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 is in a very similar position to that which I described in my last blog – still holding within sight of a ten month high on the Euro but continuing to drop off against the US Dollar. We start the Christmas week with Sterling at the mid-market levels of 1.191 on the Euro and 1.554 on the US Dollar.

Currency movements are still being completely dominated by the situation in Europe. This means unfortunately that Sterling’s rise on the Euro is not being attributed to perceived strength in the UK economy (although UK retail sales data this week was positive) but rather that investors are seeking alternatives to the risky Euro. This explains why Sterling has managed to gain an impressive 1.77 percent on the Euro over the course of the past week whilst dropping by 0.8 percent on the Dollar which is perceived as much ‘safer’ than Sterling. This is also reflected in the Euro’s drop against the Dollar which is much larger than that against Sterling – a huge 2.57 percent over the course of the past week.

If you are going to need a Sterling to Euro transfer therefore, the message is still very much that there is no certainty about how long this position of strength may last. The Sterling to Euro 1.20 rate is also a key area of resistance that may be difficult for Sterling to break through. On the other hand, with nearly all the credit rating agencies downgrading European banks, and reviewing the ratings of nations such as France, it may be that if the European situation continues to deteriorate, the Pound could gain even more. This will also largely be dependent on whether robust new agreements are formed between political leaders about the Euro zone bailout fund and financial mechanisms to help restore the health of the Euro zone. At present, the main result of the hype in the press about the UK veto-ing changes to the treaty, and lack of unity between nations, is likely to be continued downwards pressure on the Euro.

The Pound hit a two month low against the US Dollar on Wednesday and it will again be news in the Euro-zone that continues to be the main driver of this currency pairing. There will however be a bit more of a spotlight on the UK this week with house prices coming out on Monday and the big event – the Bank of England minutes from the last policy meeting revealed on Wednesday. If this reveals that there is growing support among policy makers to introduce more quantitative easing in the Uk, it could be that Sterling loses some momentum on the Euro. European economic confidence figures and UK GDP figures on Thursday could also bring some movement.

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.

To start with the good news first for those purchasing property in the US, Sterling has re-cooperated against the Dollar since my last blog a week ago. Last week, I reported how the Bank of England’s announcement about reintroducing more quantitative easing to the economy had de-railed Sterling against the US currency. The past seven days have seen something of a reversal however, with the Pound gaining by a huge 1.68 percent on the US currency. This means that we start the week at a rate of 1.581 against the Dollar – this is the highest rate seen for a month and the rate of growth achieved by the Pound on the Dollar is the best seen since January.

Will this good fortune against the US currency last? Unfortunately, Sterling has grown on the Dollar in spite of the economic data coming from the UK over the past week rather than because of it. (Unemployment for example, was revealed to be at the highest levels since 1992 in the UK last week which is a very poor indicator for the way the economy is going). There was a shift in the global currency markets mid-week; this was due to the necessary approval by Slovakia for the European Financial Stability Facility. This development re-ignited the currency markets’ confidence in the Euro and saw a turn-around as risk-appetite once again soared...

This brings me on to the bad news which is for those Property Secrets clients interested in Sterling’s performance against the Euro. Although the increase in risk appetite saw funds drain away from the US Dollar and allow Sterling to make gains, it also caused the Euro to soar. For this reason Sterling simultaneously fell against the Euro by an enormous 2.05 percent over the week. This means that we start this week at a level of 1.140 against the single currency.

Most economists are still not seeing much hope for Sterling in the long term despite its climb on the US Dollar this week. The decision by the Bank of England to introduce more Quantitative Easing is expected to continue to eat away at the currency. The Pound for example, has already lost four percent against the Australian Dollar since the announcement. Sterling was lucky this week, reaping the rewards of increased risk appetite against a handful of currencies, but against the Euro is likely to continue to suffer. As European officials announce further levels of agreements about how to tackle the Euro zone crisis, investors are expected to take the chance to choose the single currency over the Pound. If you have any concerns about how a weakening Pound may affect your property investment, then feel free to give me a call to discuss the trading options available to you.

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.

Last week was not a happy seven days for the Pound which fell overall by 0.58 percent against the US Dollar and a significant 1.59 percent against the Euro.

There was a particularly gloomy moment for Sterling last week when it touched the lowest levels so far in 2011 against the Dollar. A number of factors have been at play in Sterling’s demise, not least, a lot of talk about quantitative easing – a method of helping to reignite the economy that the Bank of England are thought to be drawing ever closer to. This was intimated by both Bank of England policy maker Martin Weale and referred to by Business Secretary Vince Cable last week.

