In this mornings trading, Sterling fell sharply - and by a big margin.

Since the markets opened at 8am, GBPEUR has fallen from 1.14 to just over 1.10. GBPUSD has falled from 1.4430 to 1.40. Sterling fell against every currency we trade.

Could it be the snow?!
Disruption caused by the heavy snowfall could cost UK businesses more than £1.2bn, business groups have estimated. The Federation of Small Businesses (FSB) said that 20% of the UK’s working population, or 6.4 million people, would not make it to work.

South-east England has the worst snow it has seen for 18 years, causing all London buses to be pulled from service and the closure of Heathrow runways. Trading on the London Stock Exchange was thinner than normal. Stephen Alambritis from the FSB said its estimate was a cautious one and the actual cost was likely to be higher.

“There is also the knock-on effect of passing trade going down as people won’t be buying their sandwiches for lunch or picking up a coffee or newspaper,” he said.

Here at FCD offices, I’m pleased to say all the traders managed to get to the office (eventually!) and we are open for business as usual.

The only economic data of note this morning for the UK actually came in better than expected, but this was not enough to halt the alarming decline of Sterling.

Also, this could be the markets starting to react to an expected interest rate cut this Thursday by the Bank of England.

Data
This afternoon we have various data from the USA. Tomorrow Construction data for the UK, and Producer Price Index data from the Eurozone.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Click Here to Send me an Email

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

Sterling has good week.
The pound strengthened to the best levels in some time against the Euro yesterday due to weak Euro Zone data. The EU manufacturing and service industry contracted for an eighth straight month in January while confidence in the EU economic outlook dropped to a new low in December.

“We’re very carefully observing all incoming data”, Jean-Claude Trichet, president of the European Central Bank said. “This year is in the negative territory and even more in negative territory than our last projections” he added. Meanwhile, the International Monetary Fund yesterday cut its forecast for the EU economy predicting a contraction of 2% this year, against a previous estimate of only 0.5%

Trichet, speaking at the World Economic Forum in Davos went on to indicate that interest rates in the Euro Zone, currently at 2% an all time low, may have to be cut further in March. Trichet did state that he wanted to avoid following the FED in cutting rates to “very very low levels” however, recession in the Euro Zone has forced the ECB into its most aggressive series of interest rate cuts in its 10 year history.

Although we saw Sterling rally yesterday due to these comments there is no guarantee that this strength will last. Geraldine Concagh, economist at AIB Group Treasury stated “Sterling has bounced back from very low levels but it still remains extremely vulnerable… I don’t think we are at the start of a large rally.”

Soros Profits Again On Sterling Weakness
It emerged yesterday at the World Economic Forum in Davos that George Soros had been betting on Sterling to weaken and had made a healthy profit from the pounds recent decline. Soros shot to fame when he famously bet against the pound resulting in the UK being forced out of the ERM (Exchange Rate Mechanism) in 1992.

What is interesting for those who have a currency requirement is that Soros is now undecided as to the future of the pound stating yesterday that the pound will “continue to fluctuate” as it has done in recent weeks. So, if the man who has more often than not been correct on second guessing the fortunes of the pound is uncertain on how it will fare over the coming months is it worth holding on to see if the pound will get stronger?

Todays data
All UK Data released this morning a few minutes ago at 9.30:
Mortgage approvals - 31000 new mortgages in UK. only 26000 expected. Good for Sterling
Consumer Credit - figures slightly worse than expected

The above data has caused some further Strength for the pound. At the time of writing:

GPP/EUR 1.1130
GBP/USD 1.4333
GBP/CAD 1.7644
GBP/AUD 2.2263
GBP/NZD 2.7960

In these uncertain times with such large movements in the currency markets it is more important than ever to be ready to fix your exchange rate on a phone call from your dedicated currency broker here at Foreign Currency Direct PLC.

So, to open a free, no obligation trading facility click on the links below, and you will be able to discuss all the options open to you including a forward contract where, for a small deposit, you can fix your rate of exchange for a period in the future protecting yourself from any possible downturns in the market.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Click Here to Send me an Email

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

Sterling Strength
Yesterday we saw Sterling exchange rates gain strength across the board. On Monday Sterling gained following the rise of banking shares, and with it a rise in confidence in the UK banking sector.

