Euro bashing rests for porfit taking

However the pause in its recent decline is more to do with profit taking than a reversal of the currency’s fortunes. 

Today's Financial Times suggests that £7 billion of short trades are weighing against the eurozone's immediate currency prospects.


We did see both Euro and Sterling hit 8 month lows overnight as the Asian markets rushed to buy the perceived safe haven US Dollar but once again, proximity to support levels was enough to bounce both rates as Europe entered the fray. 

The concern for Euro bulls is that recovery attempts seem very limited in scope and small in magnitude. 

The rally for the single currency in the US last night was snuffed out by the combination of a late sell off in equities and an expectation that Bernanke’s testimony this evening could very well signal a more hawkish Federal Reserve outlook, with speculation that he might lay groundwork for a tightening of monetary policy.

Yesterday’s markets, outside the late US fluctuations, were largely extremely boring with traders waiting for developments (either good or bad) on the Eurozone Sovereign issue. 

Nothing much happened. The Spanish Finance minister was in London talking to bond holders and the Portuguese and Greek governments were both vocal in their defence of their respective fiscal positions Data again is light today with UK trades and US wholesale inventories the highlights. 

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Currency markets future directions

US Dollar and Sterling should continue to improve against the Euro and Yen for the short term at least.

With the presumption being that the improvement in performance for both economies can be traced back to their recently acquired, more competitive exchange rates. 

Large moves in the next day or so, do look limited however, given the upcoming monetary meeting in Europe and the UK and given that much of the Euro’s recent weakness has been as a direct result of negative news from Greece. 

It has to be assumed that most, if not all, the bad news has been priced in by markets now and the currency might be set for a bit of a lift as it benefits from an increase in risk appetite. 

The Euro itself looks unlikely to surge however, given the likelihood of IMF intervention in Greece’s affairs and for those precious metal aficionados out there, it is worth noting that at present, Greece holds over 71% of its foreign reserves in gold, which at the end of December stood at just shy of $4 billion. Watch the gold price after the IMF have been in …..

Overnight the Reserve Bank of Australia surprised all but a few by leaving their official interest rates at 3.75 % against the expectation of a 0.25% increase, citing the lack of credible information so far on the effects of the previous increases, thus judging it appropriate to hold rates steady for the time being. 

The Aus$ dropped sharply on the release but stabilised on a later caveat from the RBA that if the economy continued to improve, as has been witnessed over the recent period, rates would need to be raised further. The currency held at around 88 cents versus the US$ but given the anticipated continued demand from China for global commodities.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Wise Money forsees a volatile week ahead

It’s a big week for the currency markets with a number of events that will most certainly add to the already volatile conditions which we saw in January.

The Euro has continued to slide against the Dollar over the weekend as concerns that Greece's budget problems may spread continue to weigh on the single currency. 

Recent data from the Commodity Futures Trading Commission has shown that bets on a further decline now stand at the highest level in over a year. A strong Q4 US GDP figure (and subsequent stock market gains) on Friday further supported the dollar positive sentiment and helped the greenback reach a four-month high against the Swiss franc and a three-week high against sterling as signs the world's largest economy is gaining momentum spurred investors to buy U.S. assets. 

Reports due later today are also expected to show that show U.S. manufacturing expanded for a sixth month and household purchases rose.

In the UK, attention this week will focus squarely on the Bank of England's policy decision on Thursday and what this will mean for the future of the asset-purchase facility. 

With the property market showing signs of strengthening and the economy exiting recession, the MPC may move towards pausing it's emergency bond purchases after buying 200 billion pounds so far.

UK data earlier this morning showed that house prices rose for a sixth month in January as a shortage of homes for sale supported property values. However, prices were still down 0.8% from a year earlier.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Higher yielding currencies early 2010 gains

Positive interest in many Far Eastern and Antipodean currencies continues as investors look to the Asian and Pacific regions for the most likely currency appreciation during 2010. 

Apparently confirming the view, a researcher at the China Academy of Social Sciences (a Chinese Think Tank) told reporters that the Renminbi should be revalued by a one-off 10%. This, though, was mis-translated apparently with the Chinese version reading, they ‘think that it is good to push for a 10% rise but that NOW is NOT the right timing’. 

