Monday, February 17, 2014

Exchange Rates Outlook: Pound Sterling To Euro, US Dollar, Australian Dollar, Lira, Rand & New Zealand Dollar

Pound Sterling (currency:GBP) performed well on Friday versus the Euro (GBP/EUR) and the US Dollar (GBP/USD) pushing back up to resistance levels seen in recent weeks. The US Dollar (currency:USD) performed poorly mainly due to data prints published after midday which showed a potential slowdown in economic growth. Factory production was seen to drop in January – with many analysts pointing the finger at the poor winter weather disrupting production. 

Yesterday's exchange rates saw the Pound Australian Dollar exchange rate close at 1.85430 GBP/AUD, Pound Canadian Dollar exchange rate close at 1.82859 GBP/CAD, Pound Swiss Franc exchange rate close at 1.48831 GBP/CHF, Pound Euro exchange rate close at 1.21774 GBP/EUR, Pound New Zealand Dollar exchange rate close at 1.99603 GBP/NZD, Pound Turkish Lira exchange rate close at 3.63857 GBP/TRY, Pound US Dollar exchange rate close at 1.66568 GBP/USD, and the Pound South African Rand exchange rate close at 18.29786 GBP/ZAR. 

Pound Sterling was boosted by a strong construction output data release from the Office of National Statistics (ONS) showing a pick up in industry and providing evidence that the economic recovery is picking up. Construction Output increased by 2% in Q4 2013 from Q3 underlining strengthening demand and confidence in the economy. 

The Australian Dollar to US Dollar exchange rate (AUD/USD) picked up as data from China gave cause for optimism. A National Bureau of Statistics figure from the People’s Republic showed annual inflation (CPI) of 2.5%, leading to sentiment that economic production might also follow suit – leading to more exports from Australia of its raw material outputs to China. 

Asian currencies performed well during the full trading week, with the Federal Reserve tapering cuts less stringently than previously thought. 

Key Pound Sterling Exchange Rates As of: 20:30 GMT 14/02/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.04% at 1.85359 GBP/AUD. 

The Pound Sterling to Canadian Dollar exchange rate is trading up +0.56% at 1.83886 GBP/CAD. 

The Pound Sterling to Swiss Franc exchange rate is trading up +0.33% at 1.49326 GBP/CHF. 

The Pound Sterling to Euro exchange rate is trading up +0.38% at 1.22239 GBP/EUR. 

The Pound Sterling to New Zealand Dollar exchange rate is trading up +0.26% at 2.00112 GBP/NZD. 

The Pound Sterling to Turkish Lira exchange rate is trading up +0.39% at 3.65263 GBP/TRY. 

The Pound Sterling to US Dollar exchange rate is trading up +0.52% at 1.67442 GBP/USD. 

The Pound Sterling to South African Rand exchange rate is trading down -0.77% at 18.15775 GBP/ZAR. 

Money Transfer Rates: Best Pound Dollar Exchange Rate In 5 Years; Best Pound Euro In 12 Months

The Pound Sterling (currency:GBP) continued to make strong gains against the majors on Friday, with the Pound Dolllar exchange rate rising through 1.68 GBP/USD, while the Pound Euro exchange rate also moved towards a 12 month high GBP/EUR. The trade weighted index pushed to the highest level in five years. There was further speculation that distribution of Vodafone payments surrounding the Verizon purchase was boosting the UK currency with the Pound rising against all of the 16 most actively traded currencies. The latest unemployment data and Bank of England minutes will be watched very closely this week, as markets look for further evidence on economic trends and any potential divisions on forward guidance within the MPC. The Governor Mark Carney maintained his commitment to no short-term policy easing, but underlying Sterling sentiment remained strong and there was a sharp monthly increase in the Rightmove index, which boosted sentiment towards the housing market with the Pound spiking towards 1.68 against the Dollar and to the highest level since 2009. 

