Early gains for FTSE fizzle out

Early gains for FTSE fizzle out

The London market was virtually unmoved as an attempted rally from Monday's declines fell flat.

The FTSE 100 Index shed more than 2% on Monday on falling commodity prices, but early gains fizzled out to leave the benchmark index just 2.6 points higher at 4328.6.

Despite a "solid" first quarter performance from supermarket giant Tesco and better than expected US housing figures, further weakness in the mining sector hampered progress.

Investors are still nervous over the sustainability of recent share recoveries, while economic data raised possible inflation concerns after a lower than expected drop in the Consumer Prices Index to 2.2% in May.

Among the Footsie risers, Tesco was helped by underlying like-for-like sales growth of 4.3% in the 13 weeks to May 30. The figure was in line with recent trends and resulted in shares climbing 5.5p to 361.6p, a gain of more than 1%. Rival Sainsbury's, which is due to issue a trading update, was 3.5p higher at 331.75p.

The biggest rise of the session came from BT Group after Morgan Stanley became the latest broker to speculate about an upturn in the company's fortunes following the crisis at its global services arm. Shares, which recently hit a record low, were 7.6p higher at 102.5p, a gain of 8%.

Banks were also on the risers board, with Lloyds Banking Group continuing gains as it rose another 3%, or 2.5p to 69.3p. But elsewhere in the banking sector, Barclays lost 1.75p to 277p despite Shore Capital upgrading the firm to buy.

Shore believes the sale of its fund management arm and an improving economy will mean the bank is unlikely to need further emergency funds. The broker kept Lloyds and RBS - 0.2p up at 38.1p - on hold.

A number of miners began on the front foot after their battering, although many finished the session on the fallers board.

The four biggest Footsie risers were BT up 7.6p at 102.5p, Man Group ahead 11.75p at 286.25p, Lloyds up 2.5p at 69.3p, and National Grid ahead 17.5p at 544.5p. The biggest Footsie fallers were Rio Tinto down 71p at 2829p, BG Group off 24p at 1076p, Smith & Nephew down 9.5p at 452.5p and Amec down 14p at 668p.

Currency Exchange Rates

Quotes delayed at least 60 minutes.
This exchange rate is based on the daily rates for the US dollar.

In the Compare to box, select the currency that you want all other currencies compared to. In the table below, the second column shows the value of one unit of each currency, as expressed in the Compare to currency. The third column shows the value of one unit of the Compare to currency, as expressed in each of the listed currencies

Currency	In British pound	Per British pound
British pound	1.00000	1.00000
Argentine Peso	0.16307	6.13251
Australian dollar	0.48724	2.05238
Brazilian real	0.31466	3.17804
Canadian dollar	0.54153	1.84661
Chinese yuan	0.08969	11.14932
Euro	0.84548	1.18277
Hong Kong dollar	0.07907	12.64719
Indian rupee	0.01286	77.77415
Japanese yen	0.00627	159.59531
Korean Won	0.00049	2,058.22468
Mexican Peso	0.04584	21.81299
Russian Rouble	0.01959	51.05434
Swedish krona	0.07804	12.81397
Swiss franc	0.56117	1.78198
US dollar	0.61280	1.63185

Page generated 21:53 London 15/06/2009

Cross-currency Table

This cross-currency table shows exchange rates for the six most common currencies. UK £ Euro US $ Au $ Ca $ Japan ¥ UK £ 1.00000 1.18296 1.63212 2.05272 1.84691 159.62135 Euro 0.84534 1.00000 1.37969 1.73524 1.56126 134.93378 US $ 0.61270 0.72480 1.00000 1.25770 1.13160 97.80000 Au $ 0.48716 0.57629 0.79510 1.00000 0.89974 77.76100 Ca $ 0.54145 0.64051 0.88370 1.11144 1.00000 86.42630 Japan ¥ 0.00627 0.00741 0.01023 0.01286 0.01157 1.00000

Page generated 21:52 London 15/06/2009

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How does it work?

How does it work?

Step 1

Firstly read our terms and conditions and then complete the application form and return it to us. Please remember to indicate that you wish to use the regular currency transfer plan on Section 5 of the application form. You will also need to provide us with a photocopy of the bank statement for the account from which you will be making your direct debit.

Once your account has been activated, we will contact you to confirm that you can place your order.

Step 2

Call us on +44 (0) 117 311 3252 to place your currency order. The exchange rate quoted to you will be fixed for the duration of your transfer plan meaning that both the amount you pay in sterling and the amount of currency paid to you is constant throughout. At the time of placing your order you will need to make a deposit by debit card. Other methods of paying the deposit can be arranged.

Step 3

Once your order has been placed, we will send you a contract note by email, post or by fax. You will need to complete the direct debit mandate on the contract note and return it to us. There is nothing more for you to do once you return the direct debit mandate.

When your transfer plan is coming to an end we will endeavour to contact you to see if you wish to renew your contract.

Frequently asked questions

What currencies can you deal in?

We can deal in more than 25 different currencies and send money to most countries. Call us on +44 (0) 117 311 3252 or email us to see if we can help.

How do I make my payment to Hargreaves Lansdown?