Despite this, the mood is set for gains in the region with just the Yen bucking the trend, having started to lose its recent upward momentum. As mentioned previously, the gradual widening of the interest rate differential between the Yen and the other major currencies, favour its return back to the funding currency of choice. 

The resignation of the Japanese Finance Minister, Fujii on health grounds (he had been viewed as a steady hand on the tiller on the back of his considerable experience in markets) leaves a big gap in the government’s ranks ahead of an important financial period and a crucial debate on fiscal policy. 

His withdrawal from the fray also makes intervention much less likely, negating the possibility of official support for the Yen if the market does start to push it back towards 100 versus the Dollar.

The trade of the year call however is to be short Sterling / Aussie now that the strong support at 1.7700 has broken. Talk is for a move down to 1.6000 which, unless you view Cable as being a non-mover, suggests a move in Dollar/AUD down towards, but not through, the parity level. 

This backs up the argument that commodity currencies will dominate proceedings during the early stages of the year with the Aussie, Kiwi and Canadian Dollars the punters favourites.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Market confidence resumes

It was back to business as usual in the markets as the search for yield gathered momentum. 

The big loser was the Japanese Yen surpassing the US Dollar as the currency of choice to sell in the thirst for yield. The recent stimulus from Japan and recent verbal attempts to weaken the currency are finally starting to undermine the Yen; USD/JPY is heading back towards 88.00 and GBP/JPY is back up at 146. 

The recovery trade is glaringly apparent again with equities gaining- the Nikkei up 3.3%; Gold hitting new highs and Oil gaining.

EUR/USD is still pushing north although momentum has slowed sue to the market awaiting the ECB rate decision at 12:45 today. As usual it will be the press conference following the decision that will be closely eyed. 

What the market will be scrutinizing is the potential for a shift in the terms that the ECB offers funding to banks on a long term basis- previously a spread of 1% was utilized. What they could look to do is raise the tender or remove it completely and leave it floating- both moves would be considered hawkish and thus euro bullish.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

What will the impact of the situation in Dubai be?

Well so far, nobody is really sure. Given that both Abu Dhabi and the UAE Central Bank have quickly come forward to assure markets of their support for the beleaguered Emirates State, then the financial impact should be quite minor. 

Certainly, there will be repercussions for Western lenders and there is no guarantee that Dubai’s ‘fairy godmother’ will stand behind its liabilities carte-blanche but equity markets are viewing the situation as containable.

The potential problem is any growth in concern over global Sovereign stability and the fact that CDS spreads have continued to widen suggests that even though things look calm on the surface, there is a lot of thrashing about below the surface. 

If things do begin to look a little dire, then expect the Dollar to come back into focus as risk aversion trades re-emerge.

Despite markets starting to draw their horns in for the run up to Christmas, there might be just time for one more spate of trading especially if the support for Dubai offered from the UAE Central Bank is less rather than more. 

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Currency Converters foreign exchange forex services

To order your foreign exchange holiday money cash deliveries in the UK for amounts less than £4,000, $5,000 or €5,000
Or for amounts of currency over £4,000, $5,000 or €5,000 please call 0845 389 3000 and ask for a no obligation, free consultation with theexclusive Wise Money business forex service or complete the online enquiry form

Specialists in selling foreign currencies and traveller's cheques. Our travel money service offers commission free currency at highly competitive rates.

Avoid the queues, unnecessary journeys and order your travel money from the comfort of your own home or office. Then let our speedy next working day delivery service to take over to ensure your money arrives at your door safely.

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Please note: Orders received before 12:30 pm on Friday will be delivered the following Monday. Orders received after 12:30 pm Friday or placed on Saturday and Sunday, will be delivered the following Tuesday. Special arrangements for Bank Holidays will be advertised on the site at the time.

There is absolutely no service fee or commission on the currency exchange transaction. There is a £4.95 handling fee to cover the cost of delivery and insurance. Orders over £300 when paid for by debit card and bank transfer will receive free delivery please select this option in the shopping cart.

Payment can be made securely over the Internet with any card bearing the Switch, Delta, Visa, MasterCard logo or by cheque, chaps, swift.

We also supply commission free, American Express Travellers Cheques, with the peace of mind offered by free insurance against theft and loss and a 24-hour replacement service.

