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By Alex Ellis

Sterling lost strength today as unemployment in the UK rose by 49,000 to total 2.5 Million people now unemployed across the country, currently 1 in 5 16-24 year olds is out of work. Only recently the Insitute of Public Policy Research stated that they believe there will be a double dip of job losses as job cuts take their toll in the coming months. We are beginning to see the primary effects of the budget cuts as economic growth is starting to slow and job losses are increasing, this will surely only get worse as the cuts become more prominent.

Eurozone debt focus has now fallen on Belgium – previously not considered one of the Pigs of Europe, the economy has now become in the spotlight owing to growing debt concerns. Currently their debt equals a whole years worth of GDP and their banking sector is weak (they required a bailout in 2008/9) and are heavily weighed down by other countries debt, most notably Greece, Portugal and Ireland.

If this becomes important in the news over the coming weeks then I would expect that Euro exchange rates would weaken as a result and the pound would gain, however UK retail sales are due out on Friday and I would predict that this will cause weakness for the pound.

By Alex Ellis

There are two releases this morning which could add to the speculation of an interest rate hike this morning both of which are released at 09:30 (AM).  The first, Consumer Price Index also known as the cost of living index, measures the change in price of a fixed set of products and services. This includes housing, electricty, food and transportation and is considered one of the main inflationary measures. Sterling has benefited recently from speculation of an upcoming interest rate hike owing to the rising inflation and therefore if inflation is shown to have risen following this release then I would expect specualtion to either increase or decrease.

The second release is the Retail Price Index, this measures the change in price of a fixed basket of goods from a typical supermarket shop and includes dairy products and the like. This again is seen as a good measure of inflation and therefore the two releases together could help to drive the market if seen as encouraging an interest rate hike.

Every week there are a number of economic data releases that can drive exchange rates and therefore if you do have an upcoming currency exchange then by employing the services of a currency broker we can ensure that you are well informed before committing to any exchange rate.

By Alex Ellis

Sterling has restarted its rally this morning as speculation of an interest rate rise continues to drive the market, meanwhile the threat of debt problems within the euro zone have only helped to bolster the pound. Currently the UK’s inflation is at 3.3%, so is well above the Bank of England’s target of 2% and the prediction is that now VAT has risen to 20% the figure will fast approach the 4% mark. The only way to combat inflation is to raise interest rates but with the economy still very fragile the danger is this may damage the recovery.

It will be interesting to see what CPI figures are released at tomorrow as these show the current inflation levels, if there is any indication that the Bank of England are raising interest rates then I think we may see further movement for the pound. Current levels are around closing in on being the best for the last four months and therefore if you are looking to conduct a currency exchange now is a sensible time to consider exchanging.

Using a currency brokerage can save you up to 4% compared to your bank and they are able to offer a number of tools and contract options which will help to protect your position, in order to find out more information please contact us.

By Alex Ellis

The Euro has rallied somewhat against sterling this morning in the aftermath of Wednesday’s and Tuesday’s bond auctions, these bond auctions showed that investor’s demand for countries within the eurozone is still very high. In my opninion this strength for the Euro is very unfair given that debt problems have only been reduced by the bond auction and not eradicated for good, this only goes to prove the fragility of the pound at present and the lack of interest in investing because in reality the currency should be especially strong.

Producer Price Index figures released this morning for the UK have helped to halt the Euros steady progress as all figures that were released were positive, and these have therefore helped to halt the Euro’s gains. However the big release for sterling this week will be retail sales figures due to be released on Friday. These are predicted to come out much worse than expected due to the adverse weather conditions seen in December, if this happens then I would expect the exchange rates to be massively affected as a result.

If you do have an upcoming currency exchange then you will want to employ the services of an experienced currency broker who can help to guide you through the process, outlining what economic releases are due that may impact the value of a transfer as well as offering you a number of contract options that can be specifically tailored to suit your individual needs.

By Alex Ellis

Bond auctions for Portugal, Spain and Italy threw up a few surprises today as investors were very generous in their offerings allowing the Euro to claw back some of the ground lost since the beginning of the week.

Portugal was the biggest surprise raising €1.249billlion in an auction of 4 and 10 year bonds, the average interest rate for these bonds was 6.719%. This sale seemed to show that Portugal have the ability to raise funds on the financial markets in order to combat debt and was therefore generally taken as a positive for the Euro. Today we have had the Spanish auction and this again was seen as positive as the country raised €3billion with the average interest rate being 4.542% this has only gone some way in soothing fears over the Eurozone debt problems and therefore has helped the Euro.

If you have an upcoming currency exchange then my prediction is that we will see a short period of Euro strength in the aftermath to the Euro situation. Data releases for the pound have not been strong as of late and therefore if investors show faith in the Euro then I think that this could damage the pound. The only way to hinder this will be if the spotlight moves back towards eurozone debt.