Thursday, July 31, 2008

Australia faces Recession

Australia's Choice: Interest rate cut or a recession

IT'S official, the Reserve Bank Of Australia has gone too far with its relentless run of interest rate rises, with economists now calling for urgent rate cuts to save the country from full-blown recession. Grim economic data released by the Australian Bureau of Statistics yesterday had our leading economists fearing the worst, with some claiming a retail recession has already arrived.

The data showed sales for the first half of 2008 had experienced the biggest slumped since records began almost 30 years ago. Morgan Stanley economist Gerard Minack said sales had fallen so dramatically it was placing thousands of jobs at risk.

"It can only be a matter of time before retailers - the largest single employer in the country - start to fire their workers," he said. The ABS figures show consumers, battered by interest rates, soaring fuel and food prices and rapidly rising rents, have dramatically reined in their spending in almost every category.

AMP Capital chief economist Shane Oliver urged the bank to drop rates immediately to ease the consumer pain and steer the economy out of recession. "The RBA went too far with its rate hikes. Nobody wants to see retail spending falling as quickly as this," he said.

The Pound to Australian Dollars today took a battering and the best australian dollar exchange rate is currently 2.1000

The average house price is down £15,000 in the past year

GfK reported consumer confidence down to -39 in July, from –34 in June and the lowest since the data began in 1974. It’s the 11th consecutive drop and “desperately negative,” according to Market News London, in part because during the last recession in the early 1990’s, the index moved in a range between -2 and –34. This was when the pound was being ignominiously chucked out of the ERM,

so for today’s confidence to be lower is really saying something.

Meanwhile, the median pay deal is the same 3.5% in June and 3.8% in the most recent three months. This is considered good because it’s not an acceleration—-but it’s still a wage-push level.
Nationwide reported July house prices down 8.1% y/y, the 9th monthly drop and the biggest since 1991. The drop is acclerating from 6.3% in June. On the 3-month basis annualized, the rate is 19% from 15.6% in June, according to the FT report.

The analysis includes comparison to the early 1990’s, when house prices fell by more. The average house price is down £15,000 in the past year (and now only £11,000 higher than three years ago). The average UK house price is £169,316 in July compared with £172,415 in June and £186,044 last October, Nationwide says. This is still over the average US house price and by a lot.

Bye for Now

Barbara Rockefeller

Remember for best exchange rate get a free quote from IMS Foreign Exchange

Golly, maybe we don’t have a recession.

Foreign Currency Exchange Outlook : The calendar is rich today, with Q2 “advance” GDP probably the one with the potential to move the Foreign Exchange market. The consensus is a real 2.3% y/y, based in part on $78 billion in stimulus checks, so a bad number (under1.5%) would be dollar-negative. Bloomberg reports that the survey range is a wide 0.9% to 4.2%. Obviously, 4.2% would be dollar-favorable. Market News has a forecast range of 1.7% to 3% and a median of 2.1%, and notes that “The lowest GDP estimate is still far higher than the 1% final seen in Q1 2008 and +0.6% seen in Q4 2007.”

More interesting is the question of how you can have a recession without getting the conditions that define a recession—two quarters of negative GDP.

There is a sense that you can have a recession without meeting the definition if everyone agrees it feels like a recession.

We do not agree. Definitions count. If GDP is not doing the job, get another definition. How about falling employment or rising unemployment? We think employment is probably lagging and not leading, but let’s say for the sake of argument that it’s a good indicator. Today we get first-time unemployment claims— with the forecast for a 9000 drop instead of the usual rise. So that one doesn’t work, either, at least not this week and not if you have a bias to find recession somewhere, anywhere.

Golly, maybe we don’t have a recession.

