Surprise Dollar & Sterling Movements

Over the past week, the pound has seen an unexpected leap in strength against the US dollar. After several very strong weeks of positive US data, the US Federal Reserve chief, Ben Bernake, made a serious of comments in which he stated his belief that further improvements in the American labour market would require faster economic growth.

This was seen by some as an admission of weakness in the overall US economy, giving sterling a boost that had led to a 4 ½ month high against the American currency, giving us the best rates for international payments from sterling to dollars that we’ve seen all year. However, any major growth was put off by fears that the Bank Of England might put forward more QE measures in the future, fuelled mainly by Bank Of England policymaker David Miles stating that the UK economy appears to have stalled, with very low growth rates over the last six months.

 The big news for the UK economy in the past week was, of course, the budget. Despite being incredibly poorly received by the media, the markets seem to have reacted in a small, albeit positive manner, with no major shifts being seen as a result of it. Generally in anticipation of a new budget we see large fluctuations in market in the days preceding and immediately following it. Luckily we seem to have avoided it this time, with exchange rates remaining more or less unchanged.

News remains grim for the Eurozone once again this week. Despite not losing much ground against sterling, the common currency remains weak, still giving us strong rates for transferring sterling to euros. Furthering concerns about the state of the Eurozone, the Organization for Economic Co-Operation and Development today stated that the Eurozone needs to double its bailout fund to 1 trillion euros in order to save the weaker economies, although this is unlikely to happen. The Spanish economy also fell back into recession, shrinking 0.3% at the end of 2011. German Chancellor Angela Merkel spoke with the BBC earlier this week, stressing that she doesn’t believe Greece will leave the Euro, nor does she think it will be beneficial. This solidifies the idea that, if the Euro IS to collapse, it won’t be doing so any time soon.

In the news for more exotic currencies, Japan saw its cooperate service prices fall 0.6% over the past year. Whilst the Japanese economy remains strong, anyone interested in sending money to Japan should bear in mind that the yen is currently vulnerable to selling ever since the Japanese government announced monetary easing measures last month.

Are you looking to buy property in USA ? Florida , Ca , Cape Coral , Detroit , Buffalo

Are you looking to rent property in USA ? Austin , Kissimmee , New Orleans , Park City , Breckenridge