Monday, September 29, 2008

UK House Prices continue to fall as Outlook looks Worse

UK Housing prices have further to fall and the sector continues to contract, according to Bank of England data today. The FT reports that the number of mortgages for new house purchases in August fell to a record low of 32,000 while re-mortgaging activity has also slowed sharply. The number of new house purchases is well below the 49,000 monthly average of the previous six months. The number of remortgages slowed to 64,000 in August, lower than the 69,000 rate in July and well below the six month average of 88,000 per month.

“The rate of growth in lending to the household sector also slowed in August, with a rise of £1.9bn, equal to a one month growth rate of 0.2 per cent. Over the past 12 months, lending to the household sector rose by 7.5 per cent, against a 12 month growth rate of 8.7 per cent in May. Loans to the private non-financial sector also declined. Loans fell by £1.8bn, a growth rate for August of -0.7 per cent. for the 12 months, lending to that sector declined by 2.8 per cent.”

This helped to drag the Pounds to Euros Exchange rate back below 1.2600 and the pound exchange rate outlook is sub 1.2400 just when we thought we were going to test the 1.3000 level.

Bye for Now

Forex Trading Reports

Friday, September 26, 2008

Recession is about to hit Europe and will be long-lasting

Euro Exchange Rate Technical Analysis

The euro may be gaining a bit this morning, but on our charts (that show only one price taken at 5-6 am ET), the US dollar exchange rate corrective move up has resumed. Evidently the perception that the US dollar should be punished because the US started this mess is not the main sentiment. Foreign Exchange Traders are not concerned (so far) about a giant increase in the budget deficit, either, or that the US is headed into a Great Depression. Instead, the perception is back that it will be worse elsewhere, specifically Europe.

This is a version of the FIFO argument.

UBS, for one, recommends the following foreign exchange trade; Sell Euros Buy US dollars, according to Bloomberg, because recession is about to hit Europe and will be long-lasting.

The sell point is 1.4655 with a stop at 1.4890 and a target of $1.4250.

Buy for Now

Barbara Rockefeller - Forex Trading Report

Pounds to Euros at best exchange rates visit

Thursday, September 25, 2008

Technical Analysis - US Treasury Secretary demanding a blank check for $700 billion

Euro Exchange Rate Technical Analysis

The euro exchange rate is resuming the upmove after only a two-day dip. Normally we expect three days (or more) and indicators were supporting the idea of a bigger dip-but fundamentals trumped the chart. In this instance, the market was expecting Congress to fold faster and not put up such a fuss over a little thing like the US Treasury Secretary demanding a blank check for $700 billion with no oversight and no legal recourse. Congress balked and became the “fundamental." The sentiment persists, however, that once the deal gets done, we should get a relief rally in the equity markets and in the US dollar.

We have seldom seen sentiment in such a delicate state and so sensitive to political nuance.

It’s not going too far to say that the Bush speech, and Bush inviting the presidential candidates to a summit meeting today, was an injection of politics that the market didn’t like. We can’t recall an occasion in the past when something this tangential had such a decisive effect.

Buy for Now

Barbara Rockefeller - Forex Trading Report

Pounds to Euros at best exchange rates visit

Wednesday, September 24, 2008

Pound rallies against the US Dollar but still the whipping boy of the Euro

Hi All,

foreign exchange traders contiune to buy pounds against the US Dollar, Australian Dollar, South African Rand and New Zealand dollar but cant seam to beat the Euro with the Euros to Pound exchange rate stuck in the 0.7900 to 0.8000 zone.

Even the fact that the French EDF have announce their intention to buy British Energy for 12 billion pounds hasnt pushed the euro pounds exchange rate lower. So what is needed? Probably best not to remind anyone of high street bank mergers/failures at this point or housing sales being the lowest on record.

Personally i cant see why the euros to pound exchange rate cant breach the 0.7700 level which is still well above the 0.6580 low of last year. All i can suggest to those of you with a Spanish Mortgage is buckle up 0.8200+ cant be far away as foreign exchange traders live by the motto
if you cant sell it, you might as well buy it and if the Euro to US dollar exchange rate heads back above 1.5000 i cant see it dragging the pound with it.

Exchange rates never do what you want them to do but remeber you never go broke selling pounds

Bye For Now

IMS foreign Exchange

Buying Euros, Buying Australian Dollars visit for a free currency quote

Tuesday, September 16, 2008

HBOS Share Price falls further as UK Inflation rockets

The British CPI was reported up to 4.7% in Aug from 4.4% in July, led by energy costs, the highest in 16 years. The BoE is required to write a letter to the Treasury when inflation exceeds its 2% target by more than 1% (you can read the letter at the website). This is the second letter Mr. King has had to write (they are due quarterly for as long as the discrepancy lasts). This time, of course, the BoE blames food, gas and crude oil prices. According to the FT, King says the BoE now thinks inflation will peak and soon at about 5% but is sticking to the scenario of sharply falling inflation in 2009.

