The Pound has accelerated further to reach a nineteen month high on the Euro. At a current mid-market rate of 1.220, this is a great time to make a Sterling to Euro exchange or pre-book in any transfers at this rate using a forward contract.

Spanish debt auctions are playing a key role in currency shifts this week, following on from the role that difficult-to-achieve Spanish budget targets have played in making currency investors nervous about the health of the Euro-zone. The first Spanish debt auction earlier this week, went smoothly. With the UK strongly exposed to problems in the Euro-zone, the success of the first auction helped Sterling to maintain its strong position. This includes a rise to a two week high on the US Dollar to a rate of 1.602 as investors became more keen to buy currencies other than the ‘safe’ US Dollar.

UK data has also been positive this week in helping to fuel the Pound. UK inflation rose to 3.5 percent in March - helping to suggest that the Bank of England will not need to inject more stimulus (quantitative easing) into the economy next month which would be negative for the Pound. There was even more evidence for this on Wednesday when the Bank of England minutes from the last policy meeting revealed that policy members voted 8-1 against further stimulus. Significantly, this meant that one policy member in particular, Adam Posen, had changed his mind since the last meeting making it much more unlikely than more stimulus will be introduced and pushing the Pound even higher.

Sterling’s strong position will be tested today however when Spain holds another auction to try and sell ‘longer-dated’ debt. This is a more difficult auction for Spain than the one held earlier in the week. Should this go well however, Sterling could find even more strength particularly on ‘safe’ currencies such as the US Dollar.

Other events that could have an impact on exchange rates before the end of this week, include events and statements made at the G20 meeting today, as well as European consumer confidence statistics and figures on US home sales. Retail figures from the UK on Friday are expected to be fairly disappointing so bear in mind that this could influence Sterling’s currently robust position. Feel free to give me a call if you’d like me to keep an eye on rates for you this week.

For further advice on how to save thousands on your property purchase compared to the bank, protect yourself from currency movements or set up regular mortgage transfers, get in touch with the dedicated Property Secrets currency specialist: Nigel Hodges of Currency Solutions on +44 (0) 207 740 0000 or by clicking HERE to leave an enquiry.

Sterling has re-cooperated from the seven week low against the US Dollar that I reported in last week’s blog and held its position against the Euro. It was a busy week with many economic events taking place against the increasing rumble - fast becoming a deafening roar - of the Euro zone crisis.

To start with the UK and Sterling. Data painted a slightly healthier view of the UK economy showing that house prices edged up and mortgage approval rates hit their highest in two years. The big UK event of the week however was the Chancellor’s autumn budget report.  This slashed growth prospects for the UK with GDP growth in the UK now expected to be 0.9 percent in 2011 and 0.7 percent in 2012, well below the previous predictions of 1.7 percent and 2.5 percent.  The report also raised Government borrowing targets. Taking all this into account, it may be a surprise that Sterling did not plummet.

However, the Chancellor also outlined the ways that the problems will be tackled. The report suggested that tougher austerity measures will continue for longer. This may help to safe-guard the UK’s triple A credit rating and encourage the Pound to continue to be used as a ‘safe-haven’ currency as the Euro enters increasing turmoil. Sterling starts the week at a rate of 1.163 against the Euro and 1.563 against the US Dollar.

Moving on to the Euro, you can’t have missed the hype over problems in the Euro zone over the past week, but just to re-cap some of the major developments; manufacturing fell to its lowest levels in twenty eight months, unemployment grew and Italy sold debt at historically high yields which has strengthened anxiety that other Euro-nations won’t be able to sell their debt. The fact that European leaders are failing to negotiate a way to handle the crisis explains why Sterling is managing to hold against the Euro. Although the UK is looking increasingly likely to return to recession and is itself vulnerable to what is happening in Europe, a strict austerity plan is being managed whereas chaos is seemingly ensuing in Europe. All eyes will be on this Friday’s European summit which may reveal whether European leaders have managed to agree an approach to stem the crisis.

