Overseas Real Estate Blog

We have many clients who about to complete on properties and a number who are watching markets very closely for more signs of sterling strength to optimise their foreign currency payment timings.

Well, I have some more encouraging news in the report below from International FX. You will see regular blog reports on currency on this blog. Currency and property investment are intertwined and clearly affordability of property can be changed either way with currency movements. Please see previous posts on some comment on about how to take advantage of.

Also check out offers here and on www.jet2letproperty.com that are in UK Pounds, if that is your main currency. If you have euros or dollars or other currencies then currency can be still relevant as you need to consider what currency to take any mortgage out on.

So here is yesterdays currency report from our sponsors, International FX

USD

The dollar remained firm against the Euro as speculation mounts that the Federal Reserve may soon pause from cutting interest rates while the European Central Bank is more widely expected to begin trimming borrowing costs in the coming months. Markets anticipate the Fed will cut interest rates by a quarter point next week but expectations are building that it could then refrain from any further cuts. Data out this afternoon showing US new homes sales plummeted 8.5 percent did little to unseat this view and the dollar remained firm. Ashraf Laidi, currency strategist at CMC Markets, said any signal from the Fed next week that the cycle of rate cuts could herald the start of a significant recovery for the US currency. "In the event that the FOMC shows any sign of reducing its easing policy, then currency markets will obtain the necessary green light to accelerate the buying in the dollar," he said. The number of U.S. workers filing new claims for unemployment benefits fell unexpectedly last week, a government report said Thursday. Initial claims for jobless benefits decreased by 33,000 to 342,000, the Labor Department said.

Economists surveyed by Dow Jones Newswires had expected a climb of 3,000 new claims which in turn boosted the dollars strength. Even the four-week average of new claims, which economists use to smooth out volatility in the weekly numbers, decreased last week by 7,250 to 369,500 from 376,750. Still, concerns about a weak labor market persist in wake of a recent Labor Department report that showed jobs in March suffered the biggest decline in five years. A healthy job market is key to a healthy economy, but turmoil in financial markets triggered by problems in the mortgage market threaten to push the economy into recession mode.

Euro

By contrast, expectations have built today that the European Central Bank will be forced to cut interest rates in the coming months following a much weaker than expected German business survey. The Ifo research institute said its April business climate index for Germany fell to 102.4 from 104.8 in March, well below analysts' forecasts of a decline to 104.3. In recent months economists have been surprised at the strength of Ifo surveys, providing support to the idea that the Euro zone economy has out witted the US and will weather the credit crunch relatively unscathed.

However today's data and yesterday's weak Euro zone manufacturing PMI survey mean many analysts are now questioning this idea, boosting expectations the European Central Bank will be forced to cut interest rates in the coming months. "The Ifo figures out of Germany this morning look very weak which would stem inflation concerns slightly and may give room for the ECB to cut rates," said Mic Mills, a trader at TradIndex.com Sterling Sterling rose against the Euro but fell against the dollar on Thursday as contrasting data from the UK economy gave investors mixed signals on prospects for interest rate cuts. Bank of England policymaker Andrew Sentance said the pound was likely to remain weak for some time and expectations of further interest rate cuts were driving sterling lower.

The pound got a brief lift on Wednesday when it emerged that Sentance and fellow BoE policymaker Tim Besley voted to keep rates on hold this month, but it came under renewed pressure as investors still expect rates to fall. Investors will eye UK GDP data that is out today for more clues on the health of the UK economy.