Economists, according to a Bloomberg survey, put the odds of a recession down at about 50% from 70% in April. The NBER is the arbiter and sticks to the idea that recession is a “significant” drop in activity over a sustained period of time, usually taken to mean 2 quarters. Decline should be visible in GDP, payrolls, production, sales and incomes. Well, we’re not getting it except in employment, where job losses are about 500,000 so far this year, according to Bloomberg. A lot of time is being wasted looking back at the 2001 recession, which was over before the NBER had decided on using the word. Merrill Lynch’s Rosenberg, however, points out that Q1 2001 GDP was originally reported up 1.2% and only later revised down to a 0.5% drop.

The world is gradually changing cyclically. Emerging markets like China and India are in more trouble than they are admitting and can be expected to slow down. Western economies are stable and not as weak as some headlines would try to scare us into believing.

A commodity bubble bust would be healthy for everyone and help restore some balance, but the status quo before the oil crisis was not exactly stable and balanced. With various factors in a topsy-turvy condition, including the Fed lending buckets of money practically to all comers on questionable collateral, we are having a hard time believing in the US dollar rally. Oil simply must resume its downmove for the dollar to hang on to gains, let alone make new ones.
Weirdly, we have two medium-term technical analysis systems.

One has a strong sell signal and the other has a strong buy signal.

This is maddening. Watch out.

If you are risk averse, this is a good day to get square and stay that way until Sunday night.

Buy for Now

Barbara Rockefeller

House prices drop 8.1pc

House prices drop 8.1pc, says Nationwide

By Stephen Adams

House prices have tumbled 8.1pc in the past year, a record rate of decline, figures from the Nationwide show.

The pace of annual decline is unprecedented since the building society started its monthly house price index in 1991. Property values dropped 1.7pc in the last month alone. The rate has more than doubled in a single month from a 0.8pc loss in June.

The average property has shed almost £17,000 in value since prices peaked last October, coming down from £186,044 to £169,316 - the lowest level since August 2006.

Fionnuala Earley, Nationwide's chief economist, said: "The price of a typical house fell by 1.7pc in July, bringing the annual fall to 8.1pc. "This brings the average price to £169,316, almost £15,000 less than this time last year and its lowest level since August 2006.

"House prices have now been falling for nine consecutive months, but on average are still almost £11,000 higher than three years ago."

The figures follow a prediction by Standard & Poor's, the world's largest credit rating agency, that one in seven British home owners could fall into negative equity over the next year.

Miss Earley warned "fairly poor" economic data and the collapse of retail sales in June suggested economic conditions were weakening, but she added there was "encouraging news for the housing market".

"Only a month ago the market was expecting the Monetary Policy Committee [of the Bank of England] to increase the Bank Rate twice this year: they now expect no change." This had aided 'swap rates' - which help determine fixed interest mortgage rates - to come down, she

Pound to Euros is lower today at 1.2650

Wednesday, July 30, 2008

Euro broken down technically

Hi all,

today we have seen a massive move in the Euros to US Dollars and the Euro Pounds exchange rates as they have broken technical support and the Euro currency looks set for a battering.

have a read of Barbara Rockefellers report and you can see the Euros fall from grace

Rockefeller Currency Report Click here

This report normally is free for 2 weeks IMS Foreign Exchange readers

if you want to take up the free trial click here!

for the best exchange rates contact IMS Foreign Exchange

Tuesday, July 29, 2008

NATIONAL Australia Bank increases home loan interest rates

NAB increases home loan interest rates

NATIONAL Australia Bank has become the latest bank to turn the screws on homeowners, hiking its standard variable rate by 15 basis points to 9.61 per cent.

The new rate, which takes effect from tomorrow, will add just over $7 to the weekly repayments on a $300,000 mortgage taken out over 30 years.

NAB is playing catch-up to other major lenders who have already pushed through rate hikes.

On Friday the Commonwealth Bank of Australia lifted its rates by 14 basis points, pushing up its standard variable rate home loan to 9.58 per cent per annum and its basic variable rate to 9.07 per cent.

ANZ also pushed through a sneaky 15 basis point rate rise late on Friday afternoon, after the share market closed. ANZ’s new standard variable rate of 9.62 per cent came into effect today.

