Smart Currency Exchange: GBP drop due to heavy ‘year-end’ EUR buying [04/01/2011]

Smart Currency Exchange: GBP drop due to heavy ‘year-end’ EUR buying [04/01/2011]

Happy New Year! In our first currency note of 2011, sterling started the week slowly as UK markets were shut for the bank holiday. Sterling had a volatile end to 2010, dropping sharply on Thursday against the euro to hit 7 week lows which was attributed to heavy ‘year-end’ euro buying. The pound steadied on Friday though and gained against the US dollar after a house price survey by Nationwide showed that house prices rose by 0.4% in December against an expectation of a 0.3% drop. Data showed a 0.6% drop in November and as a result, many remain very cautious about the UK’s outlook for 2011. Today marks business as usual after the holiday period, and there is key manufacturing and lending data so call in now for a live exchange rate.

In the Eurozone, with much of the region closed for the New Year bank holiday yesterday, the euro took the lead from the US dollar falling by 0.6% against the US currency. The single currency gave back most of the gains it made last week against the US dollar after an article in the Daily Telegraph left many traders selling the euro after it claimed that Europe could face another debt crisis within months. There is German unemployment data released today, so call in now for a live exchange rate.

In the USA, in the country’s first trading day of 2011 there was an air of optimism on the markets. Manufacturing figures showed acceleration in production for December showing an increase for the 17th month in a row. Investors felt happier taking risk also after data showed that manufacturing data slowed in China and India that eased concerns over possible overheating in the region. Call in now for a live exchange rate to ensure you get the best price.

Elsewhere, the Brazilian real closed at the highest level since September 2008 yesterday, boosted by optimism over the global recovery that saw investors put money into the high yielding currency. It shows that the emerging market currencies are likely to see similar volatility to last year so ensure you are adequately protected by speaking to one of the team sooner rather than later.

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