21/05/2013

House prices support sterling | Smart Daily Currency Note

GBP/EUR - 1.1822
GBP/USD - 1.5231
EUR/GBP - 0.8458
EUR/USD - 1.2878
GBP/AED - 5.5910
GBP/AUD - 1.5520
GBP/CAD - 1.5632
GBP/CHF - 1.4744
GBP/CNY - 9.32
GBP/HKD – 11.8146
GBP/HUF – 343.31
GBP/INR – 83.78
GBP/JPY – 156.32
GBP/NZD - 1.8603
GBP/RUB – 47.47
GBP/SEK – 10.1214
GBP/ZAR – 14.3982


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Sterling gained ground yesterday morning against most of it's major peers including the euro and US dollar after an industry report showed home asking prices to have risen for a fifth consecutive month. The data from Smart Currency partners Rightmove Plc  described house prices rising by 2.1%, pushing values to record highs and bringing sterling up from it's lowest level in six weeks against the US currency. A slew of economic data is scheduled for release this week that should prove influential for the UK and sterling’s performance including the publication of key inflation data released today in the form of producer and consumer price indices. Later on this week, traders will pay close attention to the Bank of England latest policy meeting minutes, retail sales figures and revised growth data. Talk to your trader for the latest prices as things unfold.

It was a quiet start to the week for the euro, holding steady against the majority of its trading partners in the absence of much data being released due to the bank holidays being enjoyed in Germany, France and Holland. The euro remains weak as periphery countries are struggling to return to growth, and officials are struggling to meet on common ground with policy as recessionary stress continues. Prices are likely to be volatile as the European Central Bank comes under pressure to expand on it's easing cycle. German Producer Price Index inflation data is released this morning, though most will be looking to French and German manufacturing and services data emerging on Thursday to give an indication of economic health and may well have more of an impact on euro rates. Speak to your dedicated trader for feedback and up to the minute market prices.

The US dollar lost ground almost across the board yesterday in what is being seen as a natural unwinding from the gains seen over the past two weeks. US dollar weakness against a firmer Japanese yen has weighed on demand for the US currency in anticipation of the Federal Open Market Committee (FOMC) meeting minutes released on Wednesday evening. A growing number of central bank officials are talking down speculation of additional monetary stimulus due to strong domestic confidence and a relatively healthily performing economy, which is why Wednesday evenings release is so pivotal to US dollar strength going forwards. A member of the FOMC is speaking this afternoon following comments from the Treasury Secretary, though the market will be poised for the President of the FOMC’s speech to Congress tomorrow in conjunction with Home Sales data and minutes from the central bank’s latest meeting. Call in for the latest rates and feedback from your trader.

Elsewhere, the Japanese yen performed well yesterday; strengthening by the largest margin in three weeks against the US dollar following comments from Japan’s Economic Minister who said that further losses to the currency’s value would start to have negative effects on the Japanese economy whilst stating that the currency had fallen far enough. The Australian dollar meanwhile rose against the US dollar for the first time in three days, whilst the New Zealand dollar enjoyed gains against all it's major trading peers after the country's finance minister said that with house prices on the rise, the central bank may be forced to raise interest rates. Get in touch for the latest rates.

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Exchange rates can move very quickly. The above rates are valid at a moment in time. We have no crystal ball and we recommend that if an exchange rate works for your budget then don’t wait for an even better exchange rate - Murphy’s Law says the rate will go against you and cause you maximum pain! Suggestions should not be taken as advice or fact.

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