Further Sterling strength followed yesterday after Business Secretary Lord Mandelson outlined a package of government support for the UK car industry worth up to a potential £2.3bn.

The package includes a scheme to unlock £1.3bn of loans from Europe for car manufacturers and major suppliers. He said the government would also guarantee up to £1bn of further loans.

He said the car industry was “not a lame duck” and said the package was “not a bail out” but would “reinvent” the industry “for a low carbon future”.

The markets responded positively to the news, and was the main driver for Sterling gaining almost 1.5% against most major currencies, including USD and EUR.

So if the pound is on the way up, should I wait to buy my currency?
It’s impossible to predict market movements, and when to buy your currency has to be your decision. However with regards to this recent strength for the pound, what I would say is spikes such as this can often be extremely short lived.
As this GBPEUR chart shows (in Red), each instance of Sterling Strength over the last 3 months has not lasted very long, and is quickly followed by more weakness for the pound. As you can clearly see, the general trend shows a constant decline for the pound.

As most people are aware, the general economic outlook for the UK remains very poor indeed. We are officially in a recession, unemployment is rising at an alarming rate, house prices are falling and household names are going into administration, seemingly by the day.

According to Ken Clarke, Shadow Business Secretary, The UK’s economic recovery is likely to take several years. Mr Clarke said yesterday that 2009 was set to be a “dreadful” year and should the Tories win the next election they would face a “difficult” economic task.

So, consider taking advantage of this spike while it is available, and protect yourself from possible adverse rate movements.

World Economic Forum
Also today, more than 2,500 of the world’s top business leaders and politicians come to the Swiss mountain village of Davos to attend the World Economic Forum.

The not-for-profit Forum will have participants from over 90 countries, all the world’s top banks and industry giants will be represented, and a record number of world leaders, heads of state and government officials from around the world will also be present. Also today, the IMF is expected to paint a very gloomy picture of the UK economy.

Depending on what is discussed and what plans are implemented as a result, there will likely be new policies to ease the world economic down turn. Of course, FCD’s daily Market Reports will keep you abreast of developments, and how exchange rates may be affected.

Interest Rates and their effect
Today we see Interest Rate decisions by both the US and New Zealand. The US has little room to move rates so I expect the FED to leave rates on hold.
In New Zealand however the consensus is for a 1% cut from the current 5% down to 4%. This could present opportunities to purchase NZD at levels more attractive than have been available of late. Get in touch to find out more.

In the UK, successive cuts by the Bank of England have severely weakened the pound. We see the UK’s next interest rate decision a week on Thursday.

Currently rates are at 1.5% and are expected to be cut by at least 0.5%. A bigger cut is not out of the question however, and lower interest rates usually result in a weaker pound and could well cause rates to continue to fall. Some policymakers have said the bank may eventually have to cut interest rates to zero.

Summary
Taking all of the above into account, and you can see the current market conditions are very volatile to say the least.

By letting your dedicated dealer at FCD know all your currency requirements for the next 12 months, we can explain the various tools we have available to tailor to your specific requirements.

In these turbulent times, don’t let your currency cost you any more than it has to. FCD are here to help; our objective is to make buying or selling foreign currency as simple, straightforward and stress-free as possible for you.

This approach, combined with our award winning service, and Best Exchange Rate accolade from The Sunday Times every year since 2006, means you are in good hands.

Contact us today on 0800 328 5883 / +44 1494 725 353 or email me today.

Economic Data:
Today
German Consumer Price Index (CPI)Australian CPI
US Interest Rate Decision
New Zealand Interest Rate Decision
Tomorrow
EU Consumer Confidence
EU Economic Confidence
US New Home Sales Data This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Click Here to Send me an Email

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

A New Week
Already more job losses announced. Steelmaker Corus has confirmed that it is cutting 3,500 jobs worldwide, including about 2,500 in the UK. The announcement comes after Corus, like all steel firms, has seen a substantial fall in demand. Corus, a subsidiary of India’s Tata Steel, currently employs 24,000 people in the UK and 42,000 worldwide. This pushes up the jobless total in the UK now standing at nearly 2 million. David Blanchflower, the member of the Bank of England’s monetary policy committee (MPC), said in an interview that we would see a rise in unemployment to over 3m from the current standing of 1.92m in a year’s time. Expect further Sterling weakness as jobs go in the UK

Interest Rates
Blanchflower, who consistently warned of the danger of recession, believes UK interest rates should “obviously” head down to America’s near-zero level. He said UK rates had to head down to the 0% to 0.25% level set by the Federal Reserve in America.

