In the USA, the Dollar was not affected too much by Friday’s better-than-expected employment figures, and rates for sending USD, as well as pegged currencies such as AED, remain around their best since February.

There have also been improvements in rates for sending South African Rand, Australian Dollars, and Canadian Dollars in the last week.

Focus this week moves to the Bank of England. The monthly policy announcement on Thursday is unlikely to bring much change to British monetary policy, but any further rumours of Quantitative Easing will be likely to bring grey clouds back to the UK economic outlook. The surprisingly good recent GDP figures are also subject to revision in the coming weeks, so the Pound is unlikely to be surging ahead just yet.

With all this in mind we think most exchange rates are good value at the moment for those of you sending money abroad. There is little other data out this week so we might expect a quiet week on the markets – as always though there is crystal ball and caution may be wise in the current climate.

If you would like to take advantage of any movements in your favour, simply call Simon Eastman (01923 725725)

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.

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

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.

Monday 9th
0645 – Swiss unemployment rate
0700 – German trade balance
2000 – US consumer credit

Tuesday 10th
0230 – Australian business confidence
0600 – Japanese consumer confidence
0930 – UK industrial & manufacturing production
1500 – UK GDP estimate (Q2)

Wednesday 11th
0700 – German consumer inflation
1330 – US trade balance
1900 – US Federal Reserve minutes

Thursday 12th
0230 – Australian unemployment rate
1000 – Eurozone industrial production
1900 – US monthly budget statement

Friday 13th
0530 – Japanese industrial production
1330 – US producer inflation

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.

Attended by nearly 200 real estate professionals, and coinciding with the PropertyFinder.ae quarterly awards, the event at OKKU was a successful evening and a chance for Dubai’s property community to meet Currency Index’s MENA manager Neel Gondhia, and UK Managing Director Robin Haynes.

For more information on our Dubai office, please see www.currencyindex.co.uk/uae or contact Neel Gondhia on +971 (0) 56 771 3174.

More surprisingly was that at the same time in the Far East, China decreased their overnight lending rate by 25 basis points giving instant strength to those currencies affected by trade in that part of the world. The Aussie dollar went on the offensive, gaining all day against the pound by over a cent. Those looking to move money across to the other side of the world quickly saw their returns diminish. The US dollar also took favour from this making good gains against the pound.

With the markets having little time to digest these moves the European Central Bank made the surprise move to cut their interest rates by 25 basis points to their lowest levels ever, to 0.75 percent. The reaction was instant Euro weakness, a welcome sight for those sending money overseas to the Eurozone. The Euro lost a cent to the pound and similar against the US dollar, giving some great buying levels close to the best levels in 3 ½ years we saw a couple of months ago.

This morning levels open where they closed yesterday and we have a raft of data to bring the week to a close. UK PPI data comes out at 9.30am followed by German Industrial Production. Across the pond Canadian unemployment data and building permits are released around lunchtime along with Ivey Purchasing Managers Index later on.

The main event today though is the US Non Farm Payrolls, always a key release and potential big mover of the currency rates. With the familiar effect of the dollar on GBP/EUR rates we could be in for some volatile trading this afternoon and potential buying opportunities so be sure to keep in touch with your broker at Currency Index if you have a requirement coming up soon.

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).

With the issues in Europe looking set to continue, I cant see the downward trend of cable halting. If they break through current resistance points trading in the early 1.50′s could be a possibility in the next couple of weeks.

The GBP/USD rates have come down some 5 percent in the past month, making a difference of around £8000 if you were looking to purchase a house for $250,000. That is a substantial amount in anyone’s books and could be the difference between affording the property or not.

This is a prime example of why tools like “forward contracts” and “stop loss orders” are useful, which you can use minimize exposure to movement. The forward contract lets you fix an exchange rate for settlement up to a year ahead, whilst only parting with a small amount of your capital. A stop loss order is put into the market at a rate below where the market is, your minimum acceptable trading level. If the rates are dropping this stops you losing out on purchasing as the order is automatically triggered if it hits the pre-determined level. Handy if you have a budget and the market is dropping, which without the stop in, could cost you the property.

If you have a US dollar requirement, be it for property or for business requirements it may be prudent to get in touch to discuss the options available to protect yourself. Contact me directly here or speak to one of the brokers at Currency Index today.