You will need to make a deposit by debit card when placing your order and then all future payments are made by direct debit. Your deposit can be made by an alternative payment method with prior agreement.

Can I use the regular currency transfer plan to convert a foreign currency back to sterling?

The service is for transfers from sterling to another currency only. However we can convert one-off payments from a foreign currency to sterling.

Are there any other costs or charges?

There is no commission and monthly transfers above £500 in value are free of charge. There is a £7 fee for transfers under £500 per month. There are no other costs or charges made by Hargreaves Lansdown, however, correspondent's banks and your recipient bank may make a small charge to route and receive your funds.

What date will the direct debit be collected from my account?

Direct debits will be taken on the 7th of the month, or next working day if the 7th is a non-working day.

When will the ongoing foreign transfer be made?

Onward transfers to your designated bank account will be made five working days after the direct debit collection.

Is there a minimum monthly amount I can transfer?

Yes, the minimum amount is £250.00.

How much deposit will be required to commence my regular currency transfer plan?

Two months' worth of deposit will be needed for regular currency transfer plans between 6-12 months while a three month deposit will be necessary for 12-24 months.

Can I cancel my regular currency transfer plan during the contract?

Yes. But you must give at least one calendar month's notice in writing.

How much could you save?

Month	Amount in £'s	Bank transfer charge	HL transfer charge	Currency received from bank	Currency received from HL
1	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
2	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
3	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
4	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
5	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
6	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
7	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
8	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
9	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
10	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
11	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
12	£1,000.00	£25.00	Nil	€ 1,404.00	€ 1,469.30
Total				€ 16,848.00	€ 17,631.60
You receive an extra This is a typical saving available through the Hargreaves Lansdown Currency Service. The amount of currency received from the bank is calculated after the transfer fee has been deducted. Please note: There is a £7 transfer charge for monthly transfers under £500.					€ 783.60

Regular Currency Transfer Plan

If you have a need to make regular payments abroad in a foreign currency then our regular currency transfer plan could be exactly what you are looking for. Our competitive exchange rates will give you a cost-saving way to convert your currency, the service is commission free and there are no transfer fees for monthly amounts over £500 in value.

To give you the security of knowing exactly how much it will cost you in pounds and how much currency will be transferred, we will fix the exchange rate for the duration of your transfer plan. Plus your payments will be collected by direct debit, making the whole process simple and hassle free.

What can you use the service for?

• Making overseas mortgage payments
• Paying your UK pension overseas
• Paying your UK salary abroad
• Transfers for living expenses
• Transferring rent from a UK property abroad
• Making regular payments to relatives overseas
• Paying monthly instalments for an overseas purchase

Whatever your reason for transferring money abroad, we can save you money by providing low cost exchange rates and low transfer fees (free if over £500 per month) compared to high-street banks.

What are the benefits?

The aim of the regular currency transfer plan is to provide you with a hassle-free way to transfer money abroad, while saving you money on transfer fees and the exchange rate when compared to high street banks. The benefits of using our service include:

• Competitive exchange rates
• No commission
• Free transfers for amounts over £500 per month (£7 if under £500 per month)
• Transfer plans available from 6 to 24 months ahead
• A fixed exchange rate for the duration of your transfer plan
• Knowing how much sterling to pay and how much currency will be transferred each month
• Payments collected by direct debit
• Direct access to a currency specialist
• A global choice of currencies

How to start making savings

Step 1 - Getting started

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Download an application form or call us on 0117 311 3252 to request an application pack. Once you have received your pack and read the terms and conditions of the service, please complete the short application form and return it with the necessary identification documents and payment information as listed on the front of the application form.

Please remember that registering for the service now does not obligate you to make a transaction, but does enable you to act quickly when you need to.

Step 2 - Ordering your currency

Once we have written to you to confirm your account is open, you will be able to order your currency by calling us on 0117 311 3252. By discussing your currency needs with you, we will be able to help you decide on the type of transaction most suitable for you. This will give you the comfort of knowing that the currency will be there when you need it.

If you choose a Spot transaction we will take a deposit of 1% by debit card before taking your order. If you are placing an order to receive the currency at a point in the future, a “Forward”, then we will require typically 10% of the value before taking your order.

Step 3 - Paying for and receiving your currency

Once we have carried out your transaction we will send you a contract note by email, fax or post. The contract note will clearly show the date on which we require cleared funds from you (if you haven't already paid the full amount) and the date on which we will send out your foreign currency. We accept payment by CHAPS (same-day electronic transfer) and debit card. Payment by cheque is available at our discretion. We cannot accept payment by BACS (typically a 3 business day electronic transfer).

Any questions?

Call us now on 0117 311 3252 to talk to a currency specialist.

Fix the exchange rate

When buying a property abroad, or indeed for any large currency transaction where the payment date is some way off, you need to consider the impact that an adverse exchange rate movement could have on your costs. For example, a property costing €200,000 would have cost £148,345.94 on 14th February 2008. Just two months later on the 14th April 2008, the euro had risen in value against the pound and the same property would cost £159,795.46 - nearly £11,500 more, or 7.72%. Of course, the exchange rate could move in your favour but it is a risk you may not want to take. The MSