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!

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.

It’s a despondent start to the new week for any UK based property investors as the Pound has lost out steadily to other major currencies over the past week. Sterling kicks off the week at the 1.12 mid-market level against the Euro and 1.63 against the US Dollar, having lost ground by 1.31 percent and 0.58 percent against the currencies respectively.

This was a sharp fall from the previous week when Sterling had reached some recent highs, in particular the best rates for three and a half months against the Dollar touching a rate of 1.66. Some analysts are suggesting that Sterling was actually over-priced throughout the previous week, as it reacted to bad economic events in Europe and the US, and was ready for a fall bearing in mind the ongoing lacklustre picture being painted of the UK economy. This was emphasised last week as it was revealed that British retail sales fell at their fastest pace in almost a year, consumer confidence edged down further in July and GDP figures for the second quarter were not revised upwards but remained at a measly 0.2 percent. Added to this was the fact that some speculation has started to circulate in the press, that additional quantitative easing may be required to help kick start the UK economy, with interest rates now not expected to rise until 2013.

The Pound therefore found itself under renewed pressure in a week where currency investors were all awaiting a large economic news event which lent more strength to the Dollar as the week progressed – this was the widely anticipated annual speech made by Federal Reserve Chairman Ben Bernanke on Friday. The crux of the anticipation for investors was whether Bernanke would announce another round of quantitative easing for the US to bolster growth (last year he announced the second round of quantitative easing). It was thought that any hint of a third round of easing would help sooth increasing fears about the US economy heading back into recession. In the event, Bernanke did not announce this but did concede that the Federal Reserve would meet for an extra day in September to discuss whether any additional ‘tools’ needed using to help stimulate the economy. It is possible therefore, that the Dollar strength seen throughout the last week may start to subside.

Key events to watch out for this week will be the run of PMI data in the UK which starts on Thursday, with the latest growth figures from the manufacturing and construction industries coming out before the end of the week. US unemployment and non-farm payroll data also at the end of the week could see some re-adjustment in the Dollar. As the European debt crisis rumbles on, following the purchase of more debt by the ECB last week, there will as ever be an element of uncertainty to how markets will react to the ongoing situation. Give me a call or register an online enquiry if you’d like me to watch the rates for 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.

In my last two weekly blogs, I had reported that at last the mighty Euro had begun to cave in to the widely discussed pressures of sovereign debt allowing Sterling to gain back some ground - whilst the Dollar had begun to strengthen considerably leaving Sterling behind.

The last week saw a change in tone with Sterling appreciating 0.2 percent on the Dollar and all in all remaining almost flat against the Euro, moving down by only 0.08 percent on the single currency albeit with a few twists and turns along the way. This was largely due to the fact that many fears surrounding the meeting of EU Finance ministers at the start of last week were expelled. Some worried that the arrest of Dominique Strauss-Kahn would lead to meeting delays or conclusions not being reached about the Portuguese bail-out. As soon as the green light was given for the Portuguese bailout however, some pressure was instantly taken off the Euro. There are still ongoing concerns that Greece will have to restructure its debt but the more severe downwards pressure that we have seen on the Euro the previous two weeks seems to have subsided for now.

This is not what those needing to transfer Sterling into Euros for a European property investment will want to hear. Sterling actually had some strong data last week. Apart from better retail sales spurred by the Royal Wedding and warmer weather, the news that inflation had risen in April to as high as 4.5 percent where only 4.1 percent was expected gave some help to the Pound – this is also the sort of data that could provide more ongoing momentum long term as it only adds to the pressure on the Bank of England to raise interest rates. However, the Bank of England minutes on Wednesday from the last policy meeting two weeks ago, revealed that there is still only stagnant support for a rate rise and it will take more votes to make this happen. Once more, the split in voting was three in favour of an interest rate rise against six who voted to maintain the interest rate at 0.5 percent. There was a time when economists were predicting the hike could come as early as May yet support is not growing.

