GBP – EUR + 0.82%
GBP – USD – 0.35%
GBP – AUD + 0.66%
GBP – CAD – 0.34%
GBP – NZD + 0.33%
Sterling gains back ground on Euro
Yesterday saw Sterling make a small fightback against the huge losses that we have witnessed over the past few months, gaining 0.82% by close of trading against the Euro due to two of Europe’s largest banks releasing data regarding funds they have had to write down.
UBS announced they had to write down an additional $19billion of funds, alongside Deutschebank, announcing they expected to write off a further $4billion themselves on the value of their loans and assets for the first quarter of 2008 - which was a lot larger than originally forecast, a sure sign that the credit crunch isn’t just affecting the U.S and U.K, and is certainly a global problem.
This prompted a decrease in value for the Euro throughout Tuesday – again a great reason to keep in close contact with your account manager here at FCD and to have everything in place to enable you to trade on the spot, as during this dropping market chances like these do not come along too often, and grabbing just a 0.5% spike in the market as it happens could save you around £1000 on a £200,000 purchase.
Those of you with upcoming Euro purchases, who are now thinking that it may be worth hanging on to see what happens however, may wish to think again.
Although markets moved in your favour yesterday, speculation is that sterling will continue to weaken after announcements last week by the Bank of England that they would be looking to move forward with growth boosting interest rate cuts sooner rather than later as credit crunch problems continue over here, alongside the ECB mentioning they may even raise their rates next week. The market tends to move on rumours on top of fact, therefore this could start getting priced into the market in the days preceding the decision, which is always something to be aware of.
An interest rate cut generally has a negative effect on the currency concerned, and a rate rise a positive one, as investors look to move their funds to higher yielding currencies, which is generally known as carry trading.
The Reserve Bank of Australia also decided to hold their rates during the early hours of Tuesday morning, which was widely expected and didn’t tend to have any major effects on the market.
Today’s Data
09:30am Net Consumer credit This is a measure of how much individuals have borrowed over the past month, and is similar to the M4 sterling lending as higher is positive and lower negative, although once again a reading too high may point to an overheating economy as consumers borrow to live beyond their means.
12:30pm U.S Jobless Claims – Initial and Continuing The initial jobless claims shows the amount of people claiming benefits for the first time in the U.S, and continuing states those that are still on benefits. A rise in either of these has negative implications for consumer spending therefore is negative, and a fall positive.
13:30pm FED Governor Ben Bernanke speaks Today sees the governor of the fed speak, and all eyes will be on him as he talks about the state of the U.S economy, and what they are looking to do in the future. A positive speech will be good for the greenback, and a negative speech may well lead to a drop in the value of the dollar.
14:00pmU.S ISM Non Manufacturing – This data shows the business conditions outside of the manufacturing sector, a high reading is seen as positive and a lower reading negative.
With the market seeming to be extremely volatile at present, any data that is being released is tending to have a larger effect than it usually would on the currency markets as investors panic, therefore it is best to make sure you take advantage of the positive movements when they arise. Feel free to get in touch with your account manager at FCD to find out about any future upcoming data that may affect your purchase, and they will gladly help you all the way through your transfer, removing part of the stress for what can be one of the biggest decisions of your life.
Breaking News
First Direct have announced this morning they will not be taking any mortgage applications from any customers who do not already have a relationship with the company, as it has received five times the usual amount of applications, and is struggling to cope with the demand. Many banks have hiked up their rates in order to deter new applications recently, but this is the first major lender to pull the plug completely.
“The flood of interest in our mortgages has meant we're taking longer than we'd like to handle applications, especially from non-customers," said First Direct chief executive Chris Pilling.
And Finally
The turmoil at Heathrow’s new Terminal 5 has been high on the media’s agenda this week, with reports saying there is now a backlog of around 28,000 bags as the baggage handlers struggle to process the luggage manually, due to a series of faults upon opening. If you are fed up of waiting around and struggling to have a smooth journey every time you make your trips abroad, why not make that journey to your dream destination a more permanent one, and check out the wide range of luxury overseas properties available at propertyline.co.uk , and start the ball rolling on a move to sun, sea and sand today.
No comments:
Post a Comment