The Euro-zone growth data for the fourth quarter was marginally stronger-than-expected with a 0.3% GDP gain for the fourth quarter, from 0.1% previously with stronger-than-expected readings for France and Germany. There was a 0.1% gain in Italy, the first expansion since the first quarter of 2011, which provided some marginal relief. Following the stronger-than-expected data and reduced speculation over March ECB action, there was reduced speculation that the ECB would look to sanction an easing of monetary policy at March’s council meeting, which helped to underpin the Euro. The Italian Prime Minister tendered his resignation to the President on Friday, effectively pushed out by party rival Renzi, who has now been asked to form a government. 

Data Released 17th February 2014

U.S Presidents’ Day Market Holiday 

To see live, historical exchange rates and charts or to get the best rates on your money transfer please refer to the main Exchange Rates UK website. 

Important Pound Sterling to Euro & US Dollar Exchange Rates (Updated17:00 GMT 17/02/2014)

The Pound Sterling to Euro exchange rate is trading down -0.41% at 1.21828 GBP/EUR. 

The Pound Sterling to US Dollar exchange rate is trading down -0.38% at 1.67000 GBP/USD. 

The Euro to Pound Sterling exchange rate is trading up +0.41% at 0.82083 EUR/GBP. 

The Euro to US Dollar exchange rate is trading up +0.03% at 1.37078 EUR/USD. 

The US Dollar to Euro exchange rate is trading down -0.03% at 0.72951 USD/EUR. 

The US Dollar to Pound Sterling exchange rate is trading up +0.38% at 0.59880 USD/GBP. 

Exchange Rates Outlook: Pound Sterling Down V Euro, US Dollar, Australian Dollar, Rand, Lira & New Zealand Dollar

Pound Sterling (currency:GBP) suffered during Monday’s trading; however a lack of data from central banking institutions prevented any heavy falls in value, a US bank holiday meant a relatively quiet day in the currency markets. Rather, Sterling price movement has been determined mainly by profit taking as the Pound has approached record levels versus most of its currency pairs in recent days. 

Yesterday's exchange rates saw the Pound Australian Dollar exchange rate close at 1.85068 GBP/AUD, Pound Canadian Dollar exchange rate close at 1.83968 GBP/CAD, Pound Swiss Franc exchange rate close at 1.49440 GBP/CHF, Pound Euro exchange rate close at 1.22326 GBP/EUR, Pound New Zealand Dollar exchange rate close at 2.00101 GBP/NZD, Pound Turkish Lira exchange rate close at 3.65614 GBP/TRY, Pound US Dollar exchange rate close at 1.67635 GBP/USD, and the Pound South African Rand exchange rate close at 18.20746 GBP/ZAR. 

Despite the US bank holiday certain events conspired to influence global economic outlook during the days’ trading. The Chinese central bank, the People’s Bank of China has shown that lending increased strongly in recent months. Aggregate credit has reached 2.58 trillion Yuan in the People’s Republic signalling increasing confidence in the economy and its future prospects. Analysts have pointed to the gently improving picture in the US as being a key factor, with knock on effects being felt in China and also a number of China dependent countries. China is the largest export market for Australia and New Zealand and hence the Aussie Dollar (currency:AUD) and New Zealand Dollar (currecny:NZD) have benefitted in recent weeks as positive data from China improves their outlook. 

Whilst Sterling has suffered today, it is in part due to profit taking on Long Sterling trades (traders who expect the price of Sterling to increase). Long Sterling traders are providing support level since if the Pound drops below a certain value those traders consider it attractively priced and whose resultant purchases of the currency then result in the price increasing again. Additionally support is being seen as a result of the Verizon/Vodafone merger and acquisition talk which could see huge inflows in the GBP in the near future. 

Top 10 Pound Sterling Exchange Rates (As of: 17:30 GMT 17/02/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.12% at 1.84842 GBP/AUD. 

The Pound Sterling to Canadian Dollar exchange rate is trading down -0.49% at 1.83058 GBP/CAD. 

The Pound Sterling to Swiss Franc exchange rate is trading down -0.31% at 1.48981 GBP/CHF. 

The Pound Sterling to Euro exchange rate is trading down -0.35% at 1.21896 GBP/EUR. 

The Pound Sterling to Mexican Peso exchange rate is trading down -0.63% at 22.03186 GBP/MXN. 

