NZ Dollar

Dollar Rally Continues

Last week saw the US Dollar continuing its recent run of strength, with the Greenback hitting its most expensive level for a month. The momentum caused by the Federal Reserve’s likely slowing of its monetary easing programme, has returned the USD to safe haven status, and seen investors buying the currency with a resultant increase in value and drop in rates for those of you looking to send money to the USA. The minutes of the latest Federal Reserve meeting are released on Wednesday evening and could see this pattern gain further impetus.

Closer to home we had a quieter week in the UK and Europe, with the Euro trading in a range of less than a cent against the Pound all week. In Europe this week the only data of note is consumer confidence on Thursday.

In the UK and for the Pound however we have a busy week ahead with key data releases throughout the week. Tomorrow sees the monthly consumer inflation figures releases, which can have a significant impact on the Pound, and on Wednesday the Bank of England minutes will reveal how much the prospect of further QE was discussed by the MPC earlier this month. On Thursday we then have the first revision to Q1 GDP, and we would urge caution on this particularly as the initial reading was better than expected, and most recent revisions have been negative. Needless to say any significant downward revision could raise the prospect of a third period of recession in the UK which would very likely damage the Pound.

Further afield this week there are figures due out in Japan, New Zealand and Canada.


The Week Ahead

For the US Dollar and UAE Dirham, late last week saw a rally in exchange rates, with an improvement of 2c in rates for the Pound on Thursday. Investors moving away from the US Dollar and back into ‘riskier’ currencies caused the Greenback to weaken.

This week as we head into the end of July, we have some important data due out which is likely to move exchnage rates. In the US on Friday we have the main labour market statistics, and trade balance figures for South Africa and Australia on Tuesday and Thursday respectively are likely to affect the cost of the Rand and Dollar. The Canadian Dollar, which has been fairly stable recently, sees GDP figures released tomorrow.


Sterling Drops Across The Board As UK Recession Deepens

This morning thew pound dropped across the board following the UK GDP revision for Q2 which was estimated to be a slight improvement from the first reading at -0.2% compared to -0.3% last month. Instead it came out at -0.7% which is a massive difference to expectations and shows growth is much worse than first thought. This most likely isn’t being helped by the issues in the Eurozone and the weak Euro making imports/exports more costly. Also the unusually wet summer and additional Bank Holiday have affected the retail sector adding to the UK’s woes.

The pound is trading half a cent down against the US and Canadian dollar, 1 cent down against the Kiwi and Aussie dollars.


Pound Holding Its Ground

Despite a mixed bag of data last week, the Pound managed to improve its value yet further against the Euro, and even managed to post some gains against the US Dollar. Inflation and retail sales figures were both sterling-negative, as were the Bank of England minutes, but the markets seem to be more focussed on macroeconomic problems these days. A slight fall in unemployment was the only vaguely good news for UK plc.

There were also gains for the Pound against the South African Rand.

As rumours of a Spanish default gain pace, many buyers are now taking advantage of excellent Euro rates. The US Dollar (and pegged currencies, eg AED) have seen strength in recent weeks but any signs of weak US data this week will likely increase expectations of more monetary easing in the US, which would probably lead to a weaker dollar and better rates for sending USD payments.

There is not a huge amount of data out this week, although the revision to UK GDP, on Wednesday, could affect the pound. Any downward revision would mean the recession is deeper than previously thought and could bring exchange rates down. Conversely, sterling would gain some strength if there are any signs of recovery – although the IMF have just downgraded their forecast for UK growth this year to just 0.2%, so we won’t be holding our breath for positive news.

Elsehwere, the New Zealand and Australian Dollar rates both fell last week, as both currencies gained in price. We have the New Zealand interest rate decision and Australian inflation on Wednesday, so if you are looking to send a transfer in either currency, check for any helpful movements on Wednesday morning.


Commodity Currencies Continue To Gain

The Pound continued to fall on Thursday and Friday against most other currencies, including the US, New Zealand, Australian and Canadian Dollars and UAE Dirham.

The ‘commodity currencies’ have all gained significant strength recently, giving worse rates for sending money to South Africa, New Zealand and Australia in particular. On the other hand, if you have assets in any of these countries to bring back to sterling, now could be a good time to consider fixing an exchange rate.

This week, we don’t have any major data due out in the UK, and now that Wimbledon and the British Grand Prix are also over, perhaps headlines will all be focussed overseas. Foreign exchange rates are still as unsettled as the British summer, so do let us know at Currency Index is you have a transfer that you would like us to help with in the coming weeks.


Commodity Currencies Get A Boost

The Pound ended June at reasonable levels against the Euro and US Dollar, despite the European summit providing a surprise deal for Eurozone bonds which had strengthened the Euro overnight on Thursday. Rates recovered somewhat on Friday, even though Bank of England governor Mervyn King gave a speech on Friday, which often softens sterling.

