This is their weekly newsletter, reproduced with their permission.The rates given are the “inter-bank” rates, for comparison, not the “client rates for sending, by the way”.
- 1.380 / £, compared with 1.399 last week
- Cypriot dollar
- 0.803 / £, compared with 0.809 last week
- US dollar
- 1.9847/ £, compared with 2.022 last week
- Canadian dollar
- 1.973 / £, compared with 2.057 last week
- Australian dollar
- 2.287/ £, compared with 2.342 last week
- New Zealand dollar
- 2.588 / £, compared with 2.629 last week
- Swiss Franc
- 2.292 / £, compared with 2.330 last week
- South African Rand
- 13.940 / £, compared with 13.848 last week
Charles’s Thoughts: Sterling has had a bad week. First the minutes of the last Bank of England interest rate meeting were released and showed that the vote to reduce interest rates was unanimous. This surprised the market. Then the balance of payment figures were released. These were very bad with a huge net outflow of funds. And now the Christmas retail period is not going as well as hoped and house prices continue to fall in most places. All doom and gloom so it is not a surprise that sterling is suffering. Sterling only seemed to make a gain against the South African rand. Shows how the market views the new head of the ANC in South Africa!. But I suppose they did win the rugby world cup.
The US$ has been on the up. No clear reasons as to why apart from the need for US financial institutions to realise their investments so as to make their balance sheets look as good as they can by the year end. Also investors needed to cut their losses if they had “bet” on the US$ would lose further value. However I do wonder if this positive news is short term given the major economic problems faced by the US$ in 2008.
The Euro is still the preferred currency. Inflation continues to be of concern to the European Central Bank. So any cuts in Euro interest rates are very unlikely short to medium term. But clearly the credit crunch is having an affect on Euro land as the ECB lent Euro 350 billion to financial institutions last week who were having difficulty borrowing elsewhere. And I still feel that Euro land cannot be immune to the slow down elsewhere. Talking to one of my clients who does a lot of business in Euro land he said there was a lot of pain being suffered by Euro land exporters given the strong Euro exchange rate.
As noted above all major currencies gained against sterling apart from the South African rand which faces problems given the markets uncertainty with possible political instability. Canada still has the most going for it with its huge natural resources but no currency is safe in the current climate. HAVE A WONDERFUL CHRISTMAS AND ALL THE EVRY BEST FOR 2008.
[Declaration: I receive a small commission for any customers I refer to Smart using the above link. This does not affect the price you pay for your currency, since it replaces money that would otherwise be spent on advertising.]