Weekly Currency Note: 21st October 2005

Dear Charles,

Weekly currency note: 21st October 2005

Overview

Sterling continued to strengthen against the Euro and
consolidate against the US$. Interest rate cuts are not
a foregone conclusion here in the UK and Euro land is
still suffering poor economic growth. The US will continue
to raise interest rates as the fear is rising inflation.

Why is currency management so important?

If you had bought US$100,000 a month 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.

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 1.464ish and is currently
1.477ish. Sterling has gained 2 cents in the last two weeks.

Two factors were catalysts for last weeks gain in sterling.
The first was the announcement of poor economic performance
in Germany. The second were the minutes of the last Bank of
England meeting from which it was clear that further interest
rate cuts are not currently on the agenda.

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.

I would be surprised [and I have been surprised before many
times] if the current strengthening of sterling against the
Euro had much further to travel. One thing that could
undermine this thought process is if the Euro weakened
significantly against the US$.

May be a good time to buy those Euros.

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 £

Last week it was 1.769.It is now 1.761. The period of
consolidation continues.

Further interest rate increases are expected further supporting
the US$. We are still waiting to see what happens next.
The Euro/US$ exchange rate could have a major affect on the
sterling/US$ exchange rate.

US$1.73ish is a key level and we wait to see if it can breach
this level and strengthen further, stabilise at this sort of
level or begin to weaken as other fundamentals [i.e. the twin
deficits] take control.

My inclination is still for further strengthening in the US$ and
if the Euro weakens significantly against the US$ this could
happen very quickly.

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$ has weakened slightly over the week from 2.35 to 2.36ish
but overall the Aus $ is in a strengthening trend. The Aus $ will
I suspect take its lead from the US$.

The Aus$ hit a high of 2.27ish late July. Having hit 2.40 a few
weeks ago it is retesting the July level. We wait to see if it 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 £

The Can$ moved from 2.10 at the start of the week to 2.09 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 [and I talk
to a lot of people who are emigrating to Canada]. Interest rates may be
increased to combat inflation lending further support to the Can$.

The current level “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 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 reports 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!

If you no longer wish to receive communication from us:
http://autocontactor.com/app/r.asp?ID=46056571&ARID=120377

To update your contact information:
http://autocontactor.com/app/r.asp?c=1&ID=46056571