Dear Charles,
Weekly currency note:25th November 2005
Overview
Little movement in sterling this week. The damage was done last
week. Mixed messages abound. Is the end of interest rate rises
in the USA in sight? How extensive will the increases in
interest rates in Euro Land be? Will interest rates in the UK
be reduced or increased? The only stories in town are interest
rates. Fundamentals for the time being have been forgotten. We
are in a period where half baked stories seem to move the
exchange rates very quickly.
Why is currency management so important?
We recently got a testimonial from a client who stated that she
had saved £5,000 from using our services when compared to the
bank. This surprised even me. Just shows you what can be achieved
if you spend a bit of time thinking about your currency
requirements.
We have developed a short document which has helped a number of
clients to determine their requirements more clearly. If you
would like to find out more please give me a ring
on 020 7903 5275.
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 1.461ish and is currently 1.462ish.
Difficult to know where we go from here. Now may be the time
to sell.
As noted previously, 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. This range has tightened
in the last few weeks to 1.46 to 1.485. We are now at the
bottom of this range.
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 1.716.It is now 1.714. As noted, US$1.73ish is
a key level and we wait to see if the US$ breach of this level
can be sustained.
Further interest rate increases, which are now expected to exceed
original predictions given the level of inflation in the USA, are
lending further support to the US$. However, we still have to be
wary as the twin deficits of budget and the balance of payments
[which is still growing] as these mean that the USA is very
dependent on external parties buying dollars.
Momentum, purchasing parity and rising interest rates support my
inclination for further strengthening in the US$ but I could be
very wrong.
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 strengthened slightly over the week from 2.342 to
2.333ish The Aus$ is tracking the US$ and overall the Aus $ still
appears to be in a strengthening trend.
Although the negative sentiment surrounding the Aus$ has increased
in recent weeks it is likely to take its lead from the US$. A
retesting of the 2.27 level seen in July could be on the cards.
If you need to BUY or SELL Australian Dollars, call me
on 0870 285 0364 to discuss your options or or fill out our online
quotation form
at: http://www.smartcurrencyexchange.com/smartquotation.htm
The Can$ vs. the £
The Can$ was 2.04 at the start of the week and 2.00 at the end. The
Canadian $ is very strong at the moment. Interest rate rises in
December are being mooted.
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].
They also have a positive balance of payments as opposed to the USA
and Australia.
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. This would mean a whole new world for
the “loonie” as the Can$ is known. Interesting times.
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
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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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