“The governor again argued that the Committee was trying to strike a balance between the concern that people might get used to high inflation, so it would become embedded in the economy, and the worry that the economic picture was so bad that inflation would drop well below target in the medium term.” A period of “muted” growth is necessary to damp price pressure and kill of inflation expectations having their usual self-fulfilling effect. Market News reports that the market saw the letter (and CoE Darling’s comments about it) as “dovish.”

Overall the Pounds to Euros exchange rate has fallen a little on the news and is trading 1.2560 in afternoon currency trading. The Outlook for the pounds to Euros exchange rate is that it may re-test the lows as the UK continues to provide more bad news and especially if HBOS share price continues to come under fire due to the credit crisis.

Bye For Now

Barbara Rockefeller

Thursday, September 11, 2008

ANZ will drop its fixed interest mortgage rates for new customers

What can only be seen as good news for those people that are Migrating to Australia ANZ will drop its fixed interest mortgage rates for new customers by up to 0.2 percentage points from Monday. "In light of market conditions continuing to ease over the past couple of weeks, ANZ will lower fixed rate mortgages for new customers from Monday, 15 September,'' a spokeswoman said.

Fixed interest home and residential investment loan rates will decline across all terms by between 0.1 per cent and 0.2 per cent, the bank said. Its one-year fixed mortgage rate will fall to 8.39 per cent, from 8.49 per cent.

This is the bank's third cut to its fixed rate mortgages since August 8, with interest rates falling by up to 1 per cent over the past five weeks, the bank said. Five weeks ago the one-year rate stood at 9.1 per cent. Fixed rates for Australian home loan and residential investment loan across all other terms will be reduced by 0.2 percentage points rom Monday.

ANZ's five year fixed rate mortgage is the most popular, the spokeswoman said. Interest rates applying to ANZ's credit cards are still under review, the spokeswoman said. ANZ's move follows comments made by Reserve Bank of Australia Governor Glenn Stevens on Monday relating to the decoupling of movements in mortgage interest rates from movements in the official cash rate.

"There isn't any law that says banks can only adjust interest rates when we (the RBA) do,'' he told a House of Representatives Economics Committee hearing in Melbourne.

Australia's five biggest banks have cut their fixed rate home loans over the past six weeks, with the most recent being St George Bank on September 1. Rates for one-year fixed home loans today stand at 8.49 per cent at ANZ, NAB and Westpac, 8.79 per cent at St George and 9.03 per cent at Commonwealth Bank.

Full story visit

Best Exchange Rates when you need to Buy Australian Dollars visit IMS Foreign Exchange

Monday, September 8, 2008

Bank of England to consider rate cuts

Pound Sterling is not only the plaything of the euro and yen , but trades against the dollar on its own factors. This time it’s a favorable PPI report that shows inflation going down and thus allowing the Bank of England to consider rate cuts, perhaps before year-end. Some reports (Bloomberg) say the pound has fallen the most since 1992, when it left the ERM and Soros made a fortune, and to the lowest level since April ’06, but in fact it has not fallen under the low from last Thursday at 1.7533 on this latest move, and the low in April ’06 was 1.7066. To repeat the old refrain, we need a lower low to prove a trend is not going to correct. This is not to say the pound is not still mightily overvalued and will not drop to that old level or beyond, but it is to say be careful what you read. We may think the Bank of England could or should cut rates but we have no evidence yet that it will bite the bullet. Pound Sterling has fallen a massive 2619 points from 2.0157 the week of July 18 to 1.7538 last week.

We normally don’t expect a straight-line drop this big, and need to worry about a corrective bounce. The problem is figuring out what news would trigger such a bounce…

Bye for Now

Barbara Rockefeller

for the Best Euros to Pounds exchange rates contact IMS Foreign Exchange

The ECB Rate Decision

The ECB Rate Decision: Trichet said the ECB has no bias for a cut or a hike, hard as that is to swallow. He also indicated growth this year will be only about 1.4%, from the earlier forecast of 1.8%, and next year, as low as 0.6% to 1.8% (from forecasts only in June of 1-2%). As expected, the debate over whether the ECB could or should cut rates to boost growth remains alive and kicking. The FT says the market still thinks cuts are more likely, with the yield on the Bund (and the UK Gilt) lower on Thursday at both the two-year and 10-year maturities. We say there’s one factor nobody is inserting into the story—that the US Fed rate cuts were inspired in large part by financial market turmoil, and even if the ECB could say inflation is falling and thus a cut is okay, it wouldn’t want to appear to be rescuing banks (even if that was exactly what it was doing with lax collateral rules up to now). Besides, falling currencies imply rising inflation via import prices as well as being equivalent in some small degree to rate cuts.

