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By Jonathan Watson

        Confidence seems to have been the buzzword in the last 24 hours. Firstly the CBI – Confederation of British Industry - survey of business confidence showed that retail sales had risen at their fastest pace in three years for June to July. They could have been boosted by the World Cup, but it is still money being spent in our economy reflecting the continuing and encouraging growth the UK is experiencing.

We then had a report from the US Conference Board who conducted a survey of consumers and noted that confidence was at a low not seen since February, as reflected by the US dollar’s weakest positioning since Fenruary.

New Zealand Business Confidence figures released today by the National Bank of New Zealand show that there is also reduced confidence there, down at quite an alarming rate.

In europe confidence is up following the stress test results which by and large showed that the european financial market can handle the pressures placed upon it.

I think the key thing is the reduced US confidence and increased euro confidence. This is because the euro debt default and contagion risk had been a huge weight on europes shoulders that some stated threatened the very existence of the euro! Now that this fear has been aleviated it has helped not only the euro but many other currencies as investors move away from ‘flight to quality’ or ’safety’ currencies (like the US dollar or in commodities gold) and into other options. The Australian dollar and the Kiwi dollar had recently benefited from this.

We see a lot of GBPEUR activity and think todays German CPI (Consumer Price Index) Inflation data could help strengthen the euro. Those with immediate requirements may wish to consider their options before this comes out, the time of which for release has not yet been confirmed.

To discuss further or find out more about any of the issues discussed here, please get in touch via the contact form. As specialist currency traders, we will be happy to discuss the market and how we can assist in securing award winning rates.

By Jonathan Watson

Tomorrow morning sees the release of the UK’s GDP figures. The anticipated increase should help strengthen the pound, which has had a real rough ride recently, particularly against the euro.

Roughly 7 euro cents has been lost in the last few weeks on the GBPEUR pairing. Great news for those who are selling euros, bad news for those buying euros!

 With a difference between the high and the low of approximately 6%, this volatility would severely affect your currency transfer. Staying close to a currency broker can help manage the impact of such volatility.

Stress Test results due tomorrow should shape the market. This issue has I believe been propping up the euro of late and once it is confined to history the markets will begin to refocus on what I consider the real issue - debt and astronomical budget deficits. Yes the UK also suffers this problem, but we have growth to support tackling the problem. Many eurozone countries are predicting negative growth. Poor results in the southern countries shadow any good news from the likes of Germany and France.

We still have quite a wait before the full effects of the UK’s Emergency budget are felt. Nevertheless if growth figures continue to creep up, the UK should have enough horsepower to weather the cuts and come out stronger with a healthier balance sheet than it does now. Based on this I would expect sterling to make gains against all the majors, particualrly the USD and the Euro. Of course only time will tell…

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By Jonathan Watson

The Euro has made further inroads into sterling today pushing it down to the 1.17 mark. It has rebounded slightly up the mid 1.17’s on news of Moody’s downgrading Ireland’s credit rating.

Intreresting news this week is the result of the European Stress Tests on Friday. This was expected to be sterling positive some months ago, but now looks to be euro positive. The Greek Finance Minister  has stated he was confident Greece will pass the tests. Greece are arguably the most affected by the debt crisis and such sentiments show how this may not move the market as previously thought.

The Canadian Interest Rate decision is due tomorrow. Canada is widely predicted to raise interest rates from 0.5% to 0.75%. This will likely lead to some CAD strength and I would anticipate this eradicating many of the gains sterling had recently made, which had been holidng quite strong.

If you have any currency requirements and would like to discuss how to maximise your transfer via preferential rates of exchange, use the contact form and an experienced currency trader will be in touch..

By Jonathan Watson

The euro has had a great week hitting 1.30 against the dollar and pinning sterling under 1.20.

The pound had a boost following the Emergency budget but it now appears that the budget is throwing up more questions. The key question is one of balance. Can the coalition government strike the right balance between ensuring a sustainable recovery whilst also implementing measures to reduce our budget deficit.

The UK’s credit rating has been at threat and the government had to act to show markets that UK PLC was working to solve it’s debt problems. These same measures however will likely lead to job losses and a reduction in growth which will affect the economy and it’s recovery. It is a Catch-22 situation and the government needs to get the balance right – no easy task.

It is worth noting that these problems could be around for sometime. The Emergency Budget contained numerous measures which we will not see the effects of until 2011 and beyond. For example VAT increases to 20% in 2011. Will the extra revenue this raises be outweighed by the potential decrease in revenue from reduced consumer spending? The answer is we just don’t know.

Investors and markets like certainty and at present there is not much emanating from the UK.

To find out more about securing preferential rates of exchange please use the contact us form and we will be in touch to discuss how we can help!

By Jonathan Watson

We have seen recently how the recent gains made by Sterling have been eradicated. With over 4 euro cents and 2 dollar cents taken off in the last 9 days, sterling really needs a boost.

GDP data for the UK has been affirmed at 0.3% for Q1, confirming the weak emergence from recession. The markets are still very cautious, I think this will only continue in the short term as real details of the UK’s Emergency Budget slowly filter through.

The Ozzie dollar remains very strong against Sterling but could get stronger now the Mining Tax has been widely accepted, further boosting security in their Industrial sector. The Canadian dollar also remains quite strong following some positive unemployment figures last week.

If you have any currency transactions to make, please fill in the contact form and an experienced trader will advise you on how best to secure advantageous rates of currency exchange.