Dear Charles,
Weekly currency note: 9th September 2005
Overview
A much calmer week. Sterling gently strengthening against
the Euro and slowly weakening against the US$.
I was talking with a client the other day who explained to
me that a good friend of hers had “lost” £17,000 by not
securing the most preferential exchange rate for her stage
payments. You may think that this friend was buying a really
expensive house. This was not the case. The property cost
was just over £100,000!
Sometimes our clients believe that we are here just to help
them get better - This is not always the case…
…If you are buying overseas it is important to set a budget
exchange-rate and work with Smart Currency Exchange to
secure that rate. This can save you money and also remove
the stress and strain.
The Euro vs. the £
The Euro started the week at 1.465ish and is currently 1.48ish.
Still no hard news to affect the exchange rate significantly.
Sterling seems to have a slight edge over the Euro but there
is no clear trend - just a broad trading range of 1.44 to
1.50. I suspect that we are not going to see any dramatic
moves unless there is a major economic or other type of
event to affect matters.
Just so you know, currencies such as the Cypriot £ and the
Hungarian Forint, which are planning to move to the Euro
in due course, are closely aligned to the Euro. Therefore
they tend to “track” the Euro. Sometimes they do have a
life of their own but they do tend to come back into line
sooner rather than later.
If you need to BUY EUROS now is a good time to discuss your
options, so call me on 0870 285 0364 or fill out our online
quotation form
at: http://www.smartcurrencyexchange.com/smartquotation.htm
The US$ vs. the £
A much calmer week. The US$ started the week at 1.835 and is
now 1.839. It has to be noted that it did spend a lot of the
week at 1.84 plus.
In the aftermath of Hurricane Katrina, instead of looking
for/expecting further increases in US interest rates the
expectation changed to minimal increases in the next few
months.
However this sentiment is changing and reverting to an
expectation of further interest rate increase in line with
those expected/forecast pre the hurricane.
The Fed, who set the interest rate in the US, meet next week.
This could be a very interesting [and volatile] week for
the US$.
Where to now? As noted last week, what was already a highly
complex situation has become even more complex.
As always I think the key is to work to a realistic budget
price and when this budget rate presents itself secure it
either through an immediate purchase of the currency or
through a forward contract [please call to discuss this
option if you are unclear as to what this means].
The Dirham and the US$ are closely tied. Therefore as the
US$ moves so does the Dirham.
If you need to BUY 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 beginning to strengthen again. It has pulled back
slightly to just under 2.38 from around the 2.40 level at the
start of the week. Being a higher yield currency it has some
benefits over sterling.
The Aus$ hit a high of 2.27ish late July. We have to be wary
that the recent weakness in the Aus$ may be a breather prior
to further strengthening. The commodity boom continues apace
with Australia benefiting accordingly.
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 £
The Can$ moved from 2.175 at the start of the week to 2.165
at the end. Not a significant move, more a gentle meander.
Over the last few months the Can$ has strengthened
significantly. At the end of April it was 2.35ish.
Early July it hit 2.11. A 10% appreciation in just over
3 months! The level of 2.10 is very significant and for
the Can$ to strengthen further will take some effort.
Expectation would favour a return in the Can$ to 2.20 plus.
Timescales though 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
Charles@SmartCurrencyExchange.com
Think Smart,
Charles Purdy
Director
Phone: 0870 285 0364
Fax: 0870 285 0365
http://www.SmartCurrencyExchange.com
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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!
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