Smart Weekly Currency Note - 24th July 2009

Smart Currency Exchange - Weekly Currency Rates

Weekly Currency Interbank Exchange Rates 24th July 2009

Currency Rate Last Week Rate This Week EURO 1.156 1.156 US$ 1.632 1.642 CAN$ 1.824 1.774 AUS$ 2.038 2.014 NZD 2.539 2.504 AED 5.996 6.028 CHF 1.758 1.760 ZAR(Rand) 13.144 12.788   Charles's Thoughts: A quite week for sterling as it tended to trade in a narrow range against both the US$ and the €. It seems to be waiting for a catalyst to give it some momentum one way or the other. The initial estimate of 2nd quarter gross domestic product released during the week showed a larger contraction than expected but was a vast improvement on the previous quarter. This has been taken as a sign that the economy is close to the bottom of this recession. This view was also supported by the minutes from the last Bank of England meeting which highlighted that the BoE was unlikely in the short term to increase its programme of quantitative easing. The reason given was the need to properly assess the affect of the programme to date. This makes sense. The major constraint for sterling is the level of government debt and the lack of a plan [or political will power] from the government to bring it down. Until this is resolved the upside for sterling is limited. The US$ also had an uneventful week. At the start of the week the Federal Reserve Chairman reported to Congress and made it very clear that the key aim was to continue to nurture the green shoots of recovery. Their major “support” for this approach is to keep interest rates low until it is very clear that the recovery is robust. This usually means that unemployment is falling. I have no reason to think differently this time and as most forecasts seen to think this will not happen until 2011 we are in for a long period of low interest rates. A similar approach is likely from the UK and Euro land central banks. The US$ did lose a bit of ground against sterling on the rise of risk appetite. The economic landscape in euro land seems to be very similar to that of the US and the UK. The pace of the decline is slowing which gives the feeling that we are close to the bottom. This is supported by a the rise in the purchasing managers survey in the manufacturing and services sector which both increased in July to the 45-46 level. Still less than the magic 50 which indicates expansion but at the very least they are going in the right direction. The commodity backed and/or higher interest paying currencies all had a good week as risk appetite came to the fore. There seems to be a restocking underway and iron ore prices have shown a near doubling over the last six months. I hope it isn’t too much too soon. 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 (+44 0207 898 0541) 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 (if calling from outside the UK, please use +44 0207 898 0541) 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!

---

SCE/OGC

1 Lyric Square
London, London
W6 0NB
GB


If you no longer wish to receive communication from us:
Cancel

To update your contact information:
Update