Sterling was also not helped by the fact that currency investors took flight to the safe haven of the US Dollar in the early part of last week as rumblings over European debt sales and credit ratings caused currency investors to be nervous. The speculation over a possible Greek debt default did also cause the Euro to drop to a six month low on Sterling, but the single European currency then picked up over the rest of the week. This was due to certain progressions helping to calm nerves such as the news that China would buy up Italian bonds.

Most of the data coming from the UK last week did not help to spread much hope that Sterling might pick up. Although retail sales were not quite as poor as expected, the news of rising unemployment, lower wages and rising inflation expectations have not painted a particularly optimistic picture of the UK economy. This is all making the chance of monetary stimulus in the form of quantitative easing even more likely, with most wondering not if but when it will happen. This is likely to make Sterling less attractive to investors going forward and there are likely to be regular jitters when the Bank of England announce their monetary policy decision each month.

UK based property investors should therefore be cautious as the Pound doesn’t currently have much on the horizon in terms of a life line. Although the enormity of problems in the Eurozone could see the Sterling Euro rate improve, it’s equally as important to remember that the UK is also vulnerable to these problems with Europe being a main trading partner as well as there being strong financial links with UK and European banks. Don’t forget that it’s possible to book yourself into a rate of exchange prior to your money transfer to protect yourself from the uncertainty of fluctuations.

Key data and events to look out for this week include the Bank of England minutes on Wednesday which will reveal the voting and discussions that took place at this month’s monetary policy meeting – this could bring quantitative easing event more into the spotlight if discussions about this feature on the minutes. There are also UK house prices and consumer confidence figures on Monday as well as UK public net borrowing on Wednesday.

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.

Last week I reported Sterling’s recent movements - gaining on the Euro whilst dropping against the US Dollar. This movement has extended throughout the past week as the markets saw even more intensity – against the Dollar for example, Sterling tumbled by an astonishing 2.05 percent.

Sterling managed to keep climbing against the Euro to levels of 1.163, the strongest rates seen in over three months. This ascent gathered momentum from Thursday onwards when interest rate decisions were announced by both the Bank of England and the European Central Bank. Whilst both decisions were in line with expectations in terms of holding interest rates, Sterling found support from the fact that some economists had expected new quantitative easing measures to be announced by the Bank of England to help shore up the economy - this did not materialise as the economy was evidently believed to be robust enough for now which helped support the Pound.

Trichet’s comments following the interest rate decision in Europe on the same day did also not help the single currency as he identified ‘intensified downside risks’ to the economy with some predicting that European interest rates may have to be brought back down at some stage. The resignation of European Central Bank Executive Board Member Juergen Stark, reportedly over policy, also generated uncertainty and provoked more Sterling weakness.

Anyone interested in the Swiss Franc, will be astonished at some of the movement throughout last week. The currency plunged by 10 percent against the Euro as Swiss officials announced plans to intervene in order to artificially bring down the value of the currency and introduce regulations about how much it can grow against the Euro. This made the Swiss France unattractive to investors.

Sterling steadily fell against the US Dollar throughout the week to levels of 1.588. Confidence grew for the US economy as President Obama announced plans about a programme to stimulate jobs with an injection of 300 billion Dollars. There was also positive news concerning the US trade deficit which fell by 13.1 percent in July which was much better than expected.

The mixed picture of Sterling’s current movement, with the Pound growing against some currencies, whilst falling against others, reveals that the Pound itself has little internal strength at present. If you have Pounds to transfer therefore you should consider the current rates as very precarious. The strengthening position against the Euro is really under-pinned by weakness and problems in Europe. Although no quantitative easing was announced in this month’s UK monetary policy decisions, there is still a strong possibility that this could happen at some stage – and when it does we would expect Sterling to lose ground as the market is flooded with Pounds. It’s best as ever, to have target rates of exchange in mind, and make yourself protected against currency fluctuations. The second half of this week sees a wealth of data being released – from more UK retail data to CPI inflation data in the US. It may be another volatile 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.

The Pound has fared very differently against other major currencies over the past week so how this will affect any upcoming property investments will depend on the currency you need. Sterling lost 0.93 percent of its value against the Dollar but managed to gain by a very significant 1.06 percent on the Euro. This means that the Pound starts the week at the 1.62 levels on the Dollar and at the 1.14 levels against the Euro.