With a newly found confidence in the prospects for the global economy, commodity currencies have also performed well against the pound over the last week with the Australian and New Zealand Dollars, and South African Rand, strengthening 2.09%, 1.7% and 3.48% respectively (giving lower rates for sending money to Australia etc).


Kiwi Dollar Gains Against Pound

Overnight the weakening of the Kiwi dollar reversed as Standard & Poors gave the go ahead for the New Zealand governments plans to get their budget deficit back into surplus. This news gave the Kiwi a 2 cent rally over sterling. The rates are more than likely to remain volatile as the antipodean currencies are seen as high risk with investors. While the crisis unfolds further in the Eurozone and sentiment is risk averse I think we will be seeing exchange rates on GBPNZD remain above 2 for some time. Welcome relief for those out there looking to move funds to New Zealand but beware the volatile currencies like this which are investor led on the main can swing drastically and being on the other side of the world the time difference means these swings tend to happen overnight in the UK.


Antipodean Currencies Weaken

Thursday saw sterling have another strong performing day making gains against a basket of currencies. Most notably was the mid-market pound to euro exchange rates climbing back above the 1.23 level, the best we have seen for nearly two years. This was driven by fresh concerns over debt and economic weakness in the single area forcing investors to hold a more risk averse stance and putting money into the seemingly “safe haven” pound. This was also the reason behind gains the pound made against the antipodean currencies (New Zealand and Australian dollars). The New Zealand dollar ratewhich overnight weakened off following poor unemployment data continued its slide well above the key resistance point of 2 to the pound, losing nearly 3 cents in 24 hours and opening this morning another cent and a half lower.If you are looking at sending money to any of the EU countries or down under to Australia or New Zealand in the coming weeks now is a fantastic time to be looking at locking in the exchange rate. This can be done on a forward basis, using a small deposit to fix the rate – speak to one of the team for more information on this and how it can potentially save you thousands.

Today we have already had Halifax house price data out in the UK which has come in lower than expected. With the problems in the Eurozone, the single currency remains weak but the pound has lost a bit of ground against the US dollar. Despite this, mid-market trading is still well above the 1.6 mark and so still excellent for those sending money to the USA.

Elsewhere, we have PMI and retail sales data from the EU and later a raft of US employment data including average earnings and the key non-farm payrolls figure. This latter release tends to throw up some volatile trading dependent on the results coming in better or worse than expected so keep in touch at lunchtime (1.30pm) if you have a dollar requirement which may be affected.

Have a good weekend.


Canadian Dollar Exchange Rates Fall

Canadian dollar exchange rates against the pound dropped today fuelled by investor worries over China and Europe following the poor PMI figures earlier today. The Loonie is very much commodity based (with Canada being a huge oil suplier) so downbeat sentiment affects its strength as mentioned with the New Zealand and Aussie dollars the past couple of days here on pounddollarexchange. 

At lunchtime Canadian retail sales came out much lower than forecast having further negative impact on the currency but making rates for those of you buying Canadian dollars much better. The monthly figure was expected to be 1.7% but in fact came in at 0.5% , significantly lower. This underlines concerns from the Bank of Canada about global economic weakness and the affect that is having on Canada’s growth, fueling speculation that interest rates will stay low for some time.

This in mind I personally think we could be heading back towards the 1.6 mark in the near term so if you have dollars to sell and are holding off for rates to drop back below the 1.55 level seen recently, I’m not convinced this will happen.

If you are watching the rates hoping it will go in your favour you may find it helpful to speak to me directly and discuss the current drivers behind what’s moving the rates. I can keep my eye out for you and inform you of upcoming events and data releases regarding your specific requirements to try and achieve that bit more for you. Fill out your details on the contact form or email me directly sre@pounddollarexchange.co.uk

 


Kiwi Weakens After GDP

Good morning readers,

We come in this morning to see GBP/NZD exchange rates 2 cents better off for buying following the weaker than expected GDP figures. The last quarter figure was due to show 0.6% growth but in fact was half that at 0.3%. The immediate sell off on the Kiwi dollar is giving the best buying rates since the start of the year.

Some analysts feel the recent sell-off of the Kiwi (and other commodity dollars) helped by uncertainty in China may well be overdone so if you do have a requirement for buying New Zealand Dollars or Australian Dollars in the coming weeks it may be worth looking at fixing your rate soon. Keep in touch with the experts at Currency Index as to the options available and for regular updates on rate changes.

sre@pounddollarexchange.co.uk


Sterling Stronger Against Aussie & Kiwi

The pound has rallied against the antipodean currencies today breaking above 1.51 against the Aussie and 1.94 against the NZ dollar.

The minutes from the March Reserve Bank of Australia published over night mentioned concern over Europes debt crisis and the strenght of the Aussie and how that would affect the economy. Interest rates are a key mover of currency rates and the RBA mentioned there was “ample scope” to cut interest rates if the need arises which would send the dollar lower.

Since the minutes came out, we have seen a 2 cent swing in the rates as the dollar weakened as markets priced in the chance of rate cuts. We are now trading at the best levels on GBP/AUD since early January so a good time to be trading if you have a requirement.

