offshore savings accounts

Here’s another extract from the currency market updates at Foreign Currency Direct (www.currencies.co.uk)

Note from offshore-savings-accounts.org.uk: None of the information contained in this website constitutes, nor should be construed as financial advice. This report comes directly from the team at Foreign Currency Direct and is intended for information only.

Highlights from:

Wednesday October 24th 2007

By Alex Robertson - Regional Development Executive, Foreign Currency Direct

Sterling £

The pound strengthened on Tuesday as an upbeat speech from Bank of England rate setter Kate Barker offset a weak UK manufacturing survey. UK factory orders fell in October, a survey from the Confederation of British Industry (CBI) suggests.
However, the broader picture is that orders grew strongly over the last three months. The CBI said there was little evidence that weakness in financial markets was having an effect on manufacturers. This data will fuel arguments about whether or not the Bank of England should cut interest rates.

Barker in her speech stressed that although the risks to the UK economy are tilted to the downside, there is little evidence that the recent credit crunch will have a major impact on household consumption.

“Even if there were a major weakening in the housing market, the response of household consumption may be muted, since it is not expected to be linked either to rising unemployment or deterioration in households’ income expectations,” she said.
Over the course of this year, Kate Barker has been perhaps the key swing voter on the Monetary Policy Committee,” said Malcolm Barr, chief U.K. economist at JPMorgan Chase & Co., who used to work at the Bank of England. Barker’s remarks suggest she may favour gathering more evidence about the economy before lowering interest rates from the current six-year high.

Sterling dipped following the report, but has since clawed back earlier gains since the speech as it boosted investor’s enthusiasm for currencies with relatively high yields such as the pound.

The US Dollar $

The U.S. economy still faces pressure from a drawn-out housing-market slowdown but will “probably not” slip into recession as a result, former Federal Reserve Chairman Alan Greenspan said on Tuesday. In a broad-ranging question-and-answer session Greenspan said chances of a recession are “less than 50-50.”

This was compounded by a speech made by Federal Reserve Bank of Chicago President Charles L. Evans on the same day. Evans, who votes on interest rates this year, stressed the importance of “risk management” in determining Fed policy and noted that “uncertainty” about the impact of financial volatility has increased in the past week. Some anticipate the Fed will lower rates for a second time on Oct. 31, and Evans didn’t rebuff those expectations.

Canada’s Dollar Rises

Canada’s dollar rose to a 33-year high on Tuesday, the currency extended gains after the government report showed Canadian retail sales rose 0.7 percent in August, faster than economists expected, led by new car dealers.

This was supported by Investors buying currencies of commodity exporters, such as Canada. A commodity is something for which there is demand and generally, these are basic resources. Canada is considered to be a major commodity exporter due to the fact it is the second largest oil exporter.