In truth, last week saw a fair amount of poor economic data coming out of the UK, Europe and the US so currency investors had to choose from a bad bunch – Sterling hit a three week low on the Dollar on Thursday after it emerged that manufacturing activity in the US was just slightly healthier than that in the UK. In the UK manufacturing shrank at its fastest pace for over two years with a steep drop in demand for exports. With more manufacturing figures due on Wednesday this week, it’s wise to see if these are once again negative and have an impact on Sterling.

The ongoing sovereign debt problems in Europe however are perceived as much more serious than any stagnant figures coming from the UK which therefore allowed the Pound to grow on the Euro throughout the week. Unemployment in the Euro-zone has now reached levels of 10 percent. Standard and Poor’s rating agency has also lowered their growth forecasts for Europe. It’s hopeful therefore that Sterling may continue to grow on the Euro throughout next week – this may well be dependent on figures at the start of the week that make the two economies easily comparable as PMI data on Services as well as Retail Sales figures are released from both the UK and Europe. This is before both the Bank of England as well as the European Central Bank announce their respective interest rate decisions on Thursday. This may well draw more attention to the fact that UK interest rates are expected to remain static well into 2012 or 2013 which is not good news for Sterling. However, European interest rates are similarly not expected to rise in the foreseeable future and in fact some speculation has started to circulate that they may in time need to be brought back down as the European economy struggles to cope.

There is some hope for Sterling re-strengthening against the Dollar this week as markets closed on Friday to a very negative report on US employment. We may therefore see some Dollar weakening at the start of this week. Both the US and UK trade balance figures are also due to be released at the end of the week which may help investors also interpret the health of each economy.

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 continued its month of ascent on other major currencies, with the past week seeing a 1.13 percent climb on the Dollar, as well as a small but none the less upwards move, on the Euro, by 0.11 percent. Significant change is afoot in the currency markets following some of the major events of the past two weeks – those interested in how Sterling will fare against the Dollar should be particularly alert to what is happening in the exchange rates as the Dollar becomes increasingly unpopular making it cheap for those in the UK to invest in American property.

The significant climb on the Dollar means that we start this week at the midmarket rate of around the 1.64 mark. The historic decision by Standard and Poor’s two weeks ago to downgrade the US credit rating is continuing to send shudders through the currency markets – whether the US currency will continue to be used as a ‘safe-haven’ currency by investors (one of the major factors that determines its strength) remains to be seen. The Dollar became even more vulnerable when early last week, the Federal Reserve announced that US interest rates would be maintained at the minimal 0 – 0.25 percent level well into 2013. This is another factor which is likely to ensure a weak Dollar going forward.

Ongoing volatility in Europe affecting the stock markets, as well as reports of slower economic growth in Europe last week, allowed Sterling to gain on the single currency. German GDP for the second quarter came in lower than expected just when Europe could have done with some better news from their strongest economy.

The negative news coming from both the US and Europe has steered the Swiss Franc, another of the world’s most popular ‘safe-haven’ currencies, in to a relentless upwards climb as investors become wary of the Dollar – this is despite efforts taken last week by the Swiss National Bank to artificially intervene and weaken the currency. This is not good news for anyone wanting to invest in Switzerland, although if you have Swiss assets to sell on the other hand, now is a brilliant time in terms of exchange rates.

Sterling was therefore in demand last week – and this was despite some poor economic UK news, which managed to seem paltry in comparison to European and US events. The Bank of England minutes revealed that that the two ‘rate hawks’ of the monetary policy committee have joined the other seven members in voting to keep interest rates the same. This, as well as disappointing jobs data, did not affect Sterling’s ability to hit three month highs. Friday will be a significant end to the upcoming week with both US and UK GDP figures for the second quarter of 2011 being confirmed (and any revisions being announced). However, as the last week has taught, the volatility in the global financial markets, may continue to be the dominant factor and hopefully Sterling will maintain its current position. Speak to me with any queries on how to secure the current exchange rates for your transfer.

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.

Last week was volatile for the currency markets with a roller-coaster of events influencing exchange rate movements – first the US debt limit was extended, then moves were taken by the European Central Bank to buy back bonds as fears of the debt crisis engulfing Italy and Spain accelerated, and since the close of markets on Friday, ratings agency Standard and Poor’s has gone through with prior warnings and downgraded its rating on the United States to AA+.

What does all this mean for the international property investor who is interested in how the Pound is doing? Overall, Sterling dropped by 0.19 percent against the Dollar over the week and gained on the Euro by 0.54 percent. Movement was certainly erratic however, with the Pound in particular moving both up and down against the Euro in the early part of the week. The European debt crisis issues in the second half of the week allowed Sterling to capitalise on the single currency. The slight drop against the Dollar, can be put down to the Dollar’s use as a ‘safe haven’ currency by investors, as the panic about the spread of European debt between Euro zone nations hit the headlines.