The Pound Sterling to Norwegian Krone exchange rate is trading down -0.27% at 10.15397 GBP/NOK. 

The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.22% at 1.99661 GBP/NZD. 

The Pound Sterling to Turkish Lira exchange rate is trading down -0.6% at 3.63420 GBP/TRY. 

The Pound Sterling to US Dollar exchange rate is trading down -0.35% at 1.67055 GBP/USD. 

The Pound Sterling to South African Rand exchange rate is trading down -0.7% at 18.07970 GBP/ZAR.
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Rising demand for oil and gas brighten Alberta prospects in 2014 and 2015

A year ago, in the Economic Snapshot titled “Alberta has enough oil for now but too much without Keystone”, we expressed concern that failure to approve the pipeline would exert a drag on the province’s economy in 2013 and possibly in 2014.
However, a number of indicators suggest that this concern does not appear to have been well founded. First, despite the absence of the Obama-stalled Keystone Pipeline, Alberta’s total exports were up by 6.4% in 2013 compared to a 4.4% rise in 2012.
By far the major contributor to this strength was an 8.1% year-over-year increase in exports of crude petroleum. In addition, sales of natural gas — driven to a significant extent by the much colder than normal weather that has held much of the continent in its grip since mid-November — were up by 20%.
Turning to the domestic side of the economy, fuelled by strong growth of employment, low interest rates and rising consumer confidence, retail sales in the first eleven months of 2013 were up 6.6%, three times faster than the increase recorded by the rest of the country.
Driven by the same strong fundamentals as consumer spending, together with a record inflow of migrants from outside the province, sales of existing homes increased by 10% in 2013 following a gain of 12.3% in 2012.
The facts that the months-of-supply of homes for sale in the province averaged 3.9 in 2013, the lowest annual average since 2007, and average house prices in the province increased by 7.5% year-over-year in December, point to a shortage of existing homes for sale and suggest that the pace of new construction will gain momentum over the course of 2014 and into 2015. The outlook for the other key element of domestic demand, business investment, is also looking brighter than it did just a year ago.
This prospect is reinforced by the recent release by the U.S. State Department of a report which raised no major objections to the proposed Keystone Pipeline.
In addition, the most recent Inventory of Major Alberta Projects reported that despite the persisting uncertainty regarding approval for several pipelines including Keystone, the value of proposed oil and gas projects in the province has increased by 52% over the past six months.
Driven by the recent strength of both external and domestic demand, it is not surprising that hiring in the province has expanded at a healthy pace over the past year.
Indeed over the past twelve months the province has added more than twice as many (48,000) full-time jobs as the country as a whole (19,200) and has an unemployment rate of 4.8%, well below the national average of 7.2%.
Although the most recent CFIB Business Barometer reported a decline in intentions to add staff over the next three months, it noted that “short term hiring plans remain quite strong”.
Looking ahead, given the steady, gradual improvement in the health of the global economy in general and the U.S. economy in particular we expect that the Alberta economy will expand in the range of 3.5% to 4.5% into 2015 following an estimated increase of 3.4% in 2013.
Gross Domestic Product (GDP) Growth – Alberta vs Canada
Gross Domestic Product (GDP) Growth – Alberta vs Canada


