Dear Charles,
Weekly currency note: 16th December 2005
Overview
Sterling had a good week against the US$. However, it did
lose ground against the Euro. I still feel that now is a
good time to buy the currency.
Hard to believe that the positive tone for sterling is
based on strength. More a statement on the short term
weakness of the US$ and the Euro. It could all reverse
very quickly.
Why is currency management so important?
If you bought 200,000 euros at 1.48
it would have cost you £135,135. If you bought it
at 1.46 it would cost you nearly £1,850 more.
What else could you have done with that £1,850?
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].
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 1.483ish and is currently 1.476ish.
A slight fall in sterling this week. Given the lack of clear
indicators as to which way we will break out of this trading
range I suggest if you need Euros then now may still be the time
to buy
There has been no clear trend in the Euro/sterling exchange rate
for the last six months - just a broad trading range of 1.44 to
1.50. This range has tightened in the last couple of months to
1.46 to 1.485. We are now towards the top end 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 1.750.It is now 1.772. How much energy is left
in this rise in sterling is difficult to assess. It could be
limited.
Further interest rate increases, which may or may not exceed
original predictions, are lending further support to the US$.
Inflation is still of concern. However, we still have to be
wary as the twin deficits of budget and the balance of payments
[which is still growing] as these mean that the USA is very
dependent on external parties buying dollars.
Momentum, purchasing parity and rising interest rates support
my inclination for further strengthening in the US$ 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 £
Last week it was 2.333, today 2.383ish The Aus$ is tracking the
US$. 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 2.03 at the start of the week and 2.05 at the end.
The Canadian $ is very strong at the moment.
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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