Weekly currency note: 30th September 2005
Overview
Both the Euro and the US$ have continued to strengthen
against sterling. In the UK the high street continued
to perform badly whereas in the US and Euro land
inflation is still the major concern.
Why is currency management so important?
If you had bought US$100,000 two weeks ago at 1.85ish
it would have cost you £54,054. If you bought it today
it would cost you nearly £3,000 more.
What else could you have done with that £3,000? It pays
for a lot of flights to the US.
And it isn't difficult to secure the preferential exchange
rate. If you know what you require and have a reasonable
feel of the timescales in which you will need those funds,
we would be able to use a forward contract to secure the
exchange rate.
This removes all the risk, the stress and the strain. You
know exactly what amount you need in sterling. The figure
will not change. No more sleepless nights.
I cannot stress highly enough the need to be in a position
to secure a preferential exchange rate quickly since events
that can move exchange rates both quickly and dramatically
happen more often than people realise.
Open an account today by calling me on 0870 285 0364 or fill
out our online quotation form
at: http://www.smartcurrencyexchange.com/smartquotation.htm
The Euro vs. the £
The Euro started the week at 1.477ish and is currently
1.467ish.
The Euro has strengthened steadily all week. Poor UK retail
figures from the high street and poor forecast growth figures
highlighted the uncertain state of the UK economy. This
raised in the mind of the market the possibility of reduced
interest rates here in the UK.
Inflation is increasing in Euro land which raises the very real
spectre of higher interest rates from the current 2% bank rate.
I must admit that I still think inflation is a major problem
here in the UK and we probably stand an equal chance of the
BOE raising interest rates as we do of them reducing interest
rates
There has been no clear trend in the Euro/sterling exchange
rate for the last few months - just a broad trading range of
1.44 to 1.50. We are currently right in the middle of this
trading range with the Euro have the slight upper hand. If
time allows you, you should try and secure an exchange rate
if buying Euros in the top half and if selling Euros in the
bottom half.
Just so you know, currencies such as the Cypriot £ and the
Hungarian Forint, which are planning to move to the Euro in
due course, are closely aligned to the Euro. Therefore they
tend to track the Euro. Sometimes they do have a life of
their own but they do tend to come back into line sooner
rather than later.
If you need to BUY or SELL EUROS now is a good time to discuss
your options, so call me on 0870 285 0364 or fill out our
online quotation form
at: http://www.smartcurrencyexchange.com/smartquotation.htm
The US$ vs. the £
Three weeks ago, post Hurricane Katrina, the US$ was 1.84 plus.
Last week it was 1.78. It is now 1.766.
Inflation is the key problem in the minds of the powers that be
in the US. Interest rate rises are expected to continue thereby
supporting the US$.
The US$ is still not a one way bet as they have the twin deficits
of budget and balance of payments to contend with. However, for
the time being the US is able to manage these [very significant]
problems. We wait to see who will win.
As always I think the key is to work to a realistic budget price
and when this budget rate presents itself secure it either
through an immediate purchase of the currency or through a
forward contract [please call to discuss this option if you
are unclear as to what this means].
The Dirham and the US$ are closely tied. Therefore as the US$
moves so does the Dirham.
If you need to BUY or SELL USD, call me on 0870 285 0364 to
discuss your options or fill out our online quotation form
at: http://www.smartcurrencyexchange.com/smartquotation.htm
The Aus $ vs. the £
The Aus$ is strengthening again. It has pulled back to 2.31
having hit the 2.40 level three weeks ago. Being a higher yield
currency it has some benefits over sterling.
The Aus$ hit a high of 2.27ish late July. The Aus$ is pulling
back strongly and we wait to see if is able to strengthen even
further and beat the July high.
If you need to BUY or SELL Australian Dollars, call me on
0870 285 0364 to discuss your options or or fill out our
online quotation form
at: http://www.smartcurrencyexchange.com/smartquotation.htm
The Can$ vs. the £
Further strength from the Can$. The Can$ moved from 2.08 at the
start of the week to 2.05 at the end. The Can$ is very strong at
the moment. Justifiably so as the economy seems to be booming
and its commodities are in much demand
Over the last few months the Can$ has strengthened by 10% plus.
At the end of April it was 2.35ish. The level around 2.10 is
very significant and for the Can$ to strengthen further will
take some effort. However, if it does so then we could see a
very rapid appreciation.
History would still favour a return in the Can$ to 2.20 plus but
timescales are difficult if not impossible to estimate!
If you need to BUY or SELL Canadian Dollars, call me on
0870 285 0364 to discuss your options or fill out our online
quotation form
at: http://www.smartcurrencyexchange.com/smartquotation.htm
If you would like to discuss a currency not mentioned in this
note, the latest movements, secure an exchange rate or discuss
your particular situation, please feel free to contact me
on 0870 285 0364
Lastly, we're always working to improve the service provided by
Smart Currency Exchange, so if I can produce information in a
better format or make it easier to understand, of if you want
me to clarify what a particular term means, please send me your
questions, suggestions and/or
comments to mailto:Charles@SmartCurrencyExchange.com
Think Smart,
Charles Purdy
Director
Phone: 0870 285 0364
Fax: 0870 285 0365
http://www.SmartCurrencyExchange.com
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The UK's 1st (and Only) Currency Exchange Service Dedicated
Exclusively to Overseas Property Buyers
To get your complimentary report go to:
www.SmartCurrencyExchange.com/freereport.htm
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Disclaimer
As ever these are my musing as to how I see the various
markets going. They should not be taken as fact. The market
does what it wants to do. I have no crystal ball and as ever
I recommend 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 pain!
No comments:
Post a Comment