best exchange rates for dollars pounds euros

IMS FX DAILY MORNING REPORT - Friday 21st January 2011

Today's Interbank rates -

POUNDS TO US DOLLARS 1.5902
POUNDS TO EUROS 1.1756
POUNDS TO AUSTRALIAN DOLLARS 1.6102

EUROS TO US DOLLARS 1.3525
EUROS TO POUNDS 0.8505
EUROS TO AUSTRALIAN DOLLARS 1.3695

POUND HEADLINES:

• UK retail sales volumes rose only modestly in December 2009, dashing market expectations for a much stronger outturn on the back of shoppers bringing purchases forward ahead of the return of VAT to 17.5%.
  However, whatever December's outturn, the 2011 landscape does not look welcoming for UK consumers, with larger taxes, soaring fuel and energy prices, reduced disposable income and, now, potentially an
  earlier-than-expected hike in interest rates to factor in alongside deep fiscal retrenchment.
• We look for UK consumer spending growth to slump to just 0.3% in 2011 after quite resilient 1.03% gain last year. However, should interest rates rise sooner than we currently expect (we forecast a first hike in Q4), this figure could comfortably slip into negative territory. The implications for UK economic growth are clear.

EURO HEADLINES:

• A fairly unexciting overnight session for Euro crosses with the exception of EUR/CHF as 1.30 gives way supported by budding optimism that periphery bond purchases by the EFSF could finally restore some stability. The IFO tops the calendar and after stellar gains of the past few months, the risk now must be that sentiment is starting to level off, though it may be early days for German exporters to feel any pushback from policy tightening in EM.
• The German economy faces fundamentally different challenges in 2011. However, its export-led growth model continues to motor along, underpinned by resurgent global demand. There are positive signs that household spending is reviving and GDP growth prospects are upbeat for 2011.

US DOLLAR HEADLINES:

• The dollar index found support in the 78.538 area as equities and commodities continue to suffer, but with the calendar fairly light today, we suspect follow through buying may well be absent as investors look ahead to next week's FOMC.

If you need to buy, sell or make an international payment today then please call me for a free quote.

Kris Charalambides

FX Broker

kris@imsfx.co.uk

www.imsfx.co.uk

Tel: 0207 183 2790