St George Bank was the first major lender to move in this latest bout of rate hikes, raising its standard variable rate by 20 basis point to 9.67 per cent on July 4.

Meanwhile, AMP Bank also said it would increase its standard variable home loan interest rate for existing customers by 0.20 per cent, to 9.67 per cent. The standard variable rate for new customers will increase by 0.11 per cent to 9.67 per cent per annum. The changes take effect this week.

The banks have once again moved independently of the Reserve Bank of Australia, which opted to keep official rates steady at a 12-year high of 7.25 per cent when it met on July 2.

The banks have all cited higher borrowing costs as the main reason for raising rates. Banks are finding it more expensive to source money for borrowers.The sub-prime crisis - which was sparked when US lenders lost billions of dollars on bad loans - means banks have pay more for the money they borrow to lend to consumers.

For the Best Australian Dollar Exchange Rates and Australian Mortgages contact IMS Foreign Exchange

Monday, July 28, 2008

More on the Big Mac Index

More on the Big Mac Index. One of my favourites

The Economist magazine published its most recent Big Mac evaluation, finding that the yen is 27% undervalued against the dollar, the euro is 50% overvalued and the pound is 28% overvalued. China is 49% undervalued. The survey compares the price of a single item, a McDonald’s Big Mac hamburger, around the world. Except for the yen, everything is overvalued against the dollar and more overvalued than a year ago. The IMF found last week that the dollar was properly valued although the euro was overpriced.

Australia & New Zealand Banking Group Ltd

Australia & New Zealand Banking Group Ltd (ANZ) said earlier today its 2008 earnings per share were likely to fall between 20% and 25% on the previous year due to a rise in credit impairment costs. The bank, Australia's third largest mortgage lender, said it was likely to make provisions in the second half of around 1.2 billion Australian Dollars ($1.1 bln) as a result of the ongoing deterioration in credit markets.

If you need an Australian Mortgage? IMS FX can help contact us at

Pounds to Australian Dollars best rate 2.0755

Australian Home sales jump in June

Home sales jump in June

Australian Home Sales posted strong growth in June but activity in the first half of 2008 was still weak as borrowers battled high interest rates, new data shows.

A Housing Industry Association (HIA) survey of the nation's 100 biggest builders and developers found that house and unit sales rose by 4 per cent last month. Detached house sales increased by 2.6 per cent while volatile multi-unit sales jumped 15.5 per cent in June. But home sales rose by just 0.4 per cent in the first half of 2008.HIA chief economist Harley Dale said momentum had fallen during 2008.

"The soft result for new home sales will actually prove to be a slightly better outcome than evident for building approvals or new home lending figures, both of which will show a fall over the first half of 2008," he said."

Australia is seeing strong demand for housing fuelled by record year on year immigration.

"Clearly production of new housing needs to at least capture this demand."

In June, New South Wales posted the strongest Australian Home Sales Growth of 20.2 per cent, outpacing the resources-driven Western Australia's increase of 16 per cent.The story was different in Queensland where sales fell 9.8 per cent and Victoria, which suffered a 3.7 per cent decline.

Remember to get the best Pound to Australian Dollars rates contact

Friday, July 25, 2008

Big Mac Currency Index

Currencies out of whack, says Big Mac

A McDonald's Big Mac burger is over-valued by 50 per cent in the eurozone when compared to its price in US dollars and under-valued by 49 per cent in China, the Economist magazine says.

The magazine wrote that according to its Big Mac Index, which compares exchange rates that should leave a Big Mac burger costing the same in US dollars everywhere, "many currencies look more out of whack than in July 2007, when we last compared burger prices".

A Big Mac costs on average US Dollars 3.57 in the US.

But in the eurozone a consumer with the US currency in hand would have to change $US5.34 to buy a burger in euros.

For the two currencies to have the same purchasing power at McDonald's, the euro should be worth $US1.06, rather than $US1.57 at present, suggesting that the single currency is over-valued by 50 per cent against the US dollar.

