Smarts Weekly Currency Note - 23rd October 2009

Smart Currency Exchange - Weekly Currency Rates

Weekly Currency Interbank Exchange Rates 23rd October 2009

Currency Rate Last Week Rate This Week  EURO 1.098 1.088 US$ 1.635 1.631 CAN$ 1.700 1.716 AUS$ 1.786 1.768 NZD 2.213 2.162 AED 6.008 5.990 CHF 1.666 1.645 ZAR(Rand) 12.002 12.201 Charles's Thoughts: A difficult week for sterling. It started well when the minutes of the last meeting of the Bank of England’s monetary policy meeting showed a unanimous vote to keep their quantitative easing programme at current levels. This helped sterling gain against most currencies and at one stage sterling hit €1.11/£1. However there was a sting in the tail this Friday when the data showed that the UK economy had shrunk by 0.4% in the third quarter. This is the sixth quarter of contraction and highlights why the Governor of the BoE has been so cautious in his statements on the UK economy. Sterling went into immediate freefall although its net movement over the course of the week was limited. Still a long way for the UK economy to turn the corner and until then sterling will have few friends. The US$ lost ground against the € passing through US$1.50/€1. There is a lot of concern in the rest of the world regarding the US$’s weakness. Take for example the Brazilian real which has shown an appreciation of 30% plus against the US$ this year which clearly makes its exports less competitive. The concern is that the US$’s weakness may delay the recovery in countries where the currency has appreciated and even possibly causing the return of recession. So we wait next weeks US gross domestic product figures to see if the US is in growth as opposed to continuing contraction as we are here in the UK. In Euro land economic data was positive with positive figures for both the Purchasing Managers and Service indices. This supports the view that we will have seen positive growth in the last quarter from the economy. Still plenty of spare capacity which will mean that we are unlikely to see inflation in the near term and as such we will see interest rates kept low for some time. Commodity prices continue to rise with oil passing US$80. Also risk appetite continues to increase which is 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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