Yesterday’s trading saw Sterling have once again a mixed bag of fortunes on the markets, after hitting fresh yearly highs against the Euro and monthly highs against the Australian Dollar, however losing significant ground against the U.S Dollar.
In general Sterling achieved a 7 month high against a basket of major currencies – refreshing news for those of you with upcoming currency transactions and this possibly might be time to consider the options available to you including a forward contract. This is where you can book out a rate for anything up to two years in advance for just a small deposit.
In a week ahead that is looking extremely light for economic data you may see great opportunities arise on the currency markets. This will be mainly due to profit taking on the markets as mentioned in yesterday’s report alongside the unwinding of carry trades. Unwinding of carry trades may well be the reason that yesterday saw Sterling gain against the AUD, NZD and ZAR as this is when investors will borrow money from a country with a low interest rate (Japan, U.K, U.S.A) and invest it in a country with a much higher interest rate (Australia, New Zealand & South Africa).
With the mention of the U.S looking to possibly consider hiking interest rates in the future and a rate decision due out on Wednesday, investors may have pulled back their carry trades into Dollars hence Sterling’s losses against the Dollar and gains against the AUD, NZD and ZAR over the course of the day.
House prices fall in June
House prices fell throughout the month of June for the U.K according to a report released by Rightmove at 23:01 on Sunday night. This yet again shows that although we are hearing about ‘green shoots’ in the U.K economy we are still far from getting back on the right track.
During this volatile period for Sterling it is imperative you are in a position to act fast and be able to book a rate off the back of one phone call. In order to find yourself in this position click here to open a trading facility which is completely free and carries no obligation to trade. Upon doing this you will be allocated a personal and friendly account manager who can keep you up to date with market movements alongside making you aware of any excellent buying opportunities throughout the day.
The Week Ahead
As mentioned above the week ahead doesn’t bring a huge amount to offer by way of data releases, however there are a few meetings of note that are certainly worth considering should you have an upcoming transfer.
On Wednesday we see the Federal Reserve policy meeting and although it is widely expected that interest rates will not change in the U.S all eyes will be awaiting comments made by the central bank regarding the future economic outlook.
Alongside this on Wednesday we also see the ECB roll out their first ever one year refinancing operation on Wednesday which is aimed at getting banks within the Eurozone to start lending again.
Both this announcement and the meeting could lead to high volatility on the markets for both the Euro and the Dollar so if you do have funds that you are looking to send overseas in the near future it may be prudent to eliminate the gamble that your currency could cost a lot more than you bargained for.
This Mornings News
Last night saw Conservative MP John Bercow elected as the new speaker of the house yesterday which could work either way for the markets. Political stability is one of the four factors of the currency compass and this stability may give sterling strength. However this factor has been far from stable lately and without doubt I’m sure some politicians will stick their heads over the wall and tell about their displeasure in his election.
This morning also sees the start of the bank charges case – Around one million unhappy customers are entering into a court battle to try and seek back their ‘unfair’ bank charges alongside stopping overdraft fees for the future – should this battle be won it could be devastating for the banks who as I’m sure many readers are aware are already in a bad enough situation. Remembering the impact this had on the Pound during the last time the banks hit the headlines it may be prudent to consider your options before this case unfolds
This is a brief summary of todays report. Click here to read the full report on our main website
If you are buying a property abroad, and want the best exchange rates, just click on the links below to go straight to our main site, or Email Me
Have a great day and thanks for reading!
Daniel Wright
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