But the Economist found that "the dollar buys a lot of burger'' in Asia, concluding that the Chinese yuan for example is undervalued by 49 per cent against the US dollar.

Elsewhere, the survey found that the Swiss franc is over-valued by 78 per cent against the US dollar, the British pound 28 per cent and the Norwegian krone 121 per cent.

Thursday, July 24, 2008

New Zealand dollar fell dramatically

New Zealand surprised the market with a interest rate cut (25 bp to 8%), which observers had not expected until Sept. According to the FT, the NZ central bank indicated it’s just the start of an easing cycle. The New Zealand dollar fell dramatically, of course, but the more important idea is that if growth is slowing drastically everywhere, maybe other central banks will be cutting instead of hiking. We already think the ECB will stay its hand because of gloomy incoming data. What if the Fed is delaying rate hikes now because of the financial/housing crisis and continues to delay afterwards because of slowing conditions? Slowing conditions reduce inflationary pressure, or so the central banks might think (at least in the absence of commodity-driven inflation).

A separate opinion piece in the FT today suggests that if high-yielders are becoming less high-yield, the carry trade can fade in importance. This suggests the traditional funding currencies, the Swiss franc and Japanese Yen, might be getting reverse flows inward as the risk of holding foreign assets outweighs an ever smaller favorable differential. Well, maybe. We say the risk of holding New Zealand or Australian paper is practically zero. Even if Japan were to start hiking and the high yielders start cutting, the differential will still favor the high yielders for months, if not years. The absolute level counts and not just the change.

Besides, a drop in commodity prices (oil) is a wish and a supposition, not a fact.

Barbara Rockefeller

If you want to Buy New Zealand Dollars call us 0207 183 2790

UK Interest Rates to stay below 5 Percent?

The so-called neutral level of interest rates is now below 5% for the first time in well over a decade, indicating that the Bank of England will be able to leave the base rate lower for longer in the future, a report from a key Treasury adviser has shown.

Neutral interest rates, which for most of the past decade had been thought to lie at around 5-5.5%, are now around 4.5-5%, according to a study by David Miles, a leading City economist frequently touted as a future Monetary Policy Committee member.

Pound to Euros is higher today at 1.2667

New Zealand Cut Rates

The Reserve Bank of New Zealand cut interest rates 25 bps to 8.0%.

Reuters Poll conducted shortly after Tuesday's rate cut showed all 15 economists surveyed expect RBNZ to cut rates again at Sept 11th meeting; with key cash rate down to 7.25 percent by year end.

Pounds to New Zealand Dollars currently 2.6740

Wednesday, July 23, 2008

Bank Of England 7-2 of Interest Rates on Hold

While the US dollar put on gains pretty much across the board, the one stand-out is Pounds sterling, which rose on release of the latest BoE policy meeting. The voting split is the same as the meeting before—a majority of 7 in favor of keeping rates on hold, one voting for a cut and one voting for a hike.

Australian currency market

A volatile day on the Australian currency market, with the release of the Australian CPI generating a mixed reaction in the Australian Dollars.

The immediate Australian Dollars impact is neutral because of the Reserve Bank Australia's earlier comments that it will look through high numbers, due to slowing in the household consumption sector. The US Dollar has not staged a convincing recovery due to the sluggish US economy.

It will be very difficult for the Australian Dollars to fall much in the short-term against a "heavy" US Dollar. In later Asian trade today, the Australian Dollars was dragged lower by a falling New Zealand Dollars. The New Zealand Dollars came under large downward pressure when high-profile New Zealand finance company, Hanover Finance, announced it was freezing new investments and return of deposits.

The immediate and rapid fall in the New Zealand Dollars comes less than 24 hours ahead of the RBNZ meeting. If the RBNZ holds fire tonight and leaves rates unchanged, buying opportunities in Australian Dollars to New Zealand Dollars (AUD/NZD) could open up below 1.2700.

