Sterling has moved up again on the Euro since last week’s blog. The Pound has inched close to a three and a half year high at times throughout the past week meaning that we start this week at a rate of 1.244 on the Euro as the Pound moved up by 0.79 percent overall on the single currency – something that you might want to take advantage of if you have a Sterling to Euro transfer to book.

The weak Euro is largely due to the aftermath of the French and Greek elections. The political uncertainty in Greece in particular, where it is not clear if a coalition Government can be formed, is calling into question whether austerity measures can be pushed through that are needed to stabilise the Greek economy and limit the damage of its debt to the rest of Europe.

Although this is helping Sterling to really gain on the Euro, it is simultaneously weakening against the US Dollar which is benefiting from all the uncertainty due its status as a ‘safe-haven’. The Pound has fallen by 0.5 percent on the US currency over the past week to a mid-marker rate of 1.607.  The US Dollar also received a push at the end of the week as JP Morgan, one of the biggest US banks, reported a 2 billion Dollar trading loss, making even more investors run to the safety of the Dollar.

Last week’s Bank of England monetary policy decision resulted in UK interest rates being held at 0.5 percent and the quantitative easing total being held at 325 billion pounds.  Although it was widely expected that interest rates would stay on hold, recent GDP figures suggesting that the UK is back in recession, made some predict that quantitative easing would be increased to help stimulate the economy. The decision not to do so, has helped to keep the Pound supported for now.

Currency investors will be in a better position to analyse the UK economy when the Bank of England publishes its quarterly inflation report on Wednesday this week. This may bring some movement to exchange rates as the Bank’s forecasts on growth and inflation are likely to come under close scrutiny – particularly after the recent negative GDP figures.

If you have a currency transfer to make involving Sterling therefore, it may be worth keeping an eye out on movement this week and seeing if the inflation report makes an impact. The current position of the Pound is still precarious also due to the threat of damage to the UK economy because of its close trading links with the Euro-zone. Don’t forget it’s possible to book the present exchange rate for a transfer in the future using a ‘forward contract’ to reduce risk and give you certainty about the exchange rate you will achieve.

As well as the inflation report, key events next week include the UK trade balance figures on Tuesday as well as European GDP figures. Wednesday also sees UK unemployment data which coupled with the inflation report, will give currency investors an insight into the overall health of the UK economy and could bring some movement to the Pound.

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.

The Pound has now hit a staggering 22 month high on the Euro. We start the week after the bank holiday, with Sterling at a mid-market rate of 1.239 on the Euro as the past week’s elections in Europe drag down confidence that the necessary austerity measures will be implemented to stem the European debt crisis. This is fantastic news for any property investors needing a Sterling to Euro transfer who may want to consider booking transfers in at these rates – some of the strongest we have seen for two years.

The French and Greek elections have not incited confidence that planned austerity measures will be followed through – particularly in Greece where the two main parties failed to secure a majority. This has thrown into doubt the future of the international bailout programme – and allowed Sterling, which has been performing well over recent weeks, to take the single currency even more by storm.

Sterling did not perform as well on the US Dollar over the past week. The Pound dropped by 0.71 percent overall to a mid-market rate of 1.615 against the Dollar – although weak non-farm payroll employment data in the US on Friday helped to prevent Sterling from dropping lower.

Overall, Sterling did well over the past week given that some of the key economic data from the UK was not as good as expected in the areas of manufacturing, construction and services. Although data was weaker than expected in these areas however, the PMI readings were still above 50 – a reading of above 50 indicates growth rather than contraction, indicating that the UK economy is still growing. Compared to European data at this stage therefore, the UK is coming out in a positive light making the Pound the more preferential currency for investors.

The key event to look out for this week is Thursday’s Bank of England monetary policy decision. Although it’s widely expected that interest rates will be kept on hold, policy makers will announce whether there will be an increase to monetary stimulus in the UK. This is not expected, but since the recent UK GDP figures were so disappointing, markets will be keen to have this confirmed on Thursday. An announcement not to introduce more monetary stimulus, could see Sterling push even higher.

This event however, will be set against a backdrop of other significant news on Thursday. This includes the European Central Bank monthly report and the US monthly budget statement which will give further insight into the health of these two economies. There is also trade balance information from the UK and the US. This will indicate how well or not the UK is minimising its trade deficit and could therefore also affect the Pound.

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.

Yesterday, the keenly awaited UK annual budget was perceived as largely neutral for the Pound, with major highlights being the wide ranging tax reforms, focus on reducing the budget deficit and public debt and an upward revision to the U.K 2012 economic growth forecast. Meanwhile, following yesterday’s dovish BoE’s minutes, data just out indicates that retail sales grew less than expected for February.

Data released this morning revealed lower than expected German, French and Eurozone manufacturing PMI. This comes on the back of dismal Chinese manufacturing data earlier today. All eyes are on jobless claims data in the U.S. which is expected to show that the labour market continues to recover.

Pound Sterling – UK Markets

The Pound has moved higher against the Euro this morning following dismal manufacturing data across the Eurozone. Meanwhile data just out indicates that the annual retail sales grew less than expected by 1.0% for February, compared to a 2.0% rise posted for January.