To order your foreign exchange holiday money cash deliveries in the UK please click here now for amounts less than £4,000, $5,000 or €5,000

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Wise Money testimonials from happy customers

Wise Money Testimonials- below are kindly reproduced only some of our recent clients comments after we helped them:

Commercial Finance
"I have really appreciated your approach of the financing business. This is, to my opinion, the best way to build a good reputation in this world full of crooks and brokers and lenders who are proposing financing with a lot of hidden cost." Mr MK of Switzerland.

Refinancing
"Dear Simon, I am very impressed with how you and your company handles situations, never in my life has any company treated me with such respect as to feel as if I were your biggest patron. So I now bid you a good day and I look forward to continual business with you"- Mr N.S., USA.

Mortgages
"Thank you all at Wise Money for being so patient and helping me all of the way through with my mortgage application process- it certainly helped to have someone on my side."- Ms N.B., UK.

Currency Converter
"The opening of accounts and close contact for exchange rates has meant I have achieved a far better exchange rate than was expected. I would have no hesitation to recommend your company to others and look forward to many more dealings in the future."- Mr JH. of UK.

"Despite the time differences, our money was transferred from our UK bank account to our Australian bank account within 48 hours of contacting WiseMoney- and we saved considerably on the exchange rates, thanks."- Mr &Mrs AJ. of Australia.

Travel Insurance
"Thanks- your total travel insurance quote for our party of 4 people was actually cheaper than the quote just myself that the travel agency quoted me."- Mr S.B., UK.

Car Insurance
"I saved well over a quarter off my quote with your motor car insurance quote- many thanks!"- Mrs P.S., UK.

Home Insurance
"Cheers- I saved nearly a third off my original quote with your home insurance quote!"- Mr M.K., UK.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Travel money- great value currency converters through wise money

To order your foreign exchange holiday money cash deliveries in the UK for amounts less than £4,000, $5,000 or €5,000
Or for amounts of currency over £4,000, $5,000 or €5,000 please call 0845 389 3000 and ask for a no obligation, free consultation with theexclusive Wise Money business forex service or complete the online enquiry form

Specialists in selling foreign currencies and traveller's cheques. Our travel money service offers commission free currency at highly competitive rates.

Avoid the queues, unnecessary journeys and order your travel money from the comfort of your own home or office. Then let our speedy next working day delivery service to take over to ensure your money arrives at your door safely.

Place your order before 12:30pm and your money will be delivered by fully insured special delivery by 1.30pm the next working day.

Please note: Orders received before 12:30 pm on Friday will be delivered the following Monday. Orders received after 12:30 pm Friday or placed on Saturday and Sunday, will be delivered the following Tuesday. Special arrangements for Bank Holidays will be advertised on the site at the time.

There is absolutely no service fee or commission on the currency exchange transaction. There is a £4.95 handling fee to cover the cost of delivery and insurance. Orders over £300 when paid for by debit card and bank transfer will receive free delivery please select this option in the shopping cart.

Payment can be made securely over the Internet with any card bearing the Switch, Delta, Visa, MasterCard logo or by cheque, chaps, swift.

We also supply commission free, American Express Travellers Cheques, with the peace of mind offered by free insurance against theft and loss and a 24-hour replacement service.

To order your foreign exchange holiday money cash deliveries in the UK please click here now for amounts less than £4,000, $5,000 or €5,000

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Currency Converter Services at Wise Money

Currency Converter Services at Wise Money

To order your foreign exchange holiday money cash deliveries in the UK for amounts less than £4,000, $5,000 or €5,000
Or for amounts of currency over £4,000, $5,000 or €5,000 please call 0845 389 3000 and ask for a no obligation, free consultation with theexclusive Wise Money business forex service or complete the online enquiry form

Specialists in selling foreign currencies and traveller's cheques. Our travel money service offers commission free currency at highly competitive rates.

Avoid the queues, unnecessary journeys and order your travel money from the comfort of your own home or office. Then let our speedy next working day delivery service to take over to ensure your money arrives at your door safely.

Place your order before 12:30pm and your money will be delivered by fully insured special delivery by 1.30pm the next working day.

Please note: Orders received before 12:30 pm on Friday will be delivered the following Monday. Orders received after 12:30 pm Friday or placed on Saturday and Sunday, will be delivered the following Tuesday. Special arrangements for Bank Holidays will be advertised on the site at the time.

