| Currency | Rate Last
Week | Rate This
Week | | EURO | 1.477 | 1.471 | | CY£ | 0.858 | 0.855 | | US$ | 2.020 | 1.988 | | CAN$ | 2.133 | 2.108 | | AUS$ | 2.393 | 2.508 | | NZD | 2.712 | 2.883 | | CHF | 2.415 | 2.391 | | ZAR(Rand) | 14.482 | 14.758 | Charles's Thoughts: Sterling continues to be under pressure. The liquidity crisis is having far reaching consequences. The flight to safety has focused on the Yen, the Swiss franc and the US$ in the form of treasury bonds. UK news focussed on the Consumer Price Inflation figure for July of 1.9% being for the first time in a while less than the target rate set for the Bank of England of 2%. Also the minutes of the last BOE meeting were announced and they showed a 9 to nil vote in favour on keeping UK interest rates on hold. The market now believes that UK interest rates will be kept on hold for a while and is even wondering if the market turmoil will negate the need for a further increase. As I noted at the start, sterling is under pressure. The US$ has made further gains against sterling. US treasury bonds are considered as safe haven assets. Given the volatility in the market place we are also seeing overseas US investment funds flowing back to the US. We wait with interest to see where the US$ strengthening stops. The US economy still has some major problems so any short term and significant improvement in the US$ is likely to be curtailed by these problems. It was only a couple of weeks ago that the Euro pushed up to towards Euro 1.50. At one stage, at the start of last week, we were close to Euro 1.465. The ECB had made it clear that interest rates would be increased next month by 0.25%. However given the volatility in the market place and the need for the ECB to supply liquidity, the market is beginning to wonder if the expected increase in Euro interest rates will happen in the short term. However, we have to remember economically that Euro land continues to leave the UK in its wake. So if you see any respite for sterling against the Euro then it may make senses to look at it as a short term buying opportunity. The high yielding currencies, such as the Australian dollar, New Zealand dollar and South African rand, have been the most affected by the current market unease and as such the major losers. Previously investors had borrowed in low yielding currencies such as the Japanese yen and invested in high yielding currencies such as the New Zealand dollar. Suddenly all investors have headed for the exit at the same time and caused these currencies to weaken significantly. The Canadian dollar has held its own but it has some very strong fundamentals which will support it in the short term. Why is Currency Management So Important? Using a bank could cost you £3-4,000 per £100,000 transferred. Buying at the "wrong" time could cost you many £'000's more as rates can move as much as 3% in a very short period of time. Then add in transfer costs that the banks charge for sending and receiving funds and you could be looking at additional costs of £10,000 per £100,000 transferred. By developing a currency strategy and by working with a specialist currency broker these losses could be minimised if not eliminated. Smart Client Testimonial: "Smart were quick, efficient and left me totally at ease with my foreign transaction." Lionel Irving, Scarborough If you haven't opened a Smart account yet, call me on freephone 0808 163 0102 or fill out our online Account Form at: http://www.SmartCurrencyExchange.com/application.htm How much will a Property Cost? To estimate the cost of a property simply DIVIDE the price of the property by the appropriate currency rate noted above. But note this is based on the inter bank rate so the actual cost will be slightly more. 
Charles Purdy
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