Charles's Thoughts: A quiet week for sterling. No statements from the Governor of the Bank of England or negative economic data to undermine sterling. In fact the economic news was on the whole positive with improving house prices, retail sales and industrial sentiment. However this improvement is only gradual and similar to that enjoyed being elsewhere in the world. This worried the market as it supports the view that the UK economy has stabilised but that the road to recovery is going to be slow rather than rapid. I suspect this is what most of us already knew but the stock markets were over optimistic and pulled back. As a result risk appetite fell and safe haven assets benefited. A similar story for the US and the US$. Unemployment figures released today were slightly worse than expected but economic data showed that the economy had stabilised and that it was moving forward gradually. Again no great surprise but the US$ does benefit from its safe haven status so when investors realised they were being too optimistic the US$ gained ground.
The euro continues to be the most favoured currency. Similar economic data to that of the UK and the US showed that the euro lands economies were improving gradually. The European Central Bank carried out its second funding auction. The first one in June ended up with the ECB lending banks over €440bn. The second auction resulted in the ECB only lending €75bn which was half of what was forecast. This indicated that liquidity in the market place was much improved and lent further support to the euro.
Continued strength for the high-yield/commodity backed currencies. In Australia retails sales had a higher than expected rise which increases the expectation that the Australian Reserve Bank will be the first to start increasing interest rates. This helped the Australian dollar.
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.