There is absolutely no service fee or commission on the currency exchange transaction. There is a £4.95 handling fee to cover the cost of delivery and insurance. Orders over £300 when paid for by debit card and bank transfer will receive free delivery please select this option in the shopping cart.

Payment can be made securely over the Internet with any card bearing the Switch, Delta, Visa, MasterCard logo or by cheque, chaps, swift.

We also supply commission free, American Express Travellers Cheques, with the peace of mind offered by free insurance against theft and loss and a 24-hour replacement service.

To order your foreign exchange holiday money cash deliveries in the UK please click here now for amounts less than £4,000, $5,000 or €5,000

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Wise Money view- risk aversion reigns again

For currency traders, the G8 was notable solely for what was not said and for who was not there.

Rhetoric suggested the summit would be the “high noon” for the dollar as a reserve currency, as China pushed for a more diversified anchor for foreign exchange.

But currencies are not even mentioned in the draft communiqué. China’s premier was not present for the discussions, thanks to trouble at home. The showdown on the dollar’s future did not happen.

Rather than dancing to the tune of the world’s leaders, forex markets suffered a new wave of aversion to risk.

That wave started in the commodities market, where prices dipped sharply. The CRB index, a broad index of commodity prices, dropped to its lowest level since early May, pushing below its 200-day moving average – a strong signal that its rebound of the past few months was over.

The CRB is down more than 12 per cent since it topped out last month and is 51 per cent below its high set last year. This implies that deflation – falling prices and stalled economic activity – is a much greater risk than the resurgent inflation that was being talked about only weeks ago.

Gold, an inflation hedge, fell 2.2 per cent and is now down more than 10 per cent since it hit $1,000 per ounce in February.

In currencies, the Japanese yen, which gains when people are anxious, made dramatic and sudden gains against the dollar and the euro. This could increase pressure to intervene to keep the currency cheap.

These developments are alarming. The pendulum in the debate between inflationists and deflationists has swung back to the deflationists – at a point that inflation still looks the lesser evil.

But at least risk aversion will help the dollar avoid further falls and delay the moment when it is replaced as a reserve currency.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Hesitant start for Asian markets

Markets got off to a hesitant start Monday as investor doubts on the staying power of a global recovery kept Asian stocks soggy and currencies subdued ahead of a much expanded Group of Eight meeting this week.

Japan’s Nikkei slipped 1.58 per cent to 9,661.27, while the MSCI index of Asia ex-Japan eased 1.1 per cent to 319.61.

The air of caution kept the US dollar and bonds supported as safe-havens, while pressuring commodity prices. Crude oil futures were down at five-week lows of $65.00 a barrel.

Investors were still smarting from last week’s dismal US payrolls report which put a question mark over the recovery there, and thus across the globe.

Stock bulls had been hoping for something more ”V”-shaped and the disappointment was clear in Thursday’s 2.9 per cent drop in the S&P 500. Having skipped a session on Friday for the Independence Day holiday, S&P 500 stock futures were off 0.86 per cent in Asia at 885.90.

That implied the cash index was perilously close to breaking major chart support of a head and shoulders pattern.

Investors were also wary ahead of the Group of Eight summit in L’Aquila, Italy on July 8-10, which has been expanded to include China and a host of developing nations.

China last week floated the idea of discussing the US dollar’s place as the sole international reserve currency, causing a brief dip in the currency.

The G8 pushed back, however, with a source telling Reuters there was no appetite for such a momentous change.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

US stress tests of banks a focal point for Wise Money

The results of the US banks stress testing is expected tomorrow after the markets in New York close.

This is to be followed by a press conference from the Banks involved on Friday at which one would assume, they will argue their opposition to the findings. Rumours and articles abound this morning concerning Bank of America with estimates that the Bank will be ‘asked' to get hold of $34 billion of fresh capital following the stress testing.

This is about 3 times the original expectation and raises concerns over the total amount that might need to be raised by the other 9 major banks involved. This invoked a move away from riskier currencies and perversely into the US Dollar which enjoyed an afternoon of demand. Equity markets were subdued with a small drop in the DOW recorded.

The original stated purpose of the stress tests was to increase confidence in the US banking system, but the market feels like the end result has been almost exactly the opposite.

Sterling has rallied nicely against the dollar on the back of better than expected UK services PMI data for April, which rose to 48.7 from 45.5 in March, some way above the median forecast of 46.3.

