| Currency | Rate Last
Week | Rate This
Week | | EURO | 1.477 | 1.472 | | CY£ | 0.857 | 0.855 | | US$ | 2.017 | 2.027 | | CAN$ | 2.131 | 2.138 | | AUS$ | 2.475 | 2.457 | | NZD | 2.873 | 2.944 | | CHF | 2.435 | 2.408 | | ZAR(Rand) | 14.455 | 14.692 | Charles's Thoughts: We still live in interesting times. The banks are very cautious about lending to each other as they are still unsure where the losses relating to the bad US home loans finally end up. Also the banks are having to hoard cash as they are likely to find it very difficult to offload all the debt they have taken on funding the numerous private equity deals we saw in the first half of this year. In the midst of this uncertainty the Bank of England took the prudent approach and kept interest rates on hold. The BOE did take an unusual step by making an announcement stating that they were concerned about the credit markets and thought this uncertainty would dampen inflation in the short/medium term and this has led the market to believe that increased UK interest rates are unlikely in the short to medium term. Since this announcement sterling has steadily lost ground against the Euro. The US$ is in trouble. Non farm payroll figures today showed a reduction [i.e. unemployment is on the up]. This was against market expectations [not sure why, it had to happen sometime soon!]. Is the US heading for recession? Will the rest of the world going to follow along? My guess for the first question is yes. For the second difficult to say as the Far East is still growing and becomes less dependent on the US by the day. But strangely the US has to go through tough times for the markets to regain confidence in the US$. However, this is unlikely to happen for a while. The Fed meets next week so we wait to see their thoughts and insights for the way ahead. The Euro is the main beneficiary in the current climate gaining against sterling. The European Central Bank did meet and the ECB held Euro interest rates. However the ECB did announce that it felt that interest rates were still too accommodative [i.e. too low] and therefore would need to be increased sometime. This increase is unlikely in the short term but was more bullish than the BOE's announcement on sterling. The Euro land economy still continues to move along nicely although it still has a degree of dependency on the US that means that it will be concerned about what is happening in the US. The New Zealand dollar continues to collapse. New Zealand finance companies seem to be a dying breed. Another one failed this week. No respite likely short or medium term. The carried trade using the New Zealand dollar is only for the foolhardy. 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: "We where put in a position of getting money to Cyprus quickly. Smart Currency were fantastic, got our money to Cyprus on time. At a good rate. As it turned out the property was a nightmare - thank God we had a good independent lawyer. Don't buy abroad without one." Richard Johnson, Grimsby 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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