Smart Weekly Currency Note - 27th June 2009

Smart Currency Exchange - Weekly Currency Rates for Overseas Property Buyers

Weekly Currency Interbank Exchange Rates 27th June 2009

Currency Rate Last Week Rate This Week EURO 1.180 1.175 US$ 1.645 1.652 CAN$ 1.865 1.904 AUS$ 2.039 2.045 NZD 2.555 2.558 AED 6.039 6.063 CHF 1.783 1.788 ZAR(Rand) 13.308 13.037 Charles's Thoughts: Sterling’s recent run of form which started approximately 3 months ago has seemingly hit the buffers, trading in a narrow range this week around €1.17/£1 against the euro and $1.64/£1 against the US$. During Monday morning’s trading sterling peaked momentarily at €1.19/£1 but has since edged down and has dampened expectations that we will see sterling back into the 1.20+ region for a while at least. The Bank of England and its governor Mervin King have continued in their policy of trying to keep excitement for the recent gains by sterling and the improving sentiment domestically down by warning of the fragility still present within the UK financial sector and the negative effect of borrowing defaults in the future. A strong pound will also be likely to limit foreign investment and so there are strong signals that any substantial upside to sterling will be limited and perhaps even discouraged by the men at the top of the UK economy. The euro has also kept relatively steady on the markets this week despite a rather massive injection of €442b from the European Central Bank (ECB) in this week’s ‘one year funding’ auction. An easing in the rate of contraction within the euro economy in quarter 2 of 2009 was the most positive of recent market data. The ECB’s cautious, and in some minds slow, approach with its liquidity injections have been done with the luxury of seeing the reactions to similar measures by other central banks elsewhere in the world. So given sterling’s recent rally, there was little damage to be expected by such a large contribution. However, these stimuli and asset purchases will take some time to filter through the markets and into the respective economies to then give any firm evidence of success. The Federal Reserve (Fed) announcement in the US this week was unsurprising given that rates were expected to be held at the current minimal levels. But with little clue as to when the Fed expect to begin increasing the ‘key interest rate’ the US$ also kept to a relatively steady range against sterling and the euro. One comment that rates would remain at “exceptionally low” levels “for an extended period” suggest we should not be holding our breath. First quarter US GDP data was marginally better than expect when released on Thursday but with risk appetite/aversion still the major driving force behind the strength or weakness of the US$ on the markets only very limited momentum can be expected by such news. Amongst the high-yield and/or commodity backed currencies the New Zealand dollar remained steady despite a rather disappointing result in their GDP figures for the first quarter of 2009. Why is Currency Management So Important? Using a bank could cost you £3-4,000 per £100,000 transferred. Buying at the "wrong" time could cost you many £'000's more as rates can move as much as 3% in a very short period of time. Then add in transfer costs that the banks charge for sending and receiving funds and you could be looking at additional costs of £10,000 per £100,000 transferred. By developing a currency strategy and by working with a specialist currency broker these losses could be minimised if not eliminated. Smart Client Testimonial: "Thank you for making our transactions go so smoothly. As promised, our account was opened within hours. Your traders were pleasant and efficient, and each transaction was very much at the exchange rate I expected...ie not a million miles away from the inter-bank rates and certainly much better than my high street bank could quote. All in all, an easy experience and we will have absolutely no hesitation in recommending your services to any of our friends buying property abroad." Ian Pritchard If you haven't opened a Smart account yet, call me on freephone 0808 163 0102 or fill out our online Account Form at: http://www.SmartCurrencyExchange.com/application.htm How much will a Property Cost? To estimate the cost of a property simply DIVIDE the price of the property by the appropriate rate noted above. But note this is based on the inter bank rate so the actual cost will be slightly more. Charles Purdy Smart Resources Currency Strategy Worksheet Need help creating a Currency Strategy? Download our Currency Strategy Worksheet: http://www.smartcurrencyexchange.com/downloads/CurrencyStrategyWorksheet.pdf Currency Report Have your read our 10-page Currency Report that outlines the top 3 mistakes that overseas buyers make when exchanging and transferring their money overseas? Get the report here: http://www.SmartCurrencyExchange.com/downloads/ThreeMistakes.pdf Currency Quotation Are you interested in a currency rate for Euros, US$'s, CYP, NZD, or any other currency, please fill out our Smart quotation form at: http://www.SmartCurrencyExchange.com/smartquotation.htm Smart Currency Exchange Limited

email: Charles@SmartCurrencyExchange.com free phone: 0808 163 0102 web: http://www.SmartCurrencyExchange.com

Smart Currency Exchange | 1 Lyric Square | Hammersmith | London | W6 0NB | UK © 2005-2009 Copyright  Smart Currency Exchange Ltd THIS PUBLICATION DOES NOT CONSTITUTE ADVICE WITHIN THE TERMS OF THE FINANCIAL SERVICES ACT (OR ANY SUBSEQUENT REVISIONS, ADDITIONS, OR AMENDMENTS). Disclaimer Exchange rates can move very quickly. The above rates are the interbank rates and valid at a moment in time. The interbank rate is the rate at which the banks deal with each other in the foreign exchange markets. Suggestions should not be taken as advice or fact. The market does what it wants to do.  We have no crystal ball and as ever we suggest that if an exchange rate works for your budget then don't try and wait for an even better exchange rate, as Murphy's Law says the rate will go against you and cause you maximum trouble!

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