Six U.S. Sub-sector Job Markets with Lessons for Canada

Sometime this summer, U.S. total employment will finally return to its pre-recession peak level of January 2008. The shortfall is currently 870,000 jobs. Private service-sector employment has already far surpassed its prior record and many sub-sectors are also doing quite well.
There are six job sub-sectors that I particularly like to keep an eye on, since they capture broader trends in the economy and they provide insight into how Canada is doing, relatively speaking.  
U.S. auto sector demand has picked up and domestic assembly and parts plants, as reflected in staffing levels, have been sharing in the improvement. Several forms of restructuring have helped U.S. automakers raise profitability. Union labor agreements have reduced the cost of new hires. Production shifts to lower-cost states and those with “right to work” legislation have also trimmed costs. Pension and health care expenses have been moved to separate trust companies.
In Canada, Chrysler is seeking government help to augment new major investment in Windsor. Ontario’s opposition Conservative Party, gearing up for the next provincial election, is proposing worker-rights measures similar to what have been adopted in many neighboring U.S. states.
Parents tell their children, “If you grow up and become a lawyer, your future is assured.” Not if your livelihood is dependent on a real estate market that can collapse, as it did in the U.S. Nor if your area of expertise is wills, trusts, and similar products that can be standardized and uploaded to the Web, along with instructions for filling out and processing. Then you have to branch out. No wonder there are so many personal injury attorneys promoting their services through TV ads.
Employment in accounting and bookkeeping soared between 2005 and 2008. After retreating about halfway in the Great Recession, it has been edging higher again since mid-2010. Tighter capitalization requirements for financial firms are raising the need for more record keeping.  
Architectural and engineering employment has recovered more than 50% of its peak-to-trough decline. The revival of U.S. housing starts, especially multi-family units, has been a blessing.  This sector still needs healthier expenditures on non-residential building projects and civil works.
Further employment gains are hampered by tight spending controls at the federal level, although a shift to more public-private partnerships (P3) is easing access to financing for many projects. Canada’s non-residential building and design sector has benefited from a longer history of P3 involvement, plus our governments have been fairly responsive to growing infrastructure needs.  
Employment in computer system design services has been growing almost steadily since mid-2003, with only a minor setback in 2009. The U.S. is the world’s high-tech leader. Corroborating evidence can be found in the performance of the NASDAQ, which has increase 200% since its trough in February 2009. A 200% increase means its level has improved by a factor of three.
Employment in “amusements, gambling and recreation” is a proxy for fun. The appetite of Americans for enjoyment is clearly reviving. This comes after years of scrimping and saving to relieve debt problems. Plus, U.S. consumers have seen their home prices increasing rather than falling and their job prospects on the mend. Some celebratory partying may be in order. 
In Canada, personal debt remains high and needs addressing, according to the experts. But our relatively upbeat real estate market has helped underpin family net wealth. The decline in value of the Canadian dollar, versus the greenback, will provide an incentive for Canadians to stay at home for their pleasure, while offering a sound cash advantage for Americans to come and visit.
U.S. employment in key industries and professions
(seasonally adjusted data)

Canada vs. U.S. monthly unemployment rate (per cent)

Two Canadian Cities were Winners in the Federal Budget Lottery

Federal Finance Minister, Jim Flaherty, presented the Conservative government’s budget on Tuesday, February 11, 2014.
According to the latest estimates, the nation’s finances are fairly upbeat. The deficit in the coming fiscal year, April 1 2014 to March 31 2015, will be minor, only -$2.9 billion.
In fact, it would disappear if a $3.0 billion contingency fund weren’t being held in reserve.  
If all goes according to plan, a surplus of $6.4 billion can be expected in 2015-2016.
The Conservatives plan to manage this feat in several tried-and-true ways: an increase in tax revenue from an improving economy; more taxes from smokers as the cost of cigarettes is raised; and a particular “oldie but goodie”, postponement of some defence equipment purchases.
It’s no coincidence that the return to a healthy surplus will occur half a year ahead of when the next election writ will probably be filed, in the fall of 2015.
Accompanying the budget were some spending initiatives directed towards two Canadian cities, Montreal and Windsor. Both will receive large sums for bridge projects.
There will be major spending in Montreal to first repair and then replace the Champlain Bridge which connects the city’s downtown with its south shore suburbs. Other existing bridge makeovers in the region will also be green-lighted.  
In Windsor, the priority – at a cost of nearly half a billion dollars – will be a second crossing for passenger vehicle and cargo truck traffic to flow back and forth between the city and Detroit.
Not all of the dollar spending will be new. Commitments to fund these projects were contained in earlier budgets. But at least the latest pronouncements confirm that these public works continue to have high priorities on the Conservatives’ agenda.
Further announcements of support for individual large infrastructure ventures at the city level is probably being held in reserve for maximum impact next year, in advance of Canadians going to the polls.
Money is also being earmarked for a National Disaster Mitigation Program to build structures to ward off damage caused by Mother Nature at her most wilful. This is in response to extensive flood damage across the nation in 2013.   
Windsor is a double victor in the latest budget document. Chrysler is looking for assistance from Ottawa and Queen’s Park to justify a billion-dollar overhaul of its van plant in the city. Mr. Flaherty is setting aside $500 million in auto sector innovation money, a portion of which will almost assuredly be used to sweeten the pot for Sergio Marchionne, the Canadian-educated head of Chrysler’s parent company, Fiat Group S.p.A. of Italy.  
The two tables below show jobless rates and year-over-year employment gains for Canada’s 33 most populous urban centres. Windsor (+3.5%) is currently ranked ninth in year-over-year job creation and Montreal (+0.5%) appears in twentieth position.
As for unemployment rates, Windsor (6.9%) presently stands in spot number 20, with a rate that’s slightly below Canada (7.0%) as a whole, while Montreal (7.9%) is a distant 29.
Statistics Canada recently published another set of statistics ‒ covering only seven cities ‒ which are of particular interest for the construction industry. With a few exceptions, these show that construction costs are remaining under wraps. 
The seven-city composite index for apartment construction in the fourth quarter of 2013 was +1.0% versus the fourth quarter of 2012. The largest year-over-year price increases occurred in Vancouver (+3.1%), Calgary (+2.1%) and Edmonton (+1.2%). The gain in Halifax was +0.6%, while Montreal and Toronto were both flat (+0.1%). Only Ottawa (-0.7%) recorded a decline.
In non-residential building construction, the year-over-year change for the seven-city composite was +0.7%. Again, Ottawa (-0.5%) was the sole city to register a drop and Toronto (+0.1%) and Montreal (+0.2%) hardly budged. The percentage increases for the other four cities were: Halifax, +0.8%; Edmonton, +1.1%; Calgary, +1.4%; and Vancouver, +2.9%.