He denied that rate cuts had lost their impact but welcomed the fact that further tools, including “quantitative easing” – artificially boosting the money supply – would soon be at the Bank’s disposal. Though no decisions have yet been taken on this, it is expected that MPC members will have the say on when, and by how much, quantitive easing should occur. According to a survey of analysts by Ideaglobal.com, the financial research company, analysts expect the Bank of England to cut interest rates from 1.5% to 1% when the MPC meets on February 4-5.

As regular readers will know, lower interest rates tend to lead to a weakening of the currency concered, so Sterling remains under pressure.

THE WEEK AHEAD
Tuesday sees consumer confidence data releases for the US.

Wednesday sees CPI data released for Germany and Australia as well as the Federal Reserve of America’s and the Reserve Bank of New Zealand’s interest rate decision.

Thursday sees data released for consumer confidence in the eurozone.

Friday sees GDP and personal consumption data released for the US as well as eurozone CPI data and Bank of Japan minutes. If there is any deviance from the expected data values then expect exchange rate movements in the respective currencies.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Click Here to Send me an Email

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

The UK is now in recession for the first time since 1991, official government figures have confirmed. Gross domestic product fell by 1.5% in the last three months of 2008 after a 0.6% drop in the previous quarter. That means that the widely accepted definition of a recession - two consecutive quarters of falling economic growth - has been met.

It represents the biggest quarter-on-quarter decline since 1980, and a 1.8% fall on the same quarter a year ago. The worse-than-expected contraction sent sterling to a 24-year low against the dollar, with one pound buying $1.355. Meanwhile the FTSE 100 index fell almost 2%, below 4,000 points.

While this data had been widely predicted, it is still very nad news for both the UK and the pound. What started as a crisis in the financial sector continues to infect the wider economy.
Unemployment is accelerating sharply, with 1.92 million people now out of work, the housing market remains severely depressed and retail sales are weak.

Log in on Monday to see next weeks data releases, and how this might affect exchange rates.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Click Here to Send me an Email

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

UK unemployment
UK unemployment rose by 131,000 to 1.92 million between September and November, the highest total since September 1997. That does not include the tens of thousands of jobs cut since November. The number of people claiming jobseeker’s allowance increased by 77,900 to 1.16 million, according to the Office for National Statistics.

Employment minister Tony McNulty said the figures were “very disappointing” and predicted things would “get worse before they get better”. The unemployment rate was 6.1% for the three months to the end of November, compared with 5.2% in the same period of 2007.

It is the highest jobless rate since the three months to the end of April 1999. There were 225,000 redundancies in the three month period, which is the highest level since the figure began being compiled in 1995. “This is a very rapid pace of job shedding,” said Alan Clarke at BNP Paribas. “It is still very early days in this recession and there is plenty of bad news in the pipeline.”

Already Sterling has weakened by about 1% across the board.

Dollar Rate 7 year Low
Sterling’s slide has continued, with the pound falling close to $1.37, as concerns about the UK economy and the banking sector intensified. Sterling fell as low as $1.3715, its weakest level against the dollar since mid-2001.

The pound also weakened against the euro, with the single currency now worth 94 pence.
Banking shares took a further hit on Wednesday, with Barclays sliding more than 20% to a 24-year low. Shares in Lloyds Banking Group, which now includes HBOS, were 17% lower at 37p.
The declines followed sharp falls in finance-related stocks in the US, amid renewed concern about the health of the global banking system. Royal Bank of Scotland, however, was up 5% at 10.8 pence.

Also, Brittania are to merge with the Co-Op, creating the UK’s biggest customer owned bank. They hope their ethical approach will stand them in good stead through the banking crisis. I hope so as I bank with both of them!

More bad news tomorrow, probably! If you have a currency requirement, sitting on the fence is risly in the current climate. Nobody knows which way rates may go, but certainly the UK economic position is extremely weak at the moment. More bad news is likely to hit the pound further.

