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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.

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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 Jonathan Watson

The US dollar climbed to 1.5850 yesterday, up nearly 3 cents from the average trading level this month. This is presenting a great opportunity for those with US dollar requirements. The reasoning is in my opinion because the ECB undertook a massive purchase of Spanish and Portuguese debt and this helped strengthen the euro as it showed renewed confidence in the euro. Consequently investors who were seeking refuge in the US dollar have moved funds to the euro which they believe is a better option.

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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.

By Jonathan Watson

The US dollar will I feel make gains this year as unemployment appears to be coming down. But why then did the dollar lose over a cent in yesterdays trading? Well as happens in the global economy, seemingly unconnected events can via a chain reaction shape events in other spheres of the globe. Yesterday’s bond auction by the Portuguese government strengthened the euro as the ECB stepped in to help keep the interest rate low (relatively speaking).

I think we saw money moved away from the typcially safe haven dollar to the euro as investors were inspired to move money back to the euro. The dollar has really been benefitting of late due to it’s status as a safe haven and we saw it weaken yesterday as investors were moved to the euro.

I still think the euro has many problems to overcome, Spain has a bond auciton today which should be interesting. Looking at the evidence I expect further euro weakness in the coming weeks and consequently dollar strength.

For me this makes current rates very attractive. Why not speak to one of the team here at currencyline to see if we can save you some money on your currency transfer. As specialist currency experts we can make your currency transfers not only quick, easy and hassle free, but more importantly much more cost effective through our award winning exchange rates. Speak to us and find out more!