In the much awaited annual budget yesterday, the Chancellor, George Osborne, proposed wide ranging tax reforms. The Chancellor cut the top rate of income tax, reduced corporate tax and scrapped age-related allowances. The Office for Budget Responsibility indicated that the UK economy may avoid a technical recession and upwardly revised the current year growth forecast. On the fiscal front, Osborne indicated that the budget deficit is falling and is forecast to reach 7.6% next year and has estimated public sector net borrowing to reduce to 1.1% of GDP by 2016-17.

During yesterday’s session, the Pound witnessed marginal pressure against the US Dollar after data revealed a higher than expected public sector net borrowing for February. Adding to Sterling’s woes, the BoE’s March meeting revealed that two Monetary Policy Committee members voted to expand the central bank’s asset purchase program by £25 billion. However, all members voted to retain the benchmark interest rate at a record low of 0.5%.

US Dollar – US Markets

The U.S. Dollar has strengthened against the majors as fears surrounding the global economy resurfaced. Data released earlier today indicated deterioration in the manufacturing sector activity in Germany, China, France and Eurozone.

Yesterday, the nation’s home sales for February failed to match market estimates. Meanwhile, the Fed Chairman, Ben Bernanke, cautioned that higher energy prices could affect the nation’s consumer spending and could thereby weaken the US economy.

Markets expect the positive news flows from the job market to continue with the weekly jobless claims due later today expected to remain stable at a four-year low. Markets are also expected to track the house price and leading index data for further clues over the state of the US economy.

Euro – European Markets

The Euro has reversed its initial session gains against the majors and is trading lower after data indicated that German and French manufacturing activity unexpectedly contracted for March. Additionally, the contraction in manufacturing activity in the Eurozone also accelerated. This data comes on the back of concerns of a slowdown in the Chinese economy after data released earlier today indicated that Chinese manufacturing PMI slipped to the lowest level since March 2009.

However, earlier in the session, the Euro had registered gains against the majors after the ECB President, Mario Draghi, reportedly opined that the worst of the sovereign debt crisis is over and the situation has stabilised.

On the macro front, the Euro is likely to track the region’s industrial new orders and consumer confidence data scheduled for release later today.

Other Currencies – Highlights

The Kiwi Dollar has declined against the US Dollar following the release of New Zealand’s GDP report which indicated that the nation’s economy grew 0.3% in the fourth quarter of 2011, slower than the market consensus of a 0.6% rise. This has fueled market speculation that the central bank may keep the key interest rate unchanged in the near future.

The Kiwi Dollar also came under pressure after HSBC manufacturing PMI revealed that the Chinese manufacturing sector contracted for the fifth successive month for March. Moreover, weak manufacturing data across the Eurozone has weighed on risk appetite.

Those looking to purchase property in Europe will be disappointed to hear that the Pound has fallen back below the 1.20 level on the Euro to a mid-market exchange rate of 1.190. This occurred as news spread last week that that progress was being made in Greek debt-swap talks and a deal is soon to be struck to help prevent a Greek default, boosting confidence in the single currency. Sterling’s fall of 1.23 percent on the Euro throughout the week was also fuelled by the fact that the UK was revealed as being on the brink of recession when GDP figures revealed that the UK economy contracted by 0.2 percent in the last quarter of 2011 rather than showing any signs of growth.

Against the US Dollar on the other hand, Sterling hit a five week high, achieving a mid-market exchange rate of 1.573 percent. Good news for anyone looking to invest in American property. Again, this movement was largely due to events in the Euro-zone, as an increased flow of funds into the Euro, generally comes from a withdrawing of funds from the US Dollar. The US economy did also suffer its own bad news on Wednesday as the US Federal Reserve announced that it would keep interest rates low until 2014 and introduce more monetary stimulus measures. US GDP figures revealed that the economy grew by 2.8 percent in the last quarter of 2011 – which was lower than the forecasted 3 percent.

What is the long term currency picture going forward? It is likely that events in the Eurozone will continue to dominate the currency markets. Although the Euro was pushed up last week due to news of the Greek deal, its position is very precarious due to uncertainty in other Euro nations. There was news last week that the Spanish unemployment rate hit 22.58% in the fourth quarter of 2011. Portugal also remains a concern, with speculation that the nation may need a second bail-out. If you need a Sterling to Euro transfer though, it really is a case of monitoring the ongoing situation week by week to book your transfer at the best time. It’s possible to discuss a target rate of exchange with me so that I can monitor the markets on your behalf and alert you when we reach your target rate. You can alternatively fix an exchange rate in advance to protect yourself from currency volatility and reduce risks by affording yourself the certainty of knowing the cost of your foreign investment to you in Sterling as the exchange rate is pre-booked.

Movement in the Pound in the short term is likely to also revolve around whether the Bank of England will increase quantitative easing measures to shore up the UK economy. The Bank of England minutes from the last policy meeting released last week revealed that policy members are showing increasing support for such a move which may come in February. If this looks increasingly likely, the Pound may well experience some downwards pressure.

