Foreign Exchange and Currency Blog - World First

World First Foreign Exchange 9 November 2009 Update: US Unemployment Leaps To 10.2%

jeremy — Mon, 09 Nov 2009 08:53:36 +0000

We were once again reminded of the human cost of ill-fated decisions over the weekend. Whilst Britain came together as one yesterday to remember those who had lost their lives in the defence of the country, on Friday we once again were given data that showed how many had lost their livelihood.

The US unemployment rate has now risen above 10%; Friday’s release confirming 10.2%. This is simply staggering.

The markets were in stasis for the morning session as everyone waited for the Labor Department figures. In the immediate aftermath we saw USD gain ground against most of the G10 basket while shares across the world lost close on 2% in the course of 10 mins. The market had not expected 10.2% unemployment clearly.

GBPUSD and GBPEUR were also volatile after the announcement but stayed within the ranges we suggested last week.

The key piece of £ centric data this week will be the Bank of England’s Inflation Report due Wednesday, while today’s focus will be on German Industrial Production.

You can also follow us live on Twitter at http://twitter.com/World_First

Latest Exchange Rates At Time Of Writing

Indicative Rates	Sell	Buy
GBP/EUR	1.1190	1.1217
GBP/USD	1.6767	1.6792
EUR/USD	1.4976	1.4988
GBP/JPY	151.05	151.40
GBP/AUD	1.8086	1.8111
GBP/NZD	2.2722	2.2773
GBP/CAD	1.7826	1.7880
NZD/USD	0.7366	1.7386
GBP/ZAR	12.47	12.52
USD/ZAR	7.43	7.47
GBP/PLN	4.7247	4.7516
EUR/JPY	134.80	135.05
Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.

Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.

To view any past or present currency blogs please click on the following link www.worldfirst.com/blog.

Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.

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World First in the press: Mail on Sunday 8 November 2009

laura — Mon, 09 Nov 2009 07:30:50 +0000

Relax with more cash when you go on holiday

by Jo Thornhill
Mail on Sunday 8 November 2009
Click here to read the full article

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World First Foreign Exchange 6 November 2009 Update: Bank of England Opt For A Swift Half

jeremy — Fri, 06 Nov 2009 08:27:41 +0000

Don’t believe the hype - Public Enemy

All in all the Bank of England decision to raise quantitative easing by an additional £25bn turned out to be a bit of a non-event in sterling terms. £50bn would have seen sterling retreat, nothing would have seen it jump higher so it naturally follows that a £25bn expansion is the most sterling neutral of decision.

One analyst described it as ‘one last heave’ we however believe it’s a gamble on an upwards revaluation of the preliminary GDP figure. Should the recovery continue to stall and the High St has an awful Christmas this bet may not come off.

Sterling hit highs of 1.6620 against the USD and 1.1190 against the euro yesterday. Barring any fun and games with today’s non-farm release or stumble in equity markets we believe that sterling should operate in a range of 1.62 - 1.6740 against the USD and 1.10 -1.1250 against the euro for the next week.

There was more data than just the MPC decision which helped GBP upwards yesterday: industrial and manufacturing production were both higher, validating Monday’s strong PMI release, whilst EU retail sales were poor.

Data is dominated by the Non-Farm Payrolls announcement from the US today. Should we see a better figure than consensus (-175k) we would expect USD to strengthen against its crosses and retreat should the figure come out worse.

Have a great weekend.

You can also follow us live on Twitter at http://twitter.com/World_First

Latest Exchange Rates At Time Of Writing

Indicative Rates	Sell	Buy
GBP/EUR	1.1156	1.1184
GBP/USD	1.6603	1.6627
EUR/USD	1.4860	1.4883
GBP/JPY	150.17	150.48
GBP/AUD	1.8134	1.8162
GBP/NZD	2.2877	2.2922
GBP/CAD	1.7662	1.7698
NZD/USD	0.7247	0.7269
GBP/ZAR	12.55	12.59
USD/ZAR	7.5490	7.5882
GBP/PLN	4.7217	4.7507
EUR/JPY	134.43	134.70
Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.

To view any past or present currency blogs please click on the following link www.worldfirst.com/blog.

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World First Foreign Exchange Podcast - 5 November 2009

jeremy — Thu, 05 Nov 2009 17:08:51 +0000

You can download the podcast from here

If you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our: Corporate Foreign Exchange Team on 020 7801 9050 or our Private Client Currency Exchange Team on 020 7801 9080.

The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.