If you need an Australian Mortgage please contact us at

Pounds to Australian Dollars last at 2.0545

Monday, July 21, 2008

Spanish Mortgage Calculator

Hi all,

We have just made a free tools for all our clients with a Spanish Mortgages

visit Spanish Mortgage Calculator

here you can use our Free Spanish Mortgage Calculator to calculate you Spanish Mortgage Repayments

Please let us know if this is useful?

Remember, when the pound moves down, it does it in great leaps and bounds.

The US Dollar also has some support against the pound and Canadian dollar, but is exceptionally weak against the Mexican peso and the Australian dollar.

Bottom line—as is usually the case, it’s a mistake to talk about the US Dollar as a single thing.

While the varying performance against different currencies makes it hard to trade, it’s a healthy development for the dollar. It means not everyone is on one side and also that events in other countries deserve attention and not just the US. We would single out the pound, where we have a slew of hideously negative stories this morning.

Remember, when the pound moves down, it does it in great leaps and bounds.

Friday, July 18, 2008

UBS to Close Down its Swiss Banking Operation in the US

Tidbit: UBS has agreed, apparently under threat of losing its license to operate in the US, to close down its Swiss banking operation in the US, meaning accounts in Switzerland for US residents. The WSJ says this will affect some 20,000 US clients with about $20 billion in assets presumably including those who did pay taxes on interest and other earnings. This is seen as a move against tax cheats but it also a restraint on American freedom to move money abroad, at least with this bank and this country.


Pounds to Swiss Francs last

More at IMSFX Blog

Lehman recommends selling the Australian Dollar!

Bloomberg reports the Lehman Brothers recommends selling the Australian Dollar against the Japanese Yen since Australia may be seeing interest rate cuts next, which will narrow the current 5.6% spread in favor of the Australian Dollar. Besides, commodity prices could fall. Poppycock! We seldom see such nonsense in print. For one thing, the Credit Suisse interest rate swap version of interest rate forecasts indicates the RBA may cut rates by as much as 11 points in the next 12 months. This is up from 2 points on Monday, but still—11 points? The benchmark rate in Australia is 7.5% and the equivalent rate in Japan is 0.5%. There is no case for a significant rise in the yen against the Australian Dollar on this basis, even if Japan were to hike by 25 bp, which we say doesn’t come until next March, if then. And falling commodity prices?

Okay, very likely a correction in Australian export goods but certainly not a reversal.

Reag more at Rockefeller Treasury

Thursday, July 17, 2008

Spanish Property and Spanish Mortgages

My director sent this to me and i thought i would share - just a few comments on the current state of the Spanish Property and Spanish Mortgages and various funding issues.

Spain’s debt-laden households are feeling the pinch of rising interbank interest rates, particularly acute because the overwhelming majority have variable-rate mortgages. But while the UK has barely expanded its housing stock during the past decade, Spain has gone on a construction spree, recently building around 800,000 new homes a year.

Analysts believe that there is only demand for around 500,000 of those, leading to a glut of supply in many areas. However, Spain is viewed as being particularly at risk from a downturn.

Like Britain, property prices have soared, doubling between 2001 and the end of 2006 and rising by nearly 60 percent in the past two years alone, according to Halifax Spain figures.

Wednesday, July 16, 2008

RBA sees the Australian Economy cooling but not facing the same challenges as the US and UK

Reserve Bank of Australia's Stevens: Clear some key parts of demand are slowing. Likely that inflation will go higher before coming down again. Financial conditions are tight and have tightened further in last month. Doesn't expect Australian Economy to face same challenges as US and the UK economies.
The chances of keeping Australia's inflation rate low over the medium term are good as the highest borrowing costs in 12 years cool the economy. ``This outlook does involve a period of significantly slower growth in demand in Australia." "But controlling inflation has always involved being prepared to slow'' the economy.

