The currency blog

CD market commentary quoted in the Daily Bourse in France…

http://www.daily-bourse.fr/le-dollar-remonte-apres-avoir-flanche-la-veille-Feed-AFP090513131158.iwyp9kpy.php

With sellers in certain regions of France remaining stubborn when it comes to dropping their prices, increasing numbers of prospective buyers are looking at new builds for their dream home abroad. Given that it typically takes between 18 – 24 months on the build process any movement in the exchange rate has a big impact, especially during highly volatile periods spanning a number of staged payments. Read the rest of this entry »

Sterling has slumped lower following this mornings Quarterly inflation report by the Bank Of England emphasising a slow and uncertain recovery. The inflation report is the first since the introduction of QE in March and the report was eagerly awaited to assess the inflation projections in the UK.  Mr King was downbeat in his assessment of the UK economy and emphasized the uncertainty in the economy stating “it would be extremely unwise for anyone to claim they know what the future is to hold” and he also intimated that there would be no end to credit easing and interest rates will remain low for the foreseeable future. So not particularly cheery from Mr King and this certainly takes the shine off yesterdays “green shoot” declarations from various economic pundits for the UK- in fairness a conservative approach is sensible to avoid the market trading on sentiment rather than reality.

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As feared yesterday we witnessed a sharp bout of profit taking in the equity markets as investors took the opportunity to lock in their profits after a 5% rally last week. The move may have been catalysed by the fact that several large US banks were looking to use common equity issuance to raise funds in order to repay borrowings from the Government. In addition Ben Bernanke then seemed to put a short term top on the market surge by focusing on the dangers of inflation and the timing of an increase in interest rates by the Federal Reserve. HSBC also released results that although in line with expectations, failed to impress the markets. The knock on effect in the currency markets was a swing back into the USD and YEN and selling pressure on all the higher yielding currencies especially the AUD and the ZAR. In late afternoon the equity markets did stage a slight recovery and this demonstrates good underlying sentiment which could lead to further gains going forward.

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A big week in the markets last week saw the release of interest rate decisions in the UK and the Eurozone and the results of the stress testing of 19 US banks. To summarise we saw the UK add another £50 billion to its quantitative easing programme, the ECB cut rates by 0.25% and launch a programme to buy €60bn of covered bonds. In the US the results of the stress testing demanded that 10 of the largest US banks raise $74.6 bn for a worst case scenario.

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Good news has come at last for the British couple whose £600,000 Spanish villa was demolished over supposed building irregularities. Len and Helen Prior, who retired to southern Spain from Berkshire six years ago, have been told the demolition was illegal.

Home demolished

The couple in Vera, Almeria were the first British expatriates to have their home demolished after the Spanish authorities clamped down on the widespread flouting of planning laws.

The couple however, have always insisted they had the correct planning permission as issued by their local town hall.

Demolition carried out illegally

Spain’s Constitutional Court ruled recently in favour of the Priors and said that the demolition had been carried out illegally. It ruled that the Priors had not been made aware of a crucial court case in which the building’s fate was decided. The couple now plan to use the ruling to support their claim for compensation.

Mrs Prior, who has been living along with her husband in a garage on the site of their former home without access to mains electricity or water for the past 15 months, said: “We’ve been fighting our corner ever since the demolition and this is a major victory for us.

“The Constitutional Court has ruled the authorities acted illegally when they knocked down our home. We still haven’t had a penny in compensation but we are now in a stronger position to claim,” she said.

The Priors have already spent more than £25,000 on legal fees and now plan to sue the Ministry of Justice and the regional government who issued the demolition order, claiming the property was built on protected land.