The currency blog

The green shoots of spring are becoming increasingly evident in the property market after a quiet economic winter. Sales activity in the Tenerife South micro-market is picking up pace, continuing a trend that tentatively started in January, according to statistics from Tenerife Property Shop. Signs of recovery in property are not restricted to Tenerife, as markets over the world start report increasing confidence.

Activity at the moment is still centred around the bottom of the market, with over 70% of sales in the sub €150,000 sector, but there are signs that the trend is moving up the price scale. In both January and February, closer to 80% of all sales were in this bottom price bracket. Read the rest of this entry »

The market will turn its attention to the result of the MPC meeting plus any announcement pertaining to the recently introduced unconventional measures for monetary easing. Both are likely to disappoint with no-change in rates widely expected and no-change in their current Quantitative Easing programme. In fact the latter might not be mentioned at all….. Sterling, which has had a good run of late, especially against the beleaguered Euro, is seeing a touch of profit taking as we approach the long Easter weekend. The PPI and Trade figures will unlikely create any reason for a change in sentiment.
Last night we had the minutes of the last Federal reserve meeting which emphasised strong downside risks and continuing deterioration in the US economy. This has revived the economic worries reflective in the US and globally and the honeymoon period and investor rally following the G20 has now ended. The Dow turned negative falling 30 points and the risk aversion sentiment encouraged again more buying of US dollars and the Yen.
Elsewhere Australian unemployment jumped to 5.7% in March from 5.2% the previous month- this is the biggest monthly rise in 18 years…this will now heighten the call for more rate cuts in Australia following last weeks cut. Should be a quiet day today in UK with markets winding down for the Easter holidays..

This morning we see the euro under more pressure; against sterling it is knocking the door of key support at 0.90 or 1.1111 and the euro has also retreated against the USD back to 1.32. Yesterday Ireland unveiled its second budget of the year and as expected announced a large rise in taxes and a cut in spending- will this be the theme for other economies moving forward? With Irelands huge budget deficit the move was warranted and contradicts a move from other economies to increase spending and cut taxes to assist with the economic recovery.

Elsewhere in the euro zone ECB member Juergen Stark noted that it will take some time for market participants and the public to regain confidence in the banking system and it is this lack of confidence that should be feared; he also focused on the problems in Germany which has been severely hit by the waning global demand. Data released earlier from Germany showed the trade surplus unexpectedly widen to €8.9bn from €6.8bn as imports faltered. Key levels for the euro to hold will be EUR/GBP- 0.90, EUR/JPY- 1.30 and EUR/USD- 1.3150, a break in these crosses could lead to more pronounced euro weakness.

Sterling’s new found resilience was underlined by the lack of selling on the release of the Nationwide consumer confidence index early today. A small drop to 41 from 43 was reported for March but expectations of an imminent move back to 1.50 for cable has deterred any profit taking …… so far.
The JPY and USD have made further gains overnight in Asia, with risk aversion very much to the fore as Asian stock markets fell on poor corporate results. There is a lot of caution surrounding the U.S earnings season which has just started, and the release of Alcoa’s worse than expected March quarter loss has only served to heighten that caution. The Yen has strengthened back to 99.65 against the dollar on the fall in equities.

As the number of property bargain hunters scouring the market increases, and the best priced homes are getting snapped up quickly, some creative buyers are starting to look in unfamiliar places in order to secure a rock bottom price.

Good quality property…

The market is full of good quality property, yet many have spent many months looking for a buyer. The problem is often not one of location or condition, but simply that the price is too high. Overpriced homes just don’t enter into a buyer’s radar, especially if they are looking for a bargain. Because they have a budget, buyers will often not even consider property that comes above that amount, let alone view it. But even if they do happen to view an overpriced property listed amongst the many that they may have selected, it goes against human nature to offer substantially less than the asking price to a seller. It’s insulting to the seller and embarrassing for the buyer. Read the rest of this entry »

The pound has rallied 0.9090 to 0.90 against the euro this afternoon- 0.90 is a key level to break through. A break beyond here will leave the door open for 0.8850…

The month of April sees us moving into a more co-ordinated phase for our Dress Down Fridays and for all donations to charity. Last week we held The Big Charity Vote, where everyone voted for their favourite 9 charities from a list compiled from suggestions within the office. The charities with the most votes would be benefiting from all activities in that month and over the next 3 months the line up is: Read the rest of this entry »