Australian Dollar to Pounds last at 2.0500

Australian Dollars to US Dollars last at 0.9771

Australian Dollars to Euros last at 0.6135

Australian Dollars to New Zealand Dollars last at 1.2662

Tuesday, July 15, 2008

RBA July minutes - Australian Dollars

RBA July minutes: borrowing costs at a 12-year high is restraining the economy and will slow inflation, suggesting interest rates will be left unchanged this year. Evidence is tightening is working to restrain demand, credit expansion has weakened significantly, some tentative signs of easing in the labour market. The rise in Australia's terms of trade that is currently occurring will work in the opposite direction. It will add substantially to national income and ability to spend, even with the slowing in global growth to below-trend pace that the Australian Banks is assuming. At the same time, rising prices of oil and a range of other commodities are adding to global inflationary risks.

If you need an Australian Mortgage please contact us at

Pounds to Australian Dollars last at 2.0465

Thursday, July 10, 2008

Outlook on the Euro to US Dollar Exchange Rate

Currency Outlook: What Bernanke and Paulson say today to the House Finance Committee will be parsed carefully for clues as to how frightening conditions really are. They will, of course, choose their words carefully. It’s not the right venue for Bernanke to disclose any clues on monetary policy—that comes next week in the semi-annual testimony—but as the Fed seeks new regulatory powers out of necessity, we want to know what the “necessity” looks like. Commentators are pretty sure the Fed is seeking to extend the special auction facilities for investment banks into next year, among other things, which implies such liquidity provision is needed or will be needed. Since Paulson is advising Bernanke on conditions within the market and Paulson has really good inside information, we can’t say Bernanke is the ivory-tower guy who doesn’t really know what’s going on.

Together they are quite a powerful force.

We now have two big reasons not to expect a Fed hike this year—trouble or potential trouble in the financial sector, and the slowdown worsening or at least looking longer-lasting than the usual US slowdown. It doesn’t matter if neither development occurs—it’s enough that the Fed will be staying on hold because they might occur. It looks like inflation as a top priority—as we thought from a Bernanke speech the first week of June—is out the window. From the point of view of the currency market, the Fed staying on indefinite hold is an outright US Dollar-negative.

Trichet may have said the ECB has no bias going forward after its one hike, but that is literally not believable, especially when he complained about second-round effects the very next week. The ECB will almost certainly hike again this year or early next year, widening the differential against the US. We name the section on the benchmark 10-year bond yield “the main event” for the very good reason that the yield spread is the single most reliable forward indicator of the euro to US dollar exchange rate. In the past year it has gotten tangled up in the price of oil, but the price of oil is like gold (and indeed used to be called “black gold”)—cause-and-effect are so intertwined that nobody really knows which causes which.

Other factors that supposedly “determine” exchange rates are taking a distant back seat these days, including the current account. The Fed just released a study showing that the US current account is likely to widen out quite dramatically in the coming years, but it’s no big deal and can be financed quite easily, with no negative effect on the US Dollar. Of course the study assumes oil prices do not get any higher and the dollar doesn’t get much lower, but that’s what economists have to do—hold some conditions constant.

Coincidentally, The Economist published a piece a week or so ago showing the opposite conclusion—that current account deficits do influence exchange rates. Probably the main deduction from these dueling studies is that they are academic; real traders in the real world and real global investors are looking at yield diffs and oil.

We have no idea whether oil will go to $200 before correcting to a decent (survivable) level, like $100, or whether it heads straight for $500. And nobody else knows, either. We continue to believe that restraint on speculation would be a powerful factor, but of course stricter regulation and prohibiting some speculation always faces the risk that the market just moves from the regulated location to the unregulated location (like the UAE/Kuwait).