The US Dollar and other major safe-haven currencies are continuing to benefit from the chaos in Europe. There was also better news for the US economy this week as unemployment dropped. Sterling managed to re-coup some of its recent losses on the Dollar this week however if you are investing in US property and will be needing an exchange into Dollars, it’s important to remember that the position against the Dollar is still very fragile. The Dollar is likely to remain a safer choice for currency investors than Sterling throughout the Euro crisis. Ratings agency Fitch also warned on Tuesday that the UK Government needs to be taking consistently pro-active austerity steps to ensure that the UK doesn’t lose its triple A credit rating. If this were ever to happen, the Pound would be very likely to weaken.

Coming up this week are the monetary policy decisions from the UK and Europe on Thursday. Should any more quantitative easing be introduced in the UK, Sterling could become a little shaky. The UK trade balance on Friday could also make Sterling vulnerable if it indicates worse deficit trade figures than officially forecasted. If you are looking at property investment in either New Zealand or Canada, look out for New Zealand’s interest rate decision on Thursday and Canada’s interest rate decision on Tuesday which may affect exchange rates. Other than that, all eyes will be tuned to ongoing events in Europe and whether leaders can reveal a positive plan as the EU summit starts on Friday.

With so much going on with global markets at present, it can understandably be a very anxious time for anyone wanting to make a currency transfer. Please feel free to discuss any upcoming transfers you have with me whether they be due in the next few weeks, months or years.

For further advice on how to save thousands on your property purchase compared to the bank, protect yourself from currency movements or set up regular mortgage transfers, get in touch with the dedicated Property Secrets currency specialist: Nigel Hodges of Currency Solutions on +44 (0) 207 740 0000 or by clicking HERE to leave an enquiry.

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The situation in Europe is continuing to dominate currency markets. I reported last week how currency investors were continuing to give Sterling ‘the benefit of the doubt’ against the Euro as it had managed to hold its recent highs against the currency – rather than becoming susceptible to the chaos in Europe itself due to the UK’s own close links with the Euro-zone.

This is still just about holding true. Sterling dropped overall by a very minimal 0.16 percent on the Euro meaning that we start this week at around a mid-market rate of 1.166. More pressure was put on the Euro last week as Italian borrowing costs soared, Fitch ratings agency downgraded Portugal and concerns heightened over a lack of progress between European nations on how to temper the Euro zone debt crisis.

Although this helped to ensure that Sterling maintained its position on the Euro, it had the adverse effect on Sterling’s position against the Dollar (as well as all other ‘safe haven’ currencies such as the Japanese Yen). Sterling plummeted by a huge 2.31 percent on the Dollar over the course of the week to a seven week low. This means that we kick off this week with Sterling at a mid-market rate of 1.543 against the US currency. If you have US Dollars to transfer back to Sterling this is fantastic news about the way the markets seem to be heading – however if you need a Sterling to Dollar transfer in the next few months, it may be a good idea to speak to me about the protective measures you can take to safeguard yourself from further drops.

This fall against the Dollar happened despite some improvements in key UK economic data last week – figures for UK mortgage approvals and the Government’s public borrowing came in better than expected. Similarly, the Bank of England minutes revealed that no more policy makers had yet voted for another increase in quantitative easing to shore up the economy which should have helped to ease concerns that this will happen as soon as some thought. This all confirms the overall picture at the moment, that the global economy and in particular, developments in Europe are dominating currency movements, more than internal economic news from the UK itself.

Saying this however, next week offers an interesting mix of economic events and news. Euro-zone finance ministers are meeting again to discuss the bail-out fund but the chances of them making a significant announcement is not very high. It may be therefore that Sterling can manage to hold against the Euro if lack of progress in Europe remains the major concern.

UK events however may also be thrust further into the limelight next week, with the autumn budget report due. This is expected to outline the challenges ahead for the Government and lower expectations for how well the UK may meet its deficit targets. This could be a firmer signal to investors of troubles inherent in the UK economy and put even more pressure on Sterling against the Dollar and other safe haven currencies that are rapidly building strength due to the uncertainty over the Euro zone. Hometrack, Nationwide and Halifax house prices are also coming out over the course of the week which could highlight further weakness in the UK property market and have a negative impact on Sterling.

For further advice on how to save thousands on your property purchase compared to the bank, protect yourself from currency movements or set up regular mortgage transfers, get in touch with the dedicated Property Secrets currency specialist: Nigel Hodges of Currency Solutions on +44 (0) 207 740 0000 or by clicking HERE to leave an enquiry.

Instantly Download Currency Secrets - our 31 page guide 100% FREE TODAY!