Weekly Currency Note: 9th December 2005

Dear Charles,

Weekly currency note: 9th December 2005

Overview

Sterling had another good week and this time the US$
came to the party. An early Christmas present for those
needing to buy currency.

The Euro is at the top of its recent trading range and
the US$ has gone back up through the 1.73 level. 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.

Reminder

If you’re interested in buying a property in Cyprus there
is the 1st ever Cyprus Property Exhibit at the Alexandra
Palace (London) this weekend (10th & 11th December). On
Saturday, the hours are 10am to 8pm and Sunday 10am to 6pm.
For more information call 020 7272 8355 or 0777 159 8933.
[no entry cost]

I’ll be there along with some other Smart Currency specialists,
so if you’re going to attend, let me know and we can meet up.

Why is currency management so important?

One client bought at a time when the currency was peaking,
and even though his funds were not available for another ten
days, we were able to secure him an excellent rate. In the
space of those ten days he saved over £3,000.

That is why a currency strategy is so important. It 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 1.480ish and is currently 1.483ish.
At the top end of the recent tight trading range. 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 is 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 at 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 1.733.It is now 1.750. 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 £

The Aus$ is holding steady. Last week it was 2.315, today 2.333ish
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 2.01 at the start of the week and 2.03 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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