It is the highest reading since August 2008. The pound is also gaining slowly against the euro ahead of the ECB rate announcement tomorrow.

In the fx markets the overall general sentiment aside from the stress testing is still motivated by equity movements- the recent increase in risk sentiment has definitely helped any currency with yield- the AUD, NZD and ZAR all performing strongly overall recently and the USD and YEN losing ground.

Another mover has been the Canadian dollar which has appreciated 5.5% since mid April- this largely due to Canada holding off the introduction of printing money to buy up debt assets- however a strong currency will dampen the demand for exports in Canada which have already fallen sharply.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Manic Monday on the currency converter forex markets

Yesterday we saw dramatic swings in the foreign exchange markets with the Pound being the protagonist.

GBP/USD retreated from Fridays 1.43 down to a low of 1.3750 yesterday; the pound also lost 4% against the Swiss francs from last week's levels and 2.5% against the euro.

The reason for the sell off was related to the labour government increasing its stake in Lloyds banking group from 43% to 77% and also to rumours that Barclays may be next in line for the communist takeover. Investors fear the nationalisation of banks and the fact that further capital is required, may lead to uncertainty in the rest of the banking sector.

Looking at this mornings trading we have witnessed a slight recovery for the pound against the dollar even against the back drop of further weak data in the housing and manufacturing sectors.

It now seems that the economic slowdown is reaching a truly global perspective as the IMF has confirmed that growth in Sub-Saharan Africa will slow to 3.25% in 2009 which is half of previous estimates.

Although investment exposure is very minimal it is the slowdown in demand for products and in particular commodities which is the biggest contributing factor.

Closer to home a similar pattern can be seen in Germany as exports slumped by a fifth in January, here the problem again is the slowdown in demand coupled with the recent strength of the euro.


The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Bernanke talks currencies....

The US Dolar strengthened yesterday afternoon on comments made by Fed Chairman Ben Bernanke.

Breaking with tradition and commenting on currency matters, typically the domain of the Treasury Secretary, Bernanke made clear the US does not want any further USD weakness given the risk this poses to inflation.

Bernanke also commented that interest rates are well positioned to promote growth and stable prices signalling the Fed is done cutting borrowing costs. The dollar rallied 0.2% against sterling and 0.6% against the euro. Oil and gold prices also fell following the comments to $126 and $875 respectively.

Earlier in the day European GDP growth came in stronger than expected at 0.8%, beating analyst forecasts of 0.7% for the first quarter. Investment and construction spending helped the region weather record oil prices and impacts of the stronger Euro.

Annual growth at 2.2% was on par with expectations. Any gains the Euro made were erased by the comments made by Bernanke later in the day.

This morning Nationwide has already released its UK consumer confidence survey which fell to its lowest level since 2004. Cost of living increases and negative housing sentiment continuing to concern consumers.

These are key themes the BOE will be considering ahead of its interest rate announcement tomorrow. The latest Bloomberg economist survey had all 60 polled economists expecting the BOE to leave rates unchanged.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.

Currencies boosted by Bernanke

The US government bond prices hit one-month highs as investors took heart after Ben Bernanke, chairman of the Federal Reserve, said inflation is easing.

Weaker-than-expected data encouraged the bond bulls who felt Mr Bernanke’s comments heralded interest rate cuts in the face of slowing US economic growth

Testifying before Congress, Mr Bernanke offered a balanced assessment that contrasted with that of other recent Fed members who had emphasised the risks of further rate increases.

While inflation remained the primary concern, he indicated that “the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing of core inflation”.

However, investors focused on a perceived change of tone, as Mr Bernanke listed reasons to expect inflation would slow, including falling energy prices and the potential for accelerating incomes to be offset by higher productivity or lower corporate profit margins.

Investor concerns about the housing market were fuelled as starts data fell 14.3 per cent in January to a 10-year low.

US producer prices were also released, shrinking slightly more than expected in January, as energy prices declined sharply. On Thursday, a weak reading of business conditions in the mid-Atlantic region followed reports showing a surprise fall in industrial output and a surge in jobless claims.

The yield on the 10-year benchmark US Treasury was 1.6 basis points lower on the day at 4.694 per cent, down from 4.815 per cent on Monday. The two-year note yield was 0.9bp lower at 4.835 per cent, down from 4.929 per cent on the week.

The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.