“I would urge you to sell any sterling you might have. The UK is finished” said Jim Rodgers, chairman of Singapore-based Rogers Holdings, in an interview with Bloomberg Television. Evfen the deputy director of the Bank of Engalnd said ion the last few days what the next step is in fighting the economic slowdown. His reply? We cross our fingers.

Crossing fingers does not sound like a sound economic tool to me. Worrying times.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Click Here to Send me an Email

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

The government has announced a second package of measures to encourage banks to lend to individuals and businesses. The long list of measures includes a scheme to offer insurance against banks losing more money from the bad debts that started the credit crunch.

Prime Minister Gordon Brown condemned the banks that had made losses from “irresponsible” lending. The Bank of England has been given a new role - it will be able to buy up to £50bn of assets directly from firms.

Four key points
On another day of major development for the banking sector, here are the key points of the government’s latest announcement:

• Banks will be able to take up government insurance against their expected bad debts
• The Bank of England will be able to buy stakes in companies in all sectors of the economy
• Northern Rock has been given extra time to repay its loans from the government
• The government is increasing its stake in Royal Bank of Scotland (RBS) to nearly 70% from 58%. RBS also said it was set to report a huge loss for 2008, with asset write-downs of up to
£20bn

RBS Losses
Royal Bank of Scotland is heading for a record UK loss after saying it expects to report a deficit before write-downs of between £7bn and £8bn for 2008. RBS also expects to write down assets, largely related to its takeover of ABN Amro in 2007, of up to £20bn in 2007.

This means RBS’s final deficit is set to beat the current record UK loss of £15bn, reported by Vodafone in 2006. The Treasury has also swapped £5bn of preference shares for ordinary shares, taking its stake in RBS to nearly 70%. Shares in RBS dropped 36% in morning trading, in reactions to what can only be described as more bad news for the UK, and therfore the pound.

Exchanger rates, particularly GBPEUR had seen a slight boost over the last 2 weeks as the European Central bank unexpectedly cut interest rates, thus weakening the Euro and rates going up.

With the continued turmoil in the financial markets, and in particular the dire oultlook for the UK econonmy, I think it is highly likely the pound may continue to fall.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Email Me

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

The focus is on US economic data today and on events in the financial sector after the US government announced a new package of guarantees yesterday to protect Bank of America from possible losses on $118bn of assets.

The US Treasury will also invest $20bn from the TARP in the bank in exchange for preferred stock. The market consensus is for a 0.9% contraction in US CPI inflation in December. This represents a smaller contraction than the record 1.7% monthly fall in November. However, on an annual basis, this translates to a decline of 0.2%, the first contraction since 1955, as energy prices plummet.

This projected rate for December compares with annual growth of 1.1% in November. Core prices, which exclude food and energy are expected to rise by 0.1% in December, compared with no change in November. US industrial production for December is also published and may show that the sectors output declined by 1% on a monthly basis compared with a decline of 0.6% in November.

AIB
The Irish government has said it is to nationalise the Anglo Irish Bank after deciding pumping money into the lender was not enough to secure its future.
The state had planned on injecting 1.5bn euros (£1.4bn) into the bank, but said its weak funding and damage to its reputation prompted a change of tack.

Buying Euros
Those of you purchasing Euros yesterday will have been affected by the European Central Banks decision, as many predicted, to cut interest rates by half of one percent taking the rate to two percent, the lowest for three years. Regular readers will know that any move in interest rate can have a significant effect on the valuation of a currency on world markets as investors increasingly move funds internationally to achieve the best return.

Those clients who had taken the 30 seconds to open an account without any obligation to trade were able to make the most of the best Euro buying opportunities for 5 weeks. This was helped by the ECB president Jean Claude Trichet’s stating his concern regarding the economic outlook for 2009 he went on to say there is little likelihood of any inflationary pressures in the second half of 2009. With further cuts already anticipated and priced into the market it is unlikely these rates will be beaten for quite some time.

Buying Dollars
We may see some greenback strength today (GBPUSD rates deteriorating) following the overnight announcement that the Bank of America will receive $20bn in fresh US government aid and $118bn worth of guarantees against bad assets as part of the second phase of the US bank bail-out plan. The emergency funding will help the troubled bank - the US’s largest - absorb the losses it incurred when it bought Merrill Lynch.

