Currency Rates

US$/GBP - 1.544

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Sterling experienced a rollercoaster ride yesterday, as it moved sharply down and then recovered ground later in the day against the euro and US dollar. The initial drop yesterday morning was as a result of the negative comments from the Monetary Policy Committee of the Bank of England who were taking questions from parliament’s Treasury Committee. Mervyn King said that “It may be necessary to expand Quantitative Easing. Despite the depreciation of sterling we haven’t seen much evidence of a pickup in net trade which is an important part of our rebalancing”. This caused sterling to fall, and this was further compounded when data showed 10,000 fewer mortgage approvals than were initially expected. This downward movement was reversed against the euro as German and Belgian business confidence came in worse than expected and in addition, French consumer spending disappointed.

Out today in the UK we have very little data, but yesterday’s volatility demonstrates why it is so important to speak to a currency specialist sooner rather than later to help pre-empt and avoid large losses on your currency transfers.

In the USA, following worse than expected consumer confidence data, which was down over concerns in the jobs market, the US dollar strengthened against the euro and sterling as investors moved into safer assets. In addition, there has been talk that some of the recent US dollar strength has come from the unwinding of carry-trades (when investors who have borrowed US dollars at low rates to invest internationally have to buy back US dollars to pay off the loans) which boosts US dollar strength as demand rises. Today, Fed Chairman Ben Bernanke speaks which is likely to be market moving.

Call in now to avoid missing out. Remember to minimise the chance of losing money due to adverse movements in the markets by speaking to a currency specialist as early as possible. Call 0207 898 0541.