The UK is still however streets ahead of the US where there is an increasing view that monetary policy will be kept loose for some time yet. This was particularly true this week where after two bounteous weeks of growth, the Dollar stalled in its tracks and reached a plateau as a raft of negative economic data swept in to counteract its rally. Poor data came in the form amongst others of a weak New York economic index, housing starts falling by 10.6 percent, industrial production remaining flat where growth was expected and sales of existing homes also unexpectedly fell. It is now thought unlikely that the US will start to raise interest rates this year at all meaning that there is potential for Sterling growth on the Dollar as the months roll on.

Events to look out for this week will be public sector net borrowing in the UK on Tuesday revealing the state of national debt as well as all important GDP figures on Wednesday giving an overview of how well or not the first quarter really went.

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.

In last week’s blog, I reported that the time was ripe for booking Sterling to US Dollar transfers, with rates moving up towards 1.63. We are still in a relatively strong position against the US Dollar so anyone UK based buying property or sending funds to the US has not yet missed out.

Sterling rates against the Euro on the other hand, have swung down with the Pound at some of the lowest rates for five weeks against the single currency so this is a key time for those purchasing property in Europe to use me at Currency Solutions to help them keep an eye on the rates.

As has been widely reported in the press, rates between the Pound and the Euro are being largely driven by discussions over interest rates at present. Last week saw Trichet speak on behalf of the European Central Bank after the interest rate meeting – although interest rates were held at 1 percent as was expected, it was Trichet’s comments that sent the Euro higher. Whereas until last week, there was an expectation that a rate rise in the UK would come before a rate rise in Europe, the tables are now turning as Trichet suggested an interest rate rise in Europe might come as soon as next month.

The currency markets are never simple however and there are a multitude of other factors at play to be aware of in the Sterling Euro relationship. Whilst the hype over interest rates may continue to maintain the Euro’s strength in the near term, the sovereign debt problems with several Euro nations are still lurking in the background. Just this morning, the Euro was slightly shaken as news emerged that Moody’s Investors were downgrading Greek Government debt. With nations such as Greece trying to re-negotiate the terms of their debt with the European Central Bank, it’s important to remember that fiscal policy and debt tends to return time after time to haunt Europe – and indeed the Euro. The hype over an interest rate rise in Europe therefore may only compensate for some of the serious underlying problems in patches in the long term. The rate against Sterling will also depend on whether the UK interest rate hike – currently ear marked for early summer – is moved any further forward pending discussion at this Thursday’s rate meeting and the next set of Bank of England minutes in two week’s time.

Anyone who needs a Sterling transfer to Euros is best advised to speak to me at Currency Solutions to discuss target rates and protecting yourself from volatility. If you have Euros to bring back into Sterling, then now is a great time to book the transfer and take advantage of the rates.

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.

As has become the norm recently, Sterling has been having a volatile time.

No sooner did poor GDP figures at the end of last week send the currency lower, than positive mortgage approvals figures so far this week caused the currency to accelerate against other major currencies – in particular the rate against the US Dollar has become particularly attractive, with Sterling hitting the 1.63 interbank rate against the US Dollar so far this week.

This is also due to the US economy being put under a microscope this week and compared to other global economies as the Governor of the Federal Reserve spends the week testifying and giving press conferences on the official outlook for growth. Unfortunately for the Dollar, the US is being seen as lagging behind other global economies. In particular, higher levels of inflation and price pressures are really putting on pressure for an interest rate rise in the UK and Europe whereas the US does not yet seem to be anywhere near as likely to make any sort of rate rise.

Closer to home for the US, the Canadian economy is also comparatively pushing ahead. The Canadian Dollar has inordinately strengthened in response to surging exports and a well above forecast level of GDP.

In Europe, markets are waiting for the interest rate decision this Thursday. Whilst it is more than widely expected that rates will be held this time round, many officials from the Central Bank have publically spoken about the need to seriously start considering raising interest rates. The interest rate ‘race’ between Europe and the UK is one of the factors bringing so much volatility between the UK and European currencies of late.

The final factor still casting influence is tensions in the Middle East. Whilst the initial affect of these tensions was to cause a flight to safety sending the Dollar higher, the main effect on currency is now stemming from the surge the tensions have caused in oil prices – with soaring oil prices now sending the Euro higher and knocking the US Dollar.

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.