These large-scale global events diluted the impact of internal economic news coming from the UK. Manufacturing PMI data early in the week was disappointing and yet another stagnant hold on interest rates at 0.5 percent on Thursday did not make for inspiring reading on the UK economy. Despite the fact that most economists are continually pushing back their expectations for when an interest rate rise will occur in the UK due to this kind of lacklustre data (with predictions having moved from summer 2011, to late 2012, to now even later – 2013) the Pound is currently still managing to keep up momentum from these external global events damaging confidence in the Dollar and the Euro. Looking at the month as a whole, the Pound’s strengthening has been consistent, with Sterling having grown by 2.31 percent on the Dollar and 2.78 percent on the Euro.

Although the agreement on the US debt limit also took downwards pressure off the Dollar last week, this may all change as markets assess the fact that Standard and Poor’s have now downgraded the US credit rating over the weekend. Some economists are therefore predicting we may see more downwards movement in the Dollar at the start of this week. Should the European crisis continue to escalate this week with more evidence coming to light of the flow of debt between nations, Sterling may also seize the opportunity to gain yet further on the single currency.

However, it will be important to look out for the impact of the inflation report and Bank of England Governor’s speech on Tuesday – Mervyn King sometimes has the tendency to talk down the UK economy which can have a negative bearing on 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.

Events in Europe and the US have continued to shape currency markets over the last week. Unfortunately, the Pound has not had quite such a heroic seven days on the Euro as I was able to report last week, when we cheered the 1.24 percent gain against the single currency. The last week has not seen such an extent of movement, but overall the Pound has toppled to lose 0.39 percent of the previous week’s gains as events took a turn in Europe and the terms of Greek debt were agreed on by European officials. With Greece having longer to now pay off its debts under new conditions, the immediate threat of default has been side-lined. Markets responded well to the plan with the Euro instantly starting to pick back up. Extra confidence in Europe was gained from the fact that it wasn’t just the terms of Greek debt that were agreed, but a reform to the EFSF as a whole, meaning it should be more flexible and effective in responding to and helping to prevent debt problems in European nations. Those needing Sterling to Euro transfers should bear in mind that although the past week has put heed to Sterling’s two week rally, over the past month as a whole, the Pound has grown by 1 percent on the Euro so we are far from the worst rates we have seen.

Those interested in how exchange rates will affect any upcoming property purchases in the US will be pleased to hear that the Pound did have a much better week against the Dollar to the tune of a 1.02 percent gain on the US currency. The ongoing wrangling between opposition leaders about whether to raise the ‘debt ceiling’ in the US (which needs to happen before the 2nd August to let the cash-strapped nation borrow more funds to add to its empty pot) has continued to dominate markets and allow Sterling to gain on the Dollar. It is worth noting that it was rumoured over the weekend that an agreement may be very soon approaching, so those wondering whether to fix into the current Sterling Dollar exchange rate may want to keep an eye on how this develops as there is a chance that once an agreement is reached, the Dollar could see some form of rally. Data from the US will also have a hand in this however, and the last week shows how patchy the economy is with poor US employment data hitting at the end of the week.

From the UK last week, the Bank of England minutes, actually had little impact on the Pound. They revealed that once more, support for a rate hike from within the committee was only by the same two members as has become the custom each month. Positive retail sales and the fact that net borrowing has reduced added a little more shine to the current view of the UK economy, however an interest rate rise, in truth, is still likely to be a long way off.

What is the picture for next week? Should the US reach an agreement on the debt ceiling, we could see some shifts take place so please speak with me if you would like me to keep you updated with whether your target rate of exchange is achieved – or rates move away from you meaning you want to minimise impact before they drop further. GDP figures on Tuesday from the UK will also be significant. Any sign of strong growth could push the Pound in the right direction but a low figure could sap Sterling.

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) 207 740 0000 or by clicking HERE to leave an enquiry.

Good news for UK based property investors purchasing overseas! The Pound has struck back over the past week, making the most of the damaging data and events that have unfolded in the US and the Euro-zone.

