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Currency Market Update 01 12 09

The Pound is still suffering from UK Banks involvement in Dubai, the uncertainty to how much money is involved and of course how much it could cost the tax payer. With investors now being even more cautious about investing in sterling, we could see more downside and this morning GBP remains well below 1.10 against the Euro and 1.65 on the Dollar. With Christmas fast approaching any upturn could be well into next year. That said in the new year the general elections could have a massive impact on how sterling will value and a small majority government could see investors pulling out of GBP completely as the UK will be seen to have a weak government. The Dollar with slight gains against sterling yesterday and a drop against the Euro, the dollar is just could be reliant on any Dubai news that comes in. Investors could look for safe assets and return to the trusted dollar. If this is the case any GBP and Euro gains over the last few days could be wiped out. The Euro CPI estimate for November moved up 0.6% from a year ago, its first forward move in 7 months and beat economists' expectations for a 0.4% rise after falling 0.1% the previous month. This data indicates that the gain was primarily led by rising energy costs and higher commodity prices and could continue to heighten price pressures across the Euro-zone as the economy recovers from its worst downturn since World War II. The ECB is expected to keep its current policy later this week as growth prospects remain poor. However the Euro is still keeping the Pound and Dollar under pressure.The Australian Dollar Australia's central bank has raised its benchmark interest rate by a quarter percentage point. This is the third straight month in a row and now points to the nation's economy could be strengthening. Bank Governor Glenn Stevens increased the rate to 3.75 percent from 3.5 percent Interbank Rates at 8.24 am UK TimeGBP-EURO 1.094GBP-USD 1.647GBP-AUD 1.795Major Data out todayUK Nationwide house pricesHalifax House Prices (1st-4th)DE Retail SalesEU UnemploymentUS Pending Home SalesCurrency Exchange Service

The types of contracts you use when making foreign currency transfers.

There are various types of contract you can use when making a currency transfer, depending on your requirements. A standard contract is called a Spot Contract and this is when you carry out an exchange from a live market and complete on that contract with immediate effect.Another option would be to book a forward. Forward contracts guarantee you a rate of exchange for a future date based on the current day's rate. A deposit is required to cover any adverse market movements, we work slightly differently to other firms in that we take a set amount but do not margin call our clients at any time. A forward rate can be secured up to two years ahead. Please note: Depending on your timescale it may not pay to buy a forward when the rates are poor. Limits orders are very good if you have time on your side, for example if the present rate of exchange for GBP-EUR is 1.11 and you wish to see if the market might move favourably to a rate around 1.13, then you can place a limit into the market at this rate. This order is held in the market 24 hours a day, 7 days per week and secures your buy order as soon as your target rate is achieved. Some clients can be concerned about the potential for the market to fall whilst they are running a Limit order, on such an occasion a client may wish to consider an OCO. This is when you run a limit to target a higher rate of exchange at the same time as running a Stop order to protect you if the rate falls. So as well as targeting a high of 1.13, you also place a Stop for 1.09. Again this will work for you 24/7 until either target rate is achieved, if the market starts to drop, it will buy your Euros at 1.09, protecting you from any further losses. Stop and Limit orders can be withdrawn from the market at any time up until the rate of exchange is achieved at no expense to the client.Remember to always take advice on what options are available to you.For any additional information, please feel free to visit Currency Exchange Service

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2005