Weekly currency note: 16th September 2005
Overview
No great movement between Sterling and the Euro over
the week. We await the result of the German election
this weekend. The US$ continued to strengthen as the
affect of Hurricane Katrina on the markets begins
to wane.
Another horror story this week when a new client was
explaining how the exchange rate moved against him as
he paid for his off plan apartment. Some careful
(and creative) currency management would have saved
him a lot of money.
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.
I still stress that it is very important 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.
The Euro vs. the £
The Euro started the week at 1.48ish and is currently
1.477ish. Sterling pushed towards 1.485 in the first
half of the week but fell back on poor UK retail
figures.
We await the results of the German election this weekend.
Will a hung German parliament be bad for the Euro? Common
sense would say yes but when does common sense apply to
the currency market!
I still maintain my view of previous weeks 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 £
The US$ started the week at 1.839 and is now 1.804. A
strong rebound for the US$.
It would appear that people are expecting the Fed to raise
interest rates next week or at the very least the Fed will
indicate that after a short respite to counter the affect
of Hurricane Katrina interest rates will continue to be
increased.
Could be a volatile week for the US$.
Longer term we are still in a conflict between increasing
inflation and increasing interest rates vs. the twin deficits
of budget and balance of payments. Who will win? If history
is to be repeated we could be seeing the start of a
strengthening phase for the US$.
As always I think the key is to work to a realistic budget
price and when this budget rate presents itself secure it
either through an immediate purchase of the currency or
through a forward contract [please call to discuss this
option if you are unclear as to what this means].
The Dirham and the US$ 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 strengthening again. It has pulled back to just
over 2.35 from around the 2.40 level a couple of weeks ago.
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 2.165 at the start of the week to 2.132
at the end. Tracking the US$'s strength.
Over the last few months the Can$ 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 mailto: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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