In return for the money, the US Treasury will take a stake in the bank.

The release of these funds is being seen as the first time Barak Obama has had his wishes passed through congress as the application was put in place by George Bush on behalf of the soon to be US President.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Email Me

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

This blog will not be updated on Thursday 15th January due to my absence from the office. Please see below the days data releases. Lots from the US, and of course the EU interest rate decision, both of which is likely to cause volatility to the GBPUSD rate and GBPEUR Rate.

Australia
Employment Change (Dec)

Australia
Unemployment Rate (Dec)

Germany
Consumer Price Index (MoM) (Dec)

Germany
Consumer Price Index (YoY) (Dec)

European Monetary Union
Consumer Price Index - Core (YoY) (Dec)

European Monetary Union
Consumer Price Index (MoM) (Dec)

European Monetary Union
Consumer Price Index (YoY) (Dec)

European Monetary Union
ECB Interest Rate Decision

United States
Continuing Jobless Claims (Jan 3)

European Monetary Union
ECB Trichet’s Speech

United States
Initial Jobless Claims (Jan 10)

Canada
New Motor Vehicle Sales (MoM) (Nov)

United States
NY Empire State Manufacturing Index (Dec)

United States
Producer Price Index (MoM) (Dec)

United States
Producer Price Index (YoY) (Dec)

United States
Producer Price Index ex Food & Energy (MoM) (Dec)

United States
Philadelphia Fed Manufacturing Survey (Jan)

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Email Me

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona

Foreign ExchangeThis report will give you an insight into the Current foreign currency market conditions and how it will affect you and your currency requirements.

NewsBarclays are to cut at least 2,100 jobs globally across its investment banking and wealth management businesses.It is understood that 1,300 jobs will go at investment at Barclays Capital, while 500 positions will be axed at Barclays Wealth. A further 370 jobs are set to go at Barclays Global Investors. It also understood that Ministers are considering plans to guarantee up to £20bn of loans to small businesses to help them survive the downturn.

GBP/EUR
Exchange rate newsThe pound tumbled against the Euro yesterday as bad trade balance figures affected sterling against the single currency.The trade balance released by the National Statistics is a balance between exports and imports of goods.

A positive value shows trade surplus, while a negative value shows trade deficit. Britain’s goods trade deficit with the rest of the world widened to a record level in November, suggesting weaker sterling has failed to boost exports as policymakers had hoped.

Trade in goods to non-European Union countries drove the widening global trade gap, itself suffering the biggest deficit on record as demand from importing countries tumbled, especially in the United States. We have seen some strength in recent days as the pound has reached its highest level within a month against the Euro.

However it may seem l we are now on the steady slope down again so to secure a rate today call one of our dedicated team and discuss your currency requirements and see how we can save you money on your transfer.Germany unveiled a new 50 billion euro stimulus package on Tuesday in a bid to shield its economy from the biggest recession since World War Two and silence critics who have accused it of doing too little to boost growth.”A government growth programme like this, combined with measures taken in neighbouring countries, cannot prevent recession but can limit its severity. That is the goal,” said German Finance Minister Peer Steinbrueck told reporters.

With this news and rate cuts from ECB on Thursday we may see some Euro strength on the back of this.

GBP/USD
Yesterday we saw Sterling lose over 3 cents on the Dollar. This may be due to the US Trade Balance being alot better than expected coming out at nearly 16 Billion Dollars better than forecast.Yesterday also saw U.S. Federal Reserve Chairman Ben Bernanke giving his speech on how the Fed views the Current economic situation.

He went on to say “For almost a year and a half the global financial system has been under extraordinary stress- stress that has now decisively spilled over to the global economy more broadly,”“The damage, in terms of lost output, lost jobs, and lost wealth, is already substantial”

These are words we are all too familiar with, and in these times of worry it may be best if you have a currency requirement you may want to get it done sooner rather than later, you can lock out a forward rate for up to 2 years in advance protecting you from any downturns within the market.

This is a brief summary of todays report. Click here to read the full report on our main website

If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Email Me

GBP Sterling USD Dollar EUR Euro NZD Kiwi AUD Aussie DKK Krona CAD Loonie CHF Swiss ZAR Rand THB Baht HKD Dollar CZK Krona TRY Lira SEK Krona NOK Krona