Currency Rates

EURO/GBP - 1.148
US$/GBP - 1.631
CHF/GBP - 1.694
CAN$/GBP - 1.690
AUS$/GBP - 1.782

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Comments: Sterling had its best day in 4 months against Euro yesterday (hitting 1.1498 at one point) as reports showed that consumer prices in the UK unexpectedly jumped to 0.6% in December and 2.9% since last year – the fastest monthly rise in prices since records began in 1997. With increasing price pressure, investors have speculated that the Bank of England will look to increase interest rates sooner than expected. Mervyn King, speaking at Exeter University last night, expected to see this short term spike in inflation dissipate in the medium term suggesting that he and the Bank are unlikely to rush to tighten up the monetary supply. We have the minutes from the Bank of England meeting today with investors looking for clarity on monetary policy. In addition, Unemployment data out today is expected to show that the UK labour market has turned a corner.

Germany was yet again in the spotlight and again compounded Sterling’s gain against the Euro as consumer confidence there and in the Euro region as a whole fell more than expected. In addition, another report showed that construction activity had dropped by 1.1% in Europe – again suggesting that monetary policy in Europe will have to remain loose for longer than expected. There is no real data out today aside from the German producer prices which came in worse than expected overnight - the focus however will remain on the UK as the data has the potential for some volatility.

The US Dollar had a mixed day yesterday, losing ground to Sterling on the inflation news, but strengthening against other currencies as investor confidence faltered a little in global stock markets and investors moved to ‘safe-haven’ US Dollar assets.

Elsewhere, Australian consumer confidence rose by 5.6% (the largest rise in 6 months) boosting expectations of further interest rate rises in February. Whilst New Zealand’s prices dropped 0.2% month on month, the year on year rise came in at 2.0% - a little worse than expected. This caused investors to amend their expectations and the NZ Dollar dropped off against other currencies.

Note: All rates are mid market inter bank and indicative at the point of publication.

To get an initial estimate of the cost of a property simply DIVIDE the price of the property by the appropriate currency rate noted above.