Bye For Now

Barbara Rockefeller

Best Exchange Rates - Visit IMS Foreign Exchange

Wednesday, September 3, 2008

Pound falls lower and Hits a record low against the Euro

Sterling's slump deepens as recession looms
By Edmund Conway, Economics Editor

Labour's sterling crisis is intensifying with the pound slumping to a new 16-year low.
The fall was triggered by an OECD warning that Britain is already in recession and the Government's pledge to spend £600m bailing out the housing market.

The pound, which has been tumbling in the past month, dropped to a new record low against the euro and hit a 2½-year low against the US dollar as foreign exchange traders continued to sell out of their sterling investments.

In early morning trading today it almost fell to $1.77 and the pounds to euros exchange rate was at 81.42p. The declines took sterling to 88.5 against a basket of other currencies - the worst overall level since the aftermath of Black Wednesday in 1992.

The falls came after the Organisation for Economic Co-operation and Development warned yesterday that Britain is in the first throes of recession. The Paris-based OECD became the first major forecaster to declare explicitly that Britain is in a technical recession - where the economy contracts for two consecutive quarters.

To make matters even more uncomfortable for Gordon Brown, it said Britain is the only major economy facing recession in the next six months. The Prime Minister had claimed previously that the UK was well placed to withstand the downturn.
The OECD said the economy will shrink by 0.2pc by the end of the year - the worst performance since the recession of the early 1990s.

Full story visit The Telegraph

Bye for now

IMS Foreign Exchange - For the Best Exchange Rate visit

Tuesday, September 2, 2008

exemption of stamp tax on home purchases houses selling for less than £175,000

Yesterday Chancellor of the Exchequer Darling told the press that the slowdown in the UK is the worst in 60 years. Market News reports that “The Times speculates that UK Chancellor Alistair Darling… may be removed from office in an imminent cabinet reshuffle.” We assume the bookies are taking bets.

The government announced a £1 billion stimulus package that includes exemption of stamp tax on home purchases houses selling for less than £175,000 (from £125,000). The FT reports that it’s a feeble initiative, with only about 15,000 property transactions in May between £125,000 and £175,000, which would now be exempt from the tax. Other measures include allowing housing associations to buy homes from those facing repossession and rent them back. “Housing associations could also offer shared ownership deals where they take ownership of part of the home – reducing the occupiers’ mortgage repayments.”

“Separately, ministers announced is a new shared equity scheme called “HomeBuy Direct” where buyers can borrow up to 30 per cent of the value of a new-build home-co-funded jointly by the government and developer. The loan will be interest-free for five years.” The PM may also roll out a plan to help homeowners with energy costs.

Yesterday, mortgage approvals dropped to the lowest level in nine years. The number of UK mortgages approved in July hit a new record low, 33,000 in July from 35,000 in June, for the 12th consecutive monthly decline. Hometrack reported August house prices down 0.9 m/m and 5.3% y/y for the 11th months and the longest serie since data was started in 2001. Nationwide had a bigger number last week.

Monday, September 1, 2008

House prices fell for the eleventh month in a row

House prices fall as buyers scent bargains

House prices fell for the eleventh month in a row in August, in the latest sign that the housing slump is deepening. Average prices dropped by 0.9pc over the month, following a 1.2pc slump in July, according to Hometrack. Its measure of house price inflation dipped to 5.3pc year-on-year, the lowest level since the survey began. However, buyer interest is growing on the back of lower prices and reductions in the cost of mortgages, according to Hometrack director of research Richard Donnell.

This trend could well become more evident over the autumn as we continue to move towards more realistic levels of pricing, he said.

The average discount on asking prices across England and Wales was 9.3pc during the month, an increase on spring 2007, when buyers were paying an average of 95.7pc of the asking price. However, although buyers are able to achieve significant discounts, it remains extremely difficult for many to secure financing, particularly first-time buyers.

For the full story visit The Telegraph

As the funding is the issue here we at IMS Foreign Exchange believe there is still another 10% for property prices to fall in the UK and abroad. Hold on to you hats the rides about to get a little bumpy

Bye For Now