1Peterborough, ON11.4%1Québec City, QC4.3%
2Saint John, NB8.6%2Saskatoon, SK4.3%
3Kitchener, ON6.6%3Regina, SK4.4%
4Saskatoon, SK5.3%4Calgary, AB4.8%
5Calgary, AB4.0%5Victoria, BC4.9%
6Trois-Rivières, QC4.0%6Edmonton, AB5.5%
7Regina, SK3.9%7St. John’s, NL5.6%
8Edmonton, AB3.5%8Thunder Bay, ON5.7%
9Windsor, ON3.5%9Winnipeg, MB5.8%
10Saguenay, QC2.7%10Brantford, ON5.9%
11Québec City, QC2.3%11Hamilton, ON6.0%
12Toronto, ON1.8%12Barrie, ON6.2%
13Vancouver, BC1.7%13Vancouver, BC6.3%
14Moncton, NB1.6%14Kitchener, ON6.4%
15Kingston, ON1.5%15Ottawa-Gatineau, ON-QC6.4%
16Thunder Bay, ON1.3%16Saint John, NB6.4%
17Halifax, NS0.9%17Kingston, ON6.6%
18Oshawa, ON0.9%18Halifax, NS6.8%
19Sudbury, ON0.8%19Sudbury, ON6.8%
20Montréal, QC0.5%20Windsor, ON6.9%
21St. John’s, NL0.1%21Moncton, NB7.0%
22Winnipeg, MB0.0%22Sherbrooke, QC7.1%
23Abbotsford, BC-0.3%23Oshawa, ON7.2%
24Ottawa-Gatineau, ON-QC-1.5%24Guelph, ON7.3%
25Barrie, ON-1.8%25Kelowna, BC7.3%
26Brantford, ON-2.2%26Peterborough, ON7.5%
27Hamilton, ON-2.4%27Saguenay, QC7.5%
28London, ON-2.7%28London, ON7.9%
29Sherbrooke, QC-3.2%29Montréal, QC7.9%
30Victoria, BC-3.3%30Abbotsford, BC8.0%
31Kelowna, BC-3.6%31Toronto, ON8.4%
32St. Catharines-Niagara, ON-3.9%32Trois-Rivières, QC8.7%
33Guelph, ON-5.3%33St. Catharines-Niagara, ON8.8%
Based on average of latest three months, unadjusted data.