The kiwi is plummeting on rumors regarding China. Rhetoric about a ‘hard’ landing in the Chinese economy are weighting on sentiment as well as rumors of a coup, adding fuel to the pessimism hovering over the markets. Its an important week for the NZD data-wise, as Q4’s Current Account is due later (9.45pm UK time) and the GDP figures in the same period are also expected tomorrow.

When sentiment is down among investors the commodity based currencies suffer giving good opportunities for buying AUD, NZD and ZAR (South African Rand). Each have lost between 1.25% and 1.5% against the pound today.

If you have a requirement for one of the commodity lead currencies coming up and wish me to keep an eye on the markets for you to help maximize your purchase contact me directly giving details and I will be in touch – sre@pounddollarexchange.co.uk


Dollar Holds Firm

USD

Pound to US dollar rates held firm over the days trade as the FED economic outlook last night was more upbeat than previous months. As reported yesterday this was expected to give the dollar a boost against the pound but with the UK outlook looking rosier with a string of above forecast data releases recently it has made little ground.

Over the day after sterling initially spiked as European trade opened the rates have slowly trickled down to current levels around 1.57. Trading has ranged within a slim half cent margin all day.

AUD/NZD

Against the antipodean dollars, Aussie and New Zealand, the pound has gained all day. The 1.5 mark has been reached against the Aussie having been trading in the 1.4′s since January and for the Kiwi we heading up towards 1.94. The main driver against these type of riskier commodity lead currencies is investor sentiment which is lower over worries about European debt. Other commodities like gold and oil are also trading lower, with gold down 3% today alone.

There is a raft of Australian data out overnight which could affect the dollar, coupled with the fact that limit orders for GBPAUD at 1.5 will have been triggered which could mean the rise is short lived. Anyone with an Aussie or Kiwi requirement might be wise to lock in while the rates are still high.

 

 

 


Euro And US Dollar Gain Value

Last week saw a dip in exchange rates for the Pound against both the Euro and US Dollar. In the USA, non-farm payrolls on Friday showed that more jobs had been created than expected, which gave the dollar some strength, and in Europe private creditors holding Greek debt agreed a write-down of value which means that the EU bailout can go ahead, giving the Euro strength too.

The Pound also finished the week lower against the Canadian, Australian and New Zealand dollars. Interest rates were held as expected last week in the UK, Eurozone, Australia and Canada, having little effect on exchange rates, and the Bank of England also held Quantitative Easing at its current level.

This week, the main data in the UK is unemployment, due out on Wednesday morning. After recent news has been positive for the UK and the Pound, sterling is vulnerable to any negative data and exchange rates could fall on Wednesday if the headline unemployment rate increases from 8.4%.

Elsewhere, if you are buying or selling US Dollars, keep an eye on the FOMC minutes released tomorrow (Tuesday) at 7pm, and Friday’s inflation figures, while if you are looking to make a Euro transfer, the ECB monthly report on Thursday will be important, as will Wednesday’s CPI inflation figures. The Euro may have scope for more strength (lower exchange rates) this week now that the Greek bailout looks set to happen, despite question marks over the long-term sustainability of the deal.

Many of our clients are currently using Forward Contracts to lock into rates for the coming months, and if you would like to see what kind of rates are available to fix for your own requirements, please fill out the contact form or contact me directly sre@pounddollarexchange.co.uk.


NZ Dollar – Cheapest Since January

Sending money to New Zealand has become a little cheaper this week, with the New Zealand Dollar at its weakest level against sterling since mid-January. Last night the Reserve Bank of New Zealand kept interest rates on hold at 2.5%, but negative sentiment in the lead up to the monetary statement caused selling off of the NZD, with risk aversion also a factor. While the Kiwi remains well below the £1=$2 level last seen at the turn of the year, at least those of you making money transfers to New Zealand have a little better news this week.


Cable Slides Off Poor House Data

Pound to US dollar exchange rates (known as Cable) fell as the Halifax house price index figures came out lower than expected. We have seen a full cent gain by the dollar since trade opened, dropping below 1.58. Recent figures from the US have been good and although one would expect a stronger currency off the back of positive figures the case has been the opposite. Euro Dollar rates also pushed lower following the weak Euro zone GDP figures earlier today, with the dollar gaining 75 points so far.

The USD is seen as a safe currency so when investors are worried about global economic factors the dollar is bought up making it stronger. As America is the largest global economy, if data is coming out better than expected investor confidence grows, they are less worried and investments become riskier. The result of this is selling off the safe haven dollar and buying riskier currencies like the “commodity” led Canadian, Aussie and NZ dollar and to some extent sterling.

With no data out from the States today we may well see the slide in cable continue but over the rest of the week comes a raft of employment and jobs data so check back for updates on how the rates are affected. If the key non-farm payroll figure on Friday comes in better than expected I predict we will see higher pound to dollar exchange rates. If you have a requirement register your interest at sre@pounddollarexchange.co.uk and I can keep you posted as data releases unfold.