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Hi All,

Here’s an update on what’s been happening with the Euro over the last week.

Sterling made gains against the Euro up until Thursday of last week as the Bank of England’s new found optimism in the effectiveness of their asset buying programme and the signs of economic recovery spread to the currency markets. Mervyn King was first out of the blocks telling a meeting in Scotland on Tuesday night that the UK economy would show positive growth in the second half of 2009. On Wednesday King’s previous suggestion that the QE programme should be extended was conspicuously absent from this month’s MPC meeting minutes. In fact it was replaced with a comment from the committee that QE was having a substantial impact upon asset prices, as planned, endorsing Paul Fisher’s comments a week earlier.

GBP/EUR climbed steadily to post 1.11 as markets awaited confirmation on Friday that the UK economy had emerged from recession……..The shock disclosure that we were in fact enduring the longest post war recession, at 6 consecutive quarters, after a contraction of 0.4% in Q3, dumbfounded every economist polled ahead of the figures and clearly the Bank of England’s own forecasts. It prompted several economists to suggest that there were serious errors in the figures and that upward revisions would eventually declare a belated end to the downturn in Q3. On this news Sterling fell immediately two and a half cents to 1.0850.

GBP/EUR movement – High’s & Low’s of last week (19/10/09 - 23/10/09)

High’s: 1.1115
Low’s: 1.0849

A movement of: 2.45%

Difference on £200k

High: €222,300
Low: €216,980

Difference of: €5,320

Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.

A further update will be added next week.

Regards
 
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