One key way that we will be able to tell whether more quantitative easing is likely is by the PMI figures released from Wednesday onwards this week in the UK. They will reveal how well the UK Construction, Services and Manufacturing sectors are doing and help indicate whether there really is a real risk of the UK returning to recession. Should the PMI figures reveal poor growth, it is much more likely that the Bank of England will look to introduce quantitative easing soon, and therefore likely that the Pound may suffer. UK mortgage data on Tuesday will also be revealing.

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.

It’s excellent news for anyone needing a Sterling to Euro exchange with the Pound hitting a nine month high on the single currency. Last week, we saw a slight rise from Wednesday onwards as interest rate decisions came out from the UK as well as Europe. The later scrutiny of the European summit helped to rocket the Pound up a mid-market rate of 1.19 on the single currency as investors sought an alternative to the risky Euro. If you have an upcoming Sterling to Euro transfer, now is the time to think about whether you want to fix an exchange rate whilst Sterling is experiencing this momentum.

As expected, interest rates were held once more at 0.5 percent by the Bank of England and no action was taken to further quantitative easing. It was a different story in Europe, where the European Central Bank decided to cut rates by 25 basis points to 1 percent. Although this shows an attempt to help the suffering European economy, markets seemed to take the view that this move was disappointing and not at all drastic enough given the overwhelming debt problems - meaning Sterling started to push up on the single currency.

Events at the European summit then hit the headlines as an attempt to secure changes to the EU treaty failed as the 27 member states did not agree on all the new measures – it has been widely publicised that the UK refused to go along with all of the propositions. These moves did not go as far as markets were hoping to help shore up the European economy. To add insult to injury, Standard and Poor’s rating agency then warned of a possible credit rating downgrade to fifteen of the Eurozone countries and most other ratings agencies announced their plans to review all Eurozone nations in early 2012. Needless to say, the Euro lost strength and the Pound once more took advantage.

This could change however and we could see a downturn in Sterling against the Euro if more agreements about the bailout fund and financial markets come to light (particularly if changes are announced that may be seen to be harmful to the UK financial sector’s health), so it’s very wise to stay up to date with the situation as it progresses.

Unfortunately for those wanting to invest in the US property market, Sterling has moved in the opposite direction against the US Dollar at the start of this week. Again the situation is unpredictable - at the same time as there is a chance that future agreements about action to tackle the Eurozone debt crisis could push Sterling down against the Euro, they may well help Sterling to gain on the ‘safe’ US Dollar as risk appetite increases. Feel free to give me a call if you would like me to watch the exchange rates on your behalf through this turbulent time or discuss how you can protect yourself from fluctuations.

There is also some news for anyone who already owns a property in Hungary and has an outstanding mortgage. You may have heard that due to a new piece of legislation passed by the Hungarian Government, it is now possible to pay off the outstanding mortgage amount at a preferential fixed rate of exchange in Hungarian Forint, providing the funds are available to do so - if you haven’t been contacted about this possibility and would like to find out more, please give me a call to discuss.

In summary, the situation at the moment is that the Pound has surged up on the Euro whilst remaining under pressure on the Dollar. The position against the Euro is certainly still precarious - the fact that more quantitative easing is likely to be introduced at some stage means that there is still a strong air of caution. Next week’s Bank of England minutes could prove damaging for the Pound if they reveal that there is growing support amongst the committee members to introduce more quantitative easing soon.

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.

In last week’s currency blog, I commented on how nothing seemed to be able to stop the Euro in its tracks with the currency reaching the highest levels against Sterling in six months despite all sorts of debt issues being reported in the press. Well, there has been nothing like a major shift but the Euro has finally teetered down from its highest points and shown a little more vulnerability.

Those ongoing sovereign debt issues from the struggling Eurozone nations (known as the PIGS – Portugal, Italy, Greece and Spain) are creeping out of the woodwork. This is happening at a time when the initial excitement over the European interest rate rise which is what has been responsible for keeping the Euro higher has worn off – but only a little. With Ireland’s credit rating being downgraded and rumours circulating that Greek debt needs restructuring the Euro has dropped mildly against the Pound.

This will be of interest to those UK based buying property investments in Europe. It is definitely worth getting in touch with me for a quote on your exchange and to discuss target rates – and we can keep a firm eye on how this situation pans out. All in all, the Euro has still grown by 1.76 percent on the Pound over the course of the last month which equates to a few thousand Pounds on the average price of a property. This is why it’s so important to be aware of what movements are happening and book the transfer in at the best time – a forward contract allows you to do this and know the cost in Sterling even if your completion does not take place for months.

For those of you exchanging money into Dollars and other major currencies – Sterling is still in a better position against the US currency than the Euro although last week‘s less than forecast UK inflation figure has created some weakness which may continue with Sterling. The inflation figure has suggested to markets that the UK interest rate rise may not now arrive until nearer to the Autumn which is causing Sterling to weaken.

What is the key economic event to look out for this week? Wednesday’s Bank of England minutes are not expected to reveal any surprises, but should they show that any more members voted in favour of an interest rate hike this time round, then I would expect Sterling to strengthen.

For further advice or 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) 20 7740 0000 or by clicking HERE to leave an enquiry.