pool of funds with no questions asked. This money won’t have to be repaid until 2015.

There is a small figure out this morning M3 money supply due out at 9.30 GMT.

What does this mean for you?

It means that now could be a good time to be buying your Euros. This could be a great political tool for the Eurozone as any problems will initially be hidden as countries are able to keep their borrowing volumes quiet using the new firewall fund. If this works well, the confidence in the Eurozone recovery will grow in the short term and the rate could be much lower very soon.

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

Call us on +44   (0)20 7220 1740

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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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