We imagine Bernanke will be muted and grim today. We also imagine fear will rise to near-panic levels over earnings next week and fresh ratings agency downgrades. This means stocks will fall and when stocks fall, bonds become the safe-haven, depressing yield further. Add a failure-to-correct in oil, and you have a recipe for a falling dollar. Only if Bernanke is upbeat and even hawkish today can we avert this fate.

bye for Now

Barbara Rockefeller

Wednesday, July 9, 2008

Australian Mortgage News from Xinc

Here is a peice that i received from Xinc which we have some dealings with

Reserve Bank of Australia sounding more optimistic

By Jennifer Nielsen, CEO Xinc (Australias Largest Mortgage Broker)

At its meeting on 1st July, the Reserve Board decided to leave the cash rate unchanged at 7.25 per cent. Probably the most important outcome of the meeting was not what was said, but rather how it was said. For the first time this year it seems that the RBA is more convinced we have not only reigned in our spending, but are in fact subdued, “Inflation is likely to remain relatively high in the short term, and the CPI will be further boosted in coming quarters by the recent rises in global oil prices.

Looking further ahead, inflation in both CPI and underlying terms should decline over time, provided demand continues to evolve as expected. On balance, while the inflation outlook remains concerning, the Board’s assessment continues to be that demand growth will be moderate this year.” So, this month’s bet is rates on hold for the foreseeable future. I wouldn’t be betting on a reduction any time soon though.

if you need an Australian Mortgage please contact us at

Tuesday, July 8, 2008

England will keep Interest rates on hold

A shocking 48 of 49 economists in a British Chambers of Commerce survey predict the Bank of England will keep Interest rates on hold at the policy meeting on Thursday, due to the threat of recession so much stronger than inflation and inflation fear. An index based on a survey of 4,758 services companies fell to minus 2, the lowest since 1992, from 17 Another index tracking factories declined to minus 3 from 12, the least since the end of 2001.

Market News reports that something named Communities and Local Government reported UK house prices down by 0.3 percent m/m in May but still up 3.7 percent y/y. This means other surveys are overstating the house price decline. Nationwide and Halifax have a 2.5 percent m/m drop in May and 4.1 percent drop in the year.

The CLG house price index is based on a sample of completed house sales (about 50,000 per month) from about 60 mortgage lenders, providing a comprehensive and reliable assessment of house price developments.

However, the survey may not reflect the sharp falls in house market activity which has occurred since last August because of the drying up of the mortgage market.


Full story at Rockefeller Treasury Services

Pound US Dollar traded a high of 1.9829 and a low of 1.9647

Euros to Pounds traded a high of 0.756 and a low of 0.7901

Pound to Australian dollar traded a high of 2.0705 to 2.0539.

Monday, July 7, 2008

Oil prices are not likely to fall

OPEC chief Chakib Khelil says the world's surging oil prices are not likely to fall. He says strong market demand, especially from China and India, is one reason prices will stay as high as they are. But Khelil told a conference on energy in Algiers on Sunday that the steady increases of late "have nothing to do with supply and demand." Khelil, who serves as Algeria's energy minister, blames the rise on the weak U.S. dollar.

Barbara Rockefeller Joins IMS FX Research Panel

IMS Foreign Exchange is pleased to annouce that Rockefeller Treasury Services will be providing UK and Europe Forex traders with Barbara's famous;

The Rockefeller Strategic Currency Briefing

This report is the industry benchmark in Foreign Currency Technical Analysis and Currency Trading Systems.

Graham Tennant the MD of IMS stated;

It is great to have Barbara providing our clients with such a premium Currency Trading Report as it helps them make informed decisions.

We are looking forward to working together and helping our clients in the fast moving world of foreign currency trading

for more information please go and visit

Rockefeller Currency Trading

Friday, July 4, 2008

Spanish Property prices

Spanish Property prices

Since 1995 Spanish House Prices rose 200% in nominal terms (i.e. before inflation is factored in), and 110% in real terms (after inflation). When the increase is compared to other economic variables, like wages and rents, there is a strong argument that houses have become significantly overvalued… but by how much?

When you compare the ratios of Spanish House Prices to average wages, and house prices to rental costs, their long-run averages suggest houses could be 50% overvalued.

A look at the house prices to household income ratio suggests house prices may be overvalued by 30%.

Capital Economics believes the most important factor has been the fall in nominal and real interest rates since Spain joined the Euro. At present the average mortgage rate is around 5.5%, half its mid-1990s level. The mortgage repayments costs to earnings ratio suggests that house prices are overvalued by less than 20%.

