Rates for sending Euro payments have fallen 4c (3%) this month so far, with the biggest drop coming last week after the Bank of England revealed that they are considering more Quantitative Easing to stimulate the UK economy. Worries over the recovery and the extent of October’s forthcoming spending review have hit the Pound against the Euro in particular. We expect rates may continue to fall in the coming weeks unless there is some solid news to support sterling; Tuesday’s revision to GDP is the only main UK data this week and there is little out in the Eurozone that is likely to help.
On Wednesday the EU Economic Affairs Commissioner also announces changes to the Growth and Stability pact, designed to prevent repeats of the Greek economic crisis.
US Dollar news
The US Dollar rate has been less affected by the Bank of England’s outlook, as the American currency itself has been suffering from economic worries too. Jobless claims and new home sales figures last week were worse than expected, which has led to a weaker dollar and the best rate for GBP-USD since early August. Unless this week’s consumer confidence and GDP figures in the US are much worse than expectations, we would be surprised to see much further movement, given the fragile state of the Pound.
Other Currencies
Last week saw slight recoveries in the rates for sending money to New Zealand, Australia and Canada, although all 3 rates are still lower than at the beginning of September. The underlying theme is again worries about the UK recovery and forthcoming spending cuts.
Data releases this week
Monday 27th
0800 – European Central Bank speech (Trichet)
0900 – Eurozone money supply
0800 – European Central Bank speech (Trichet)
0900 – Eurozone money supply
Tuesday 28th
0700 – German retail sales
0930 – UK GDP (Q2)
1500 – US consumer confidence
2245 – New Zealand trade balance
Wednesday 29th
0930 – UK money supply & mortgage approvals
1000 – Eurozone economic confidence
Overnight – UK consumer confidence
Thursday 30th
0400 – New Zealand business confidence
0855 – German unemployment
1330 – US GDP & jobless claims
Friday 1st
1000 – Eurozone unemployment rate
1500 – US ISM manufacturing index
And finally…
A developer has bricked up the front of a bank in Dorset after being refused a £240,000 loan, in protest at the credit available to small businesses. Cameron Hope said speaking to the bank about obtaining a loan was like “talking to a brick wall”.