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World First in: blogs.ft.com/moneymatters 5 November 2009

laura — Thu, 05 Nov 2009 12:42:18 +0000

Time to invest overseas

by Alice Ross
blogs.ft.com/moneymatters 5 November 2009
Click here to read the full article

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World First Foreign Exchange 5 November 2009 Update: Judgement Day For Sterling

jeremy — Thu, 05 Nov 2009 08:40:05 +0000

We have another one of our hugely successful ‘Bank of England’ webinars this afternoon at 14.00 GMT. Last month’s predicted the GBP rise to 1.10 and 1.63 against the euro and the dollar respectively; what will we predict on Thursday? Find out what we think the potential move in QE will do for the pound before anybody else! Email me at research@worldfirst.com if you need an invitation

And so it is here. The decision that will lay down the path for sterling for possibly the next 12 months will be announced at Noon today.

The interest rate decision is once again a foregone conclusion and the focus will be on whether the Bank of England will extend its asset purchases or not. We are in the camp that believe that they will extend and therefore that sterling will take a blow after its recent good run. This blow may however be tempered by any accompanying statement.

the MPC would have been swelled by the news that the services industry in the UK expanded nicely in the month of October with the services PMI coming out at 56.7 against an expectation of 55.5. This further indicates that the GDP figures released 2 weeks ago by the ONS will be appraised higher.

The Fed meeting was a bit of a damp squib as they decided to continued their policy of no change with the key statement of rates staying ultra low for an ‘extended period’. Market reaction was slight.

We of course also have the ECB decision today; a hold on interest rates and a nod towards the December meeting are expected

Other than the big central bank decisions we have Industrial and Manufacturing Production from the UK and EU Retail Sales before Initial Jobless Claims from the US this afternoon.

You can also follow us live on Twitter at http://twitter.com/World_First

Latest Exchange Rates At Time Of Writing

Indicative Rates	Sell	Buy
GBP/EUR	1.1122	1.1148
GBP/USD	1.6501	1.6525
EUR/USD	1.4820	1.4843
GBP/JPY	149.12	149.47
GBP/AUD	1.8223	1.8249
GBP/NZD	2.2954	2.3000
GBP/CAD	1.7590	1.7628
NZD/USD	0.7178	0.7198
GBP/ZAR	12.65	12.68
USD/ZAR	7.6552	7.6908
GBP/PLN	4.7376	4.7551
EUR/JPY	133.90	134.26
Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.

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World First Foreign Exchange Podcast - 4 November 2009

jeremy — Wed, 04 Nov 2009 17:02:03 +0000

You can download the podcast from here

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World First Foreign Exchange 4 November 2009 Update: Banks Dive Lower With Sterling Volatile Before BOE

jeremy — Wed, 04 Nov 2009 08:30:30 +0000

We have another one of our hugely successful ‘Bank of England’ webinars this Thursday at 14.00 GMT. Last month’s predicted the GBP rise to 1.10 and 1.63 against the euro and the dollar respectively; what will we predict on Thursday? Find out what we think the potential move in QE will do for the pound before anybody else! Email me at research@worldfirst.com if you need an invitation

Falls on equity markets continued to strengthen the US dollar with haven flows increasingly markedly. Equities, commodities and high yielding currencies, which in the past month had all been bought heavily against the weak dollar, were sold again yesterday with the banking industry at the centre of most people’s fears.

News from RBS, Lloyds and UBS all disappointed the market and led speculators to query whether this recovery is nothing more than a false dawn. Weakness for the banking sector also means weakness for the pound although it managed to gain strongly against the euro.

Such is the nature of the markets at the moment that trying to pick a prediction path is almost impossible. Construction PMI for the UK once again was in contraction yesterday but today we really get the big hitter.

The UK services PMI figure, due at 09.30, is the most important of the PMI releases as we are an increasingly service based economy. Today’s figure should be able to shine more light on the belief that the ONS’s GDP figure will be appraised upwards in the weeks to come. If it moves back into contraction I.e. Below a level of 50 then some credence would be given to that disastrous growth figure of -0.4%.

UK services PMI apart we have a very busy data day. The Fed announce their interest rate policy at 19.15 and while a hold is all but assured the accompanying statement should read that economic conditions “…warrant exceptionally low levels of the federal funds rate for an extended period…,”

We also have BRC shop prices, ADP employment change and US ISM Non-Manufacturing today.

You can also follow us live on Twitter at http://twitter.com/World_First

Latest Exchange Rates At Time Of Writing

Indicative Rates	Sell	Buy
GBP/EUR	1.1155	1.1180
GBP/USD	1.6469	1.6493
EUR/USD	1.4749	1.4770
GBP/JPY	149.16	149.60
GBP/AUD	1.8176	1.8214
GBP/NZD	2.2762	2.2820
GBP/CAD	1.7490	1.7540
NZD/USD	0.7222	0.7243
GBP/ZAR	12.74	12.79
USD/ZAR	7.74	7.76
GBP/PLN	4.7592	4.7869
EUR/JPY	133.56	138.91
Rates are dependent on amount transacted. Please call 0207 801 9080 for a live rate quote.

