Weekly € rates and comments - week commencing 26th November 2007

 

Sterling had a steady week. The Bank of England minutes were released last week which showed there had been a 7 to 2 vote in favour of keeping UK interest rates on hold. The UK economy is certainly slowing but that is no different from others. Property prices are softening. There will be reductions in UK interest rates next year but we will also see reductions in interest rates elsewhere. Sterling continues to be fairly friendless.

 

The € was steady against sterling and sits at €1.391/£1 inter bank. Although Euro land has some significant economic positives when compared to the UK and US it won't have it all its own way. The German economy is slowing and the strong € has seen a lot of European industry begin to suffer and worry. Airbus viewed the current strength of the € against the US$ as company life threatening! The housing markets in Spain and Ireland are also in trouble. The European Central Bank is likely to keep interest rates on hold for a while to counter inflation but this is likely to have a significant negative affect on the Euro land economies. Has to be a good time to bring back funds to the UK.

Weekly Euro rates and comments - week commencing 19th November 2007

 

Sterling had a poor week. The Governor of the Bank of England stated that economic growth next year was going to be poor and that UK interest rates were going to be reduced. Retail figures were also poor and the net effect was that sterling lost ground against both the Euro and the US$. The market is wondering if UK interest rates could be reduced as early as December. Various economic figures out this week and we will have to wait and see what happens to sterling but a bit like the US$, sterling has few friends. We are in very interesting times.

 

The € is still top dog sitting at €1.398 inter bank against sterling. This is more on the back of the poor economic fundamentals for the US and the UK. We have to remember that France and Italy were complaining about the strength of the € many months ago. So I suspect these economies are suffering even more. The housing markets in Spain and Ireland are also suffering. The European Central Bank is likely to keep interest rates on hold for a while to counter inflation and then is likely to have a significant affect on the Euro land economies. Has to be a good time to bring back funds to the UK.

Weekly € rates and comments - week commencing 12th November 2007

 

 

Sterling had a mixed week losing ground against the Euro but gaining against other currencies such as the US$ and the high interest rate currencies such as the Australian $. The Bank of England kept UK interest rates on hold which was expected and we now wait for the minutes of the meeting to see what the emphasis of the meeting was and how close the vote was for keeping or reducing UK interest rates. UK data including house prices and trade figures were on the weak side and as such were a driver in the fall of sterling against the Euro. A lot of UK economic information out this coming week which will make interesting reading with regards to inflation as this will be a significant driver for UK interest rates.

 

The € is still top dog and against sterling sits at €1.424/£1 inter bank. The European Central bank kept € interest rates on hold and the market expects this to be the case for a while as the ECB battles inflation being over target and a strong € exchange rate which dampens exports. However, the strong € has increased the downside risks to growth significantly and as such there will be a moment in time when the other currencies become stronger but don't expect this any time soon. Still a good time to bring €'s back.

Weekly € rates and comments - week commencing 5th November 2007

 

Sterling did okay this week. Various members of the Bank of England made comments that the UK was suffering a slowdown rather than anything worse [at this time] and this has led the market to believe that any UK interest rate cuts are unlikely until next year. This has lent some support to sterling which has gained against nearly every currency apart from the all conquering Canadian $ [C$1.954/£1 inter bank]. Although the UK housing market is less robust than it was, house prices "apparently" increased in September. I am slightly sceptical about these figures but it does indicate that we are not in the same dire straights that the US finds itself in.

 

The € lost a bit of ground and sit at €1.439/£1. Euro land interest rates are unlikely to be reduced any time soon especially as inflation is sitting at 2.6%. However, the Euro land economy is being squeezed and we are unlikely to see any increases in Euro land interest rates. Euro land was slowest to increase interest rates and is likely to be the slowest to reduce them! Still a good time to repatriate your €'s