Euro Skates On Thin Ice In Run Up To Christmas

…It’s the last currency blog of 2010 and what a year it has been for the exchange rates. For those buying or selling property whether as an investment or for reasons of moving abroad the movements that have occurred in exchange rates could have affected the cost of the property by 11 % for a property purchased in Euros, 15 % for Australian Dollars and 13 % for US Dollars over the past year.

To start with the short term weekly currency update for those needing to book a transfer before the end of the year, we are seeing a weakening Euro, strengthening US Dollar and reasonably subdued Pound to start off this week. Whereas the Pound is performing well against the Euro, its not so good news for anyone buying property in the US with the Dollar gaining on Sterling. Is this likely to change this week? The general reason for the current state of play is that ongoing debt issues in Europe are causing more and more nations from Ireland to Spain and Belgium to make headlines as their international credit ratings are pulled down by ratings agencies. This, alongside other events that bring uncertainty such as the tensions in North Korea, make currency investors nervous therefore pushing up safer currencies such as the US Dollar and Australian Dollar whereas riskier higher-yielding currencies such as the Euro tend to drop.

As is the case every week, there are some short term upcoming events that will cause movements that can be taken advantage of by speaking with myself to keep their eye on the rates for you. In particular this week, we see revision to UK GDP figures as well as the Bank of England minutes and also US GDP figures. If you have a transfer due now or in 2011 it is a good idea to discuss this in advance so you can be sure ensure that you book the transfer at the best time.

It will also be important to bear in mind that currency investors – those that indeed affect the exchange rates by the positions they take – will be choosing positions to keep their funds in for the Christmas period with the likelihood that larger safer currencies will be the most popular and therefore likely to strengthen. For the same reason, those currencies linked to commodities – the Canadian Dollar, South African Rand, and Australian Dollar may also do well.

For further advice or how to save thousands on your property purchase compared to the bank, protect yourself from currency movements or set up regular mortgage transfers, get in touch with the dedicated Property Secrets currency specialist: Nigel Hodges of Currency Solutions on +44 (0) 207 740 0000 or by clicking HERE to leave an enquiry.