Sterling has finally edged back up to more acceptable levels against the Euro, starting the fresh week at the 1.14s – this could quickly accelerate depending on how much markets react when they re-open on Monday morning to the European stress test results that came out at 5pm on Friday evening. The Euro dropped all day on Friday as markets awaited the results to find out how many European banks had failed the stringent tests. Markets were expecting about fifteen banks to fail – the final result was that eight banks failed including five Spanish, two Greek and one Austrian bank. Therefore, the results were not quite as bad as expected so it will be interesting to see whether this will continue to pull down the Euro this week. The news in truth is not good for Europe when added to last week’s string of credit rating downgrades on various Eurozone nations – both Greece and Ireland suffered downgrades by credit rating agencies. With Italy only half-way through the process of passing its austerity measures, there is still a great degree of uncertainty about sovereign debt which is starting to reflect in the downwards movement of the Euro. Following weeks of Euro gains, Sterling has now had two strong weeks against the single currency – growing by 1.24 percent on the single currency last week, following a 1 percent increase the week before. The Euro also dropped to a severe low against the Swiss Franc to its lowest ever level. Anyone purchasing property in Europe should keep a keen eye on how the situation progresses this week as these are the best Sterling levels we have seen against the Euro in over a month.

The credit rating agencies also had their hand to play in allowing the Pound to appreciate on the Dollar last week by 0.5 percent. Both Standard and Poor’s and Moody’s agencies warned that they may downgrade the US AAA credit rating. This comes as the US is struggling to resolve its issues with its debt ceiling limit – the US needs the debt ceiling raised before the 2nd August to be legally allowed to borrow more money but President Obama and Congress are failing to reach an agreement on how this can be achieved. If measures are not agreed on by politicians before the 2nd August, the US would then be defaulting on its debt, which could bring some more serious damage to the Dollar.

Sterling therefore, stayed out of the limelight for most of last week with minimal economic data coming out of the UK– instead it quietly made gains in the shadow of events in Europe and the US. CPI inflation data on Tuesday was a little less than forecast but still well over the 2 percent target at 4.2 percent. The biggest internal UK event for Sterling this week will be the Bank of England minutes on Wednesday. Unfortunately, if they confirm expectations that an interest rate hike is not looking likely until 2012, or give any indication of more monetary stimulus being required, then the Pound could be more vulnerable from Wednesday onwards. This will of course also depend on how these big issues in the US and Europe continue to progress so feel free to give me a call and stay updated.

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) 207 740 0000 or by clicking HERE to leave an enquiry.

Volcano’s are not the only eruption to be causing a storm in Europe at the moment. A conglomeration of events appear to be taking place at present with the European Union facing a debt crisis that could bleed through Greece, Spain and Portugal. Also, at a push, Belgium and Italy. Take this and add to it the search for a new leader of the International Monetary Fund and Ash Clouds threatening to shut down European air space and you have a mind boggling series of events threatening to topple the euro.

Pound Sterling

Word has it that the government was meant to be making spending cuts for some reason. This may have something to do with the spiralling levels of debt that our nation is facing. However, with this in mind it appears something has gone wrong along the way. Current spending by the central government hit £54.1 billion last month, a 5 percent hike from this time last year. Furthermore, with the recovery plans predicting a snail-pace like return to normality it is no wonder that the Chinese downgraded UK’s credit rating from AA- to A+.

However, as the general consensus quite rightly stated yesterday, it’s time to move on from old cliché’s. Yes the UK is underperforming, but this may not be reflected in the markets. The bottom line is with the state of the Euro looking far more uncertain sterling is seeing short term gains against the single currency.

Dollar

Whilst the US has problems of its own, in the short term investors see buying potential in the Dollar which could see the currency strengthen slightly. The Dollar index reached a seven week high before reports due to be released tomorrow are expected to show that the economy is recovering at a faster pace and initial jobless claims decreased for the third consecutive week.

On the other hand, global fund managers are keeping long term bets against the US Dollar. Whilst the Dollar is expected to rally from time to time, low interest rates will force investors to seek alternatives to US Bonds.

Euro

The façade surrounding Greece could create a debate that could fill the broadsheets a hundred times over. However, as we speak Greece may be forced to sell up to 50bn euros worth of state owned assets to push forward its privatisation drive. If Greece were to default a complex domino effect would take place. If like many you have been wondering why surrounding nations are so keen to avoid this from happening the answer is simple. A default would hurt major French and German banks with Greek subsidiaries, potentially causing a crash in share prices.

Other Currencies – Highlights

In recent days we have been commenting on the yo-yo nature of the Canadian Dollar. However, reports today show that currency may be faltering as indicators suggest that the global economy may be faltering. The loonie as it is often known has weakened against 12 of its most 16 most-traded counterparts.

The South African Rand broke back against the dollar after two days of losses. Commodities rebounded from the biggest drop in nearly two weeks and Greece’s endorsed budget cuts helped push the Rand into a strong position.

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) 207 740 0000 or by clicking HERE to leave an enquiry.