In the UK we had bad news for the Steel industry as Tata Steel announced that they were going to cut over 1000 jobs. This is amid falling steel and commodity prices, however, this will most likely not have an effect on the wider economy, as unemployment is low.

China’s economy grew at its slowest rate in a quarter of a century in 2015, increasing pressure on Beijing to address fears of a prolonged slowdown and ease the jitters affecting global markets. Full-year growth of 6.9% was only just short of government expectations of 7% but by contrast, growth in 2014 stood at 7.3%

US oil prices fell below $27 for the first time since 2003 after the International Energy Agency warned on Tuesday that the oil market could drown in oversupply.

Interest rates in the Eurozone yesterday were left unchanged with the interest rate at 0.05% and the overnight deposit rate again left unchanged at -0.3%. Mario Draghi said rates would stay at present or lower levels for an extended period and there would be no limits to action to reflate the Eurozone.

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Here are the exchange rates taken at 12:41 today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.4325
GBP/EUR 1.3243
USD/EUR 0.9245

Monday was a light day in terms of data being released for the pound, however, the FTSE suffered further losses posting its worst first week of the year since 2000. This was partly due to weak data out of China causing copper prices to fall, having an effect on mining firms listed on the FTSE.

The pound tumbled to a five and a half year low against the dollar on Tuesday. This was due to UK industrial production slipping 0.7% in November, the biggest slide in 3 years, mainly due to low domestic demand for electricity and gas.

On Thursday, the Bank of England’s rate-setting committee held interest rates at historic lows, while it cut forecasts for economic growth and inflation. The monetary policy committee (MPC) voted 8-1 in favour of keeping the benchmark interest rate at 0.5%, with lone hawk Ian McCafferty staying in favour of a rate rise despite concerns over the global economy

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Here are the exchange rates taken at 12:41 today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.4332
GBP/EUR 1.3134
USD/EUR 0.9164

Welcome to the first weekly market round up of 2016! We hope you all had a relaxing and enjoyable Christmas and New Year.

World stocks fell again on Tuesday after their worst first-day performance in many years, extending losses as relief at intervention by China to steady its markets quickly evaporated in the face of mounting concerns about the global economy. Despite a cash injection of around $20 billion the Chinese yuan fell to a new 4.5 year low in offshore trade.

The recent turmoil in the Chinese stock markets has again strengthened the Dollar against a host of its major counterparts. With David Cameron threatening a “Brexit” from the Eurozone we are also seeing the Pound come under some selling pressure as this debate unfolds.

The GBP/USD rate is currently at its lowest level since April 2015, we haven’t been below this range since 2010 when the rate fell below 1.43.

Growth across the UK’s service sector dipped last month, suggesting the British economy isn’t growing as fast as hoped. Markit’s UK Services PMI dropped to 55.5 in December, from 55.9 in November. This still shows robust expansion with firms taking on more business but the Markit report said growth in recent months has been slower than in the first half of 2015.

Oil prices fell below $35 per barrel for the first time since 2004 on Wednesday, tumbling more than 5% as the row between Saudi Arabia and Iran made any cooperation between major exporters on cutting output even more unlikely. The international furor over Saudi Arabia’s execution of a Shi’ite cleric ended speculation that OPEC members might agree to production cuts to lift prices.

Adding to this oversupply, Iranian oil exports are widely expected to increase in 2016 as Western sanctions against Tehran are lifted.

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Here are the exchange rates taken at 12:55 today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.4583
GBP/EUR 1.3418
USD/EUR 0.9201

The UK’s inflation rate edged back above 0 in November for the first time in four months, a move that still leaves the rate a long way from the Bank of England’s target of 2%. Prices went up an annual 0.1% in November after falling 0.1% in October, said the Office for National Statistics. Core inflation, which excludes volatile food and energy prices, accelerated to 1.2% from 1.1%

The Pound was boosted on Thursday morning when UK retail sales rose by more than expected in November, as shops offered promotions at the end of the month in the run up to Black Friday. Sales volumes increased by 1.7% in November from the month before, the Office for National Statistics said.

Industrial production in the Eurozone rebounded in October after two months of decline, according to new figures released on Tuesday morning.
On the year, industrial production across the currency bloc was up 1.9% against a 1.3% consensus. Output from Eurozone factories, quarries and mines, jumped 0.6% in October compared with -0.3% the previous month.

We saw the US Federal Reserve raise interest rates by 0.25 percentage points, its first increase since 2006. The US central bank also raised its projection for economic growth next year from 2.3% to 2.4%, which suggests the bank does not think the rate increase will damage growth. The rate rise vote was unanimous and the bank cited as the reasons for its action increased household spending and investment by business, along with a continued low rate of inflation.

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Here are the exchange rates taken at 12:32 today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.4921
GBP/EUR 1.3777
USD/EUR 0.9234

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Lastly, we’d like to wish everyone a Merry Christmas and a Happy New Year! Thank you to all our customers, suppliers and everyone that has been on our journey with us this year. Here’s to 2016!

The Euro had a quiet start to the week; in stark contrast to the rally it had last week after Mario Draghi’s announcement about his soft extension to quantitive easing (QE), which saw one of the largest Euro advances against the USD in 5 years.

The macroeconomic calendar was light, with Germany releasing its Industrial Production data for October, up by 0.2% compared to a month before, but flat on the year.

UK manufacturing disappointed markets with a reported -0.4% decrease in November from a forecasted -0.1%. Also, industrial output rose 0.1% as expected but year/year it rose 1.7%, which was above expectations.

