±Compare Expat Providers

Expat Health Insurance Quotes

Foreign Currency Exchange Quotes

International Moving Quotes

We're very social! Follow Expat Focus on Facebook, Twitter, Pinterest and Google+

Expat Focus Facebook PageExpat Focus on TwitterExpat Focus Pinterest PageExpat Focus Google+ Page

Notify me when new content is added about a country

±Expat Focus Partners

Foreign Exchange Update 12/11/13

News and discussion of currency transfer/foreign exchange issues. Please note: FX providers - other than the official Expat Focus partner - and their agents are NOT permitted to post to this forum.

Reply to topicReply to topic
Forum FAQSearchView unanswered posts
Foreign Exchange Update 12/11/13

Post Posted: Tue Nov 12, 2013 6:41 pm

The following update is provided by the official Expat Focus foreign exchange partner, World First. To request further currency transfer information or a no-obligation quote please click here.

Inflation continues to slow in Europe, UK data due

· GBP lower pre-BOE inflation report tomorrow
· German CPI falls by 0.2% in October as expected
· UK inflation set to fall to 2.5% from 2.7% in September

GBP slipped once again yesterday in the lead-up to tomorrow's Bank of England Inflation Report as more and more investors start to doubt how bullish the Bank of England will be on the UK economy. New growth, inflation and unemployment forecasts are expected and it seems that a positive outcome is not fully priced in with traders now showing a bit of caution.

Those who took part in our Bank of England and ECB webinar on Thursday will have heard us talk about our unease with where markets are starting to price in rate hikes for the UK. Short sterling contracts, bets on what the Bank of England base rate will be at certain points in the future, are currently looking for a 25bps hike in around Q3 of next year. The BOE up until now has been clear about keeping rates low until 2016. Something has to give and this uneasy relationship is the one that holds the key for sterling moving forward.

We will receive the latest news on one of the Bank’s forward guidance ‘knock-outs’ this morning with the publication of the latest CPI data from the UK. Inflation has not been as large a problem as some economists, ourselves included, had originally thought and the news that CPI is slipping closer to 2.0% than 3.0% will come as welcome news to most. The disparity between wages remains clear however, and as a result, we expect inflation to remain under control without Bank of England intervention.

As we said on Friday, the ECB’s decision to cut rates last week will have helped the Bank keep interest rates lower, however. We now have an ECB with a lower “main” rate than the BOE for the first time since 2008. This divergence of monetary policy – a “cutting” ECB and a “hiking” BOE – should engender a higher GBPEUR rate and bring with it a lower CPI rate via lower imported inflation. Lower inflation means less pressure on rates in the short term. That’s our thinking anyway.

CPI is expected at 2.5%, down from 2.7% in September, and is released at 09.30.

Further news from the housing market saw the RICS house price index rise to the highest level in 11 years in October. 57% of chartered surveyors are seeing increasing prices compared to 54% in September with the gap between demand and supply at over a 4½ year high. If supply continues to lag demand by this much, then even a GCSE economics student will be able to tell you what will happen.

Inflation has slipped in Germany once again, increasing chatter about disinflation and eventual deflation in the Eurozone. German CPI slipped by 0.2% with prices rising 1.2% from a year ago. The combination of slowing price increases and disappointing growth numbers due this Thursday are justification enough for the rate cut last week.

Need currency transfer or foreign exchange help?
See how much money you could save with a no-obligation quote...


Forum Legend
Forum Legend
Page 1 of 1

Expat Health Insurance Partners

Bupa Global

Bupa Global is one of the world’s largest international health insurers. We offer direct access to over 1.2m medical providers worldwide, and we settle directly with them so you don’t have to pay up front for your treatment. We provide access to leading specialists without the need to see your family doctor first and ensure that you have the same level of cover wherever you might be, home or away.

Cigna International

Cigna has worked in international health insurance for more than 30 years. Today, Cigna has over 71 million customer relationships around the world. Looking after them is an international workforce of 31,000 people, plus a network of over 1 million hospitals, physicians, clinics and health and wellness specialists worldwide, meaning you have easy access to treatment.