Good morning. The pound continued to climb yesterday after the BoE minutes and comments from a credit agency supporting the UK. We hit new 19 month highs against the Euro, but rates have already retracted slightly. Today we’ll look at why the pound rose through June 2010 and where rates may go through July and August. Rates at 08:30am 24th June 2010 are as follows:
- GBP/EUR 1.2137
- GBP/USD 1.4935
- GBP/AUD 1.7150
- GBP/CAD 1.5541
- GBP/CHF 1.6510
- GBP/DKK 9.0312
- GBP/JPY 134.08
- GBP/NZD 2.1106
- GBP/ZAR 11.272
- EUR/USD 1.2304
Bank of England minutes
Released yesterday, 2 weeks after the interest rate decision, the minutes showed one member voted to increase interest rates. Higher interest rates tend to support a currency due to the higher return for investors. Analysts said however that calls for higher rates were unlikely to continue given the austerity measures that will limit economic growth and inflation.
The ratings agency said yesterday Britain would retain its AAA credit rating if the measures outlined in the budget were implemented. The comments supported the pound and helped push rates higher through trading yesterday.
Best Exchange Rates
We are now at a 6 week high against the US Dollar, and close to a 19 month high against the Euro. Those that wish to take advantage of the current rates should contact us to discuss fixing. Even if you don’t need your currency for some time, a Forward contract allows you to fix today’s rates but only pay 10% of the total now, the remaining due when you need your currency.
What will happen to exchange rates in June & July
It’s very hard to call at the moment. The pound has been supported due to the budget and positive comments about the UK economy. Given the problems remain, it could be that the spike is short lived. We think developments in the Eurozone will now be the focus, as plans to reduce debt in Greece, Spain and Portugal will likely have a big impact on the value of the Euro.
If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what’s happening in the currency markets.