The UK was expected to report no change in month on month industrial output and manufacturing production. The manufacturing sector is not the strongest in the UK, as seen by consistently low PMIs.

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Here are the exchange rates taken at 12:44 today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.5159
GBP/EUR 1.3823
USD/EUR 0.9119

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UK consumer credit continued to grow in October at rates not seen since 2006, while mortgage approvals edged higher after a dip in the previous month, Bank of England data showed. Lending to consumers rose by £1.2billion last month, up 8.2% compared with October last year, prompting some concerns about people’s reliance on personal loans, overdrafts and credit cards in order to make ends meet.

US manufacturing unexpectedly contracted in November at the fastest pace since the last recession as elevated inventories led to cutbacks in orders and production. The Institute for Supply Management’s index dropped to 48.6, the lowest level since June 2009, from 50.1 in October.

The annual rate of inflation in the Eurozone rose just 0.1% in November; this was below the forecast reading of 0.2% and was unchanged from the previous month. The Euro immediately fell to a low for the day after the reading was published, and was down 0.4% against the dollar, near a eight-month low.

New measures announced by European Central Bank President Mario Draghi to support the region’s economy fell short of analysts’ expectations. GBP/EUR dropped more than 3 cents, the euro’s biggest surge since March, as the market expressed its disappointment with the ECB’s latest easing measures. The ECB cut its deposit rate by the minimum 0.1% most traders had expected, to -0.3%, and extended its asset purchase programme, but did not increase the amount of government bonds it buys each month.

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Here are the exchange rates taken at 16:30 today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.5106
GBP/EUR 1.3878
USD/EUR 0.9187

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Bank of England governor Mark Carney said that the UK interest rates are likely to remain low “for some time”. UK rates have been held at 0.5% since March 2009. Most economists are not expecting the Bank to raise rates until mid-2016 at the earliest.

Also, according to another poll on Wednesday, it is anticipated The Bank of England will raise interest rates in the second quarter of next year but the timing may rest on whether the US Federal Reserve tightens policy in the world’s largest economy next month.

George Osborne’s Autumn Statement stated that they expect the UK economy to grow by 2.5% in 2016 and 2.4% in 2017, revised up from 2.3% and 2.4% respectively. Unemployment is set to fall next year and stay there until 2017 when it is set to rise. He is also made a U-turn on controversial and unpopular tax credit cuts.

Sterling fell back towards a seven-month low against the dollar on Thursday, with upbeat UK forecasts and a spending review by the Chancellor the previous day not changing the view that interest rates will not rise any time soon. The pound had initially climbed on Wednesday after George Osborne’s Autumn Statement, in which he eased some spending cuts and dropped an unpopular plan to scrap some benefits for low-earners, as well as announcing a higher growth forecast of 2.4% for 2016.

US economic growth for the third quarter has been revised up, helped by stronger investment and house building. GDP rose at an annual pace of 2.1%, not the 1.5% rate it reported last month. Even with the GDP revision, growth still slowed from an annual pace of 3.9% in the second quarter.

German business confidence unexpectedly rose in a sign that Europe’s largest economy is robust enough to weather risks including a global slowdown and Volkswagen’s emissions scandal. The IFO institute’s business climate index climbed to 109 in November, the highest level since June 2014, from 108.2 in October.

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Here are the exchange rates taken at 12.14pm today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.5045
GBP/EUR 1.4217
USD/EUR 0.9450

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House prices in the UK went down in November, the latest house price data from property website Rightmove showed on Monday. The house price index fell 1.3% month-over-month in November, which was the smallest drop since 2011. In contrast, prices grew 0.6% in October.

The UK’s inflation rate remained -0.1% in October which will further dampen expectations of a rise in interest rates any time soon. The ONS added that the Retail Prices Index, a separate measure that includes housing costs, fell to 0.7% in October from 0.8% in September. This is the lowest RPI rate since November 2009.

Greece has secured a tentative deal with the Eurozone to unlock the latest tranche of financial aid. The two sides have agreed a batch of reforms that will be presented to the Greek Parliament on Thursday. The Eurozone countries insisted on the measures before releasing €2bn (£1.4bn) in loans and up to €10bn in support for the banks.

US data was broadly positive yesterday, lending further support to a Fed rate increase at the 15-16th December meeting. Whilst continuing jobless claims came out slightly worse than October’s (2.175m vs October’s 2.174m), initial jobless claims were better than October’s (271k vs 276k).

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Here are the exchange rates taken at 12pm today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.

GBP/USD 1.5244
GBP/EUR 1.4266
EUR/USD 1.0680
USD/EUR 0.9360

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On Monday we learned Germany’s trade surplus in September was lower than expected, as surging imports outstripped exports, a sign that the weakness in emerging markets is forcing the economy away from its long-time reliance on exports. The trade surplus narrowed to EUR 19.4 billion in September from a revised EUR 19.7 billion in August, the Federal Statistical Office said.

On Tuesday David Cameron said it is a matter of “cardinal importance” that there is recognition that the EU is a union “with more than one currency”, and those countries such as Britain that choose not to use the single currency do not bear any costs of supporting the euro.

Britain’s unemployment rate fell to its lowest level since early 2008 but earnings grew more slowly than expected, showing why the Bank of England is in no hurry to raise interest rates. Britain’s unemployment rate dipped to 5.3% in the third quarter, its lowest level since the three months to April 2008, before the financial crisis crippled the economy.

In a choppy day’s trading, the US dollar fell moderately against GBP on Thursday afternoon, as investors booked profits on recent gains and US initial and continuing jobless claims came out weaker than expected. The longer-term view on the greenback remains bullish, however, with all eyes on central bank decision making this December.

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