Smart Weekly Currency Note - 16th October 2009

Smart Currency Exchange - Weekly Currency Rates

Weekly Currency Interbank Exchange Rates 16th October 2009

Currency Rate Last Week Rate This Week  EURO 1.081 1.098 US$ 1.587 1.635 CAN$ 1.659 1.700 AUS$ 1.759 1.786 NZD 2.170 2.213 AED 5.832 6.008 CHF 1.642 1.666 ZAR(Rand) 11.778 12.002 Charles's Thoughts: A better week for sterling. It started off badly with sterling hitting a six month low against the euro. This was on the back of the rate of inflation for September being under expectations at 1.1% [August 1.6%]. I must admit I do wonder why there is inflation rather than deflation but I suspect sterling’s weakness is a significant factor increasing the cost of energy and food imports. But then sterling started to strengthen as members of the Bank of England’s monetary policy committee talked up the success of their programme of quantitative easing. Firstly the impression was given that the BoE would not increase the programme in the short term and then it was highlighted that the programme had been effective in getting the economy moving. They also acknowledged the need to remove this huge stimulus before it leads to inflation exceeding the 2% target. Also economic data on house prices and unemployment were better than expected and sterling had a strong end to the week. The US$ did the reverse to sterling losing ground throughout the week getting close to US$1.50/€1. Good US corporate results from Intel and JP Morgan increased risk appetite. We also had the minutes of the last Federal Reserve meeting released which highlighted [again] that although the economy was moving forward with retails sales and manufacturing output being better than expected the improvement was slow and subject to possible set backs and as such interest rates would be kept at their current levels for quite a while. So no change in sentiment. The euro continued to advance against the US$ but as noted above lost ground against sterling. Nothing new to report. The European Central Bank still view the current euro interest rate as appropriate but are conscious that the euros strength is having a negative effect on exports and as such will be detrimental to euro lands ongoing recovery. Commodity prices continue to rise and as noted above risk appetite is increasing. This continues to be supportive to the high yield and commodity backed currencies. 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!

 

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