To view any past or present currency blogs please click on the following link www.worldfirst.com/blog.

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World First Foreign Exchange NZD / AUD Update: 2 November 2009

renee — Wed, 04 Nov 2009 02:37:43 +0000

AUD
The AUD did not continue its stellar performance over the last week as risk appetite has waned and interest rate expectations wavered despite there being positive economic data both locally and abroad. Last week began with third quarter PMI (0.2%) and CPI (1.3%) figures failing to spur the market to continue the bullish run on the Australian dollar despite both outperforming the previous quarter. It was widely commented that the PMI and CPI figures were considered lacklustre and didn’t provide for a shock 50 basis point interest rate hike. There was also a definite absence of hawkish comments by the RBA last week, which would have weighed on market sentiment towards the AUD.

On the risk appetite front, US GDP (3.5%) was significantly better than the previous quarter (-0.7%), however was treated with caution as it was during a period of significant government support for both the automotive industry ‘cash for clunkers’ and the housing market. Equity and commodity markets rebounded as a result, however this offered only a brief reprieve for the AUD which then slumped to touch on the lowest levels for the past three weeks as the S&P500 and risk appetite continued to track downwards for the week.

**Interest Rate Decision**

Yesterday, the RBA raised the cash rate 25bp to 3.50% and the local and overnight markets have been bearish on the AUD as a result which has continued its downward shift.

The week ahead in Australia
Monday 2nd – RBA Commodity Index.
Tuesday 3rd – RBA Interest Rate Decision.
Wednesday 4th – Building permits.
Thursday 5th – Trade Balance, RBA’S Governor Glen Stevens Speech.
Friday 6th – RBA Monetary Policy Statement.

AUDUSD
The pairing trended downwards for most of the week starting at 0.9204 and closing the week at 0.9128 with an gains on Thursday spurring the pairing to 0.9180.

The week ahead in the US:
Monday 2nd – ISM Manufacturing, Pending Home Sales, Construction Spending.
Tuesday 3rd – Factory Orders, ABC/Washington Post Consumer Confidence.
Wednesday 4th – MBA Mortgage Applications, ADP Employment change, ISM non-manufacturing, EIA Crude Oil Stocks Change, Fed Interest Rate decision.
Thursday 5th – Continuing Jobless Claims, Initial Jobless Claims, Nonfarm Productivity, Unit Labor Costs.
Friday 6th – G20 Meeting, Average Hourly Earnings, Average Weekly Hours, Nonfarm Payrolls, Wholesale Inventories, Consumer Credit.

AUDGBP
The pairing lost ground for most of the week, starting at 0.5643 and closing at 0.5518.

The week ahead in the UK:
Monday 2nd – PMI Manufacturing.
Tuesday 3rd – PMI Construction, Halifax House Prices,
Wednesday 4th – Nationwide Consumer Confidence, PMI Services, BRC Shop Price Index.
Thursday 5th – Industrial Production, Manufacturing Production, BoE Interest Rate Decision.
Friday 6th – NIESR GDP Estimate, PPI.

AUDEUR
There was volatility in the pairing this week starting the week at 0.6132, reaching levels of 0.6190 on Wednesday morning then losing ground to 0.6080 on Thursday. It then recovered lost ground to close at 0.6154.

The week ahead in the Eurozone:
Monday 2nd – PMI Manufacturing.
Wednesday 4th – PMI Services, PPI.
Thursday 5th – Retail Sales, ECB Rate Decision, ECB Trichet’s speech.
Friday 6th – Factory Orders (Germany).

NZD
The NZD dollar weakened over the last week as risk appetite withdrew from the market as overseas equity markets fell. Prime Minister John Key confirmed that there was little opportunity to weaken the currency also saying that ‘a lower exchange rate will enable us to promote economic growth faster’. The trade deficit figure last week was significantly better than expected, decreasing for the month of September (-424million), however this was largely on the back of falling imports.

Business Confidence (48.2) is still strong in New Zealand and as expected, interest rates were kept on hold at 2.5%. Inflation increased above expectations for the third quarter which increased speculation about a rate increase in the first half of 2010. It is unlikely however that the RBNZ governor will release statements with regard to interest rate speculation, to avoid strengthening in the NZD prematurely. The NZD is already the best performing out of 16 major currencies over the last 6months.

The week ahead in NZ:
Monday 2nd – Labor Cost Index.
Tuesday 3rd – ANZ Commodity Index.
Wednesday 4th – Unemployment Rate.

AUDNZD
The NZD weakened throughout the week against the AUD, initially opening at 1.2192 and then closing at 1.2520.

GBPNZD
The pairing strengthened last week, beginning the week at 2.1580 and closing the week at 2.2608.

EURNZD
The pairing strengthened throughout the week, starting at 1.9870 and closing the week at 2.0277.

NZDUSD
The NZD lost ground against the USD last week, hitting a low of 0.7160 on Thursday and closing the week at 0.7291.

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World First Foreign Exchange NZD / AUD Update: 5 October 2009

renee — Wed, 04 Nov 2009 02:35:28 +0000

AUD

The AUD recovered from a weak start early in the week, finding local support in RBA Governor Glenn Stevens, Australian Retail Sales and reports supporting higher interest rates resulting in new highs for the year.

The RBA Governor told the Senate economic references committee early in the week that the rates were at ‘unusually low levels’, and when Retail Sales were released mid-week at a better than expected figure there was heightened speculation of an earlier interest rate hike.

At the same time, the RBA released reports on Private Building Approvals & House Prices as Governor Glenn Stevens became the poster boy for Australian Dollar strength for reminding the market that rates will need to be increased ‘at some point’. The Building Permits figure was worse than expected, however this supported an increase in rates as a means to curb property prices and kick-start the construction sector.

As overseas equity markets fell sharply towards the end of the week, the Aussie followed suit against the Greenback as the market anticipated and then received a host of poor employment data out of the US on Friday night, namely Non-farm Payrolls.

The week ahead in Australia

Monday 5^th – ANZ Job Advertisements.

Tuesday 6^th – Trade Balance, RBA Interest Rate Decision.

Wednesday 7^th – Home Loans, Investment Lending.

Thursday 8^th – Unemployment Rate, Employment Change, Foreign Reserves..

AUDUSD

The AUD is still most closely correlated to risk appetite via overseas equity markets, in particular the S&P500. The AUDUSD started last week at 0.8652, only to push higher mid week to reach the 0.8850 level. The currency pair finished the week at 0.8680.

The week ahead in the US:

Monday 5^th – ISM Non-manufacturing.

Tuesday 6^th – API Crude Oil inventories, ABC/Washington Post Consumer Confidence.

Wednesday 7^th – MBA Mortgage Applications, EIA Crude Oil Stocks, Consumer Credit, Monthly Budget Statement.

Thursday 8^th – Initial Jobless Claims, Continuing Jobless Claims, Wholesale Inventories, Fed’s Bernanke Speech.

Friday 9^th – Fed’s Lockhart Speech, Trade Balance, Fed’s Kohn speech.

AUDGBP

The AUDGBP showed more volatility last week, initially tracking upwards until Thursday when risk aversion returned to the market leading up to the US unemployment figures. The pairing started the week at 0.5421, peaked mid week at the 0.5530 level and then fell away to close the week at 0.5452.

The week ahead in the UK:

Monday 5^th – PMI Services.

Tuesday 6^th – Halifax House Prices, Industrial Production, Manufacturing Production, NIESR GDP Estimate, Nationwide Consumer Confidence.

Wednesday 7^th – BRC Shop Price Index.

Thursday 8^th – BoE Interest Rate Decision.

Friday 9^th – PPI, Total Trade Balance.

AUDEUR

This pairing started the week at 0.5889 pitching to 0.6050 and then falling heavily to close the week 0.5946.

The week ahead in the Eurozone:

Monday 5^th – Retail Sales.

Wednesday 7^th – Factory Orders (Germany).

Thursday 8^th – Industrial Production (Germany), ECB Interest Rate Decision, ECB Trichet’s Speech.

Friday 9^th – CPI (German), Trade Balance (Germany),

NZD

Economic data out of New Zealand last week was supportive of further domestic strength with Building Permits rising 1.7% whilst Business Confidence came out at 49.1 against the previous month’s 34.2. The demand for property continued, stimulated by the current interest rates of 2.5%.

The NZD rose on Tuesday against the JPY after the Japanese Finance minister corrected an earlier statement and said he may intervene to weaken the Yen. Late in the week risk aversion prompted a fall in the NZD as overseas equity markets fell, prompted by the worse than expected US unemployment data on Friday

The week ahead in NZ:

Monday 5^th – ANZ Commodity Prices, NZIER Business Confidence.

AUDNZD

AUDNZD started the week at 1.2061 and strengthened, reaching the 1.2240 level mid week and then closed at 1.2122.

GBPNZD

It was a volatile week for this currency pairing, starting the week at 2.2043, reaching 1.2344 mid week and then closing the week at 2.2276.

EURNZD

EURNZD started the week at 2.0454 and weakened to close the week at 2.0361.

NZDUSD

The pairing started the week at 0.7165 and strengthened to reach the 0.7250 mid-week and then closed the week at 0.7125.

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