Capital Economics have pencilled in a 12% fall by the end of 2009 and a further 3% in 2010. However they accept that there clearly is a risk that prices could fall by more than their forecast.
The economists believe commercial property is not dramatically overvalued - it would only need fall by 8% for yields to return to their 2001 rates. The economic downturn should only trigger a “fairly modest fall” in commercial property prices over the next few years.

Buy Euros News Today and Last Week

Hi All,

What a week in for those needing to Buy Euros. First the single currency rallied to 1.2660 and than sold off before the ECB' Interest Rate Hike to 4.25 percent. The Currency Today is trading at 1.2635 again and future outlook is suggesting a return of 1.3000.

Here are a few of the Currency News Story's we covered this week

Credit Crunch and Higher Food and Oil Prices set Marks & Spencer shares spiralling as retailer issues profits warning

UK House Prices Slump as First Home Buyers Disappear

Traders Buy Oil and Sell US Shares

Europe raises interest rates to 7-year high

UK house prices Fall Again - Ninth Straight Month

Hopefully we have a little more to cheer about especially in the Spanish Mortgage and Spanish Property Market

HOME loan repayments and rent in Australia are hurting much more than high petrol prices

HOME loan repayments and rent in Australia are hurting much more than high petrol prices, data from Australia's largest privately owned debt collection agency shows.

Unleaded fuel prices were approaching $1.70 in Adelaide, Melbourne, Sydney and Canberra yesterday even before crude oil prices reached a record 145 US Dollars a barrel.

Yet less than 2 per cent of consumers nominated high petrol prices as their primary reason for failing to pay an overdue bill, an email survey of Prushka's 80 debt collectors taken in June found.

Mortgage repayments were the number one reason why 19 per cent of borrowers broke a default arrangement, entered into when a bill was 60 days overdue.

Australian Bank St George hikes Home Loan Rates by and extra 20 points

ST George Bank has lifted its standard variable Home Loan Rate by 20 basis points to 9.67 per cent, independently of the central bank. Australia's fifth largest bank attributed the rise to the continuing high cost of funds it sources for itself.

St George chief financial officer Michael Cameron said all the banks had been absorbing a significant increase in funding costs.

The price of money has risen due to the impact of the US sub-prime lending crisis on global liquidity and wholesale funding markets since August last year. "While we have already completed our wholesale funding requirements for this financial year, the spread between cash rates and 90 day rates in particular remains significantly higher for the industry than a year ago," he said.

St George group executive retail bank Les Matheson said that even after today's rate hike, the lender would not be "fully recovering all of our increased funding costs for this financial year". "St George maintains its commitment that if funding costs were to reduce for a sustained period of time, we would then look to adjust our rates."

The Reserve Bank left official interest rates unchanged at a 12-year high of 7.25 per cent this week.

It had raised rates in February and March, prompting moves by the major banks to match those increases, while adding more hikes of their own. The ANZ's standard variable rate is 9.47 per cent, the Commonwealth Bank of Australia's rate is 9.44 per cent, Westpac's rate is 9.47 per cent and the National Australia Bank's is 9.46 per cent.

St George has also increased a range of special deposit rates by an average of 50 basis points.

Thursday, July 3, 2008

Australian Dollar still doing well aganist the Pound

The Reserve Bank of Australia choose not to hike interest rates this week saying that previous hikes are working only for the next day Retail Sales Data for the month of May showed that Australian continue to spend like crazy and now analyst believe that next month the RBA might not be as kind.

Added to this the Australian Banks have stated they believe that the RBA's forecast for growth may also be off, and that the Australian Economy growth will outperform the rest of the western countries like the UK.

So for the time being there seems no reason to Buy Pounds and actually could be a good time to buy Australian Dollars as it chases parity against the US Dollar and 2 to 1 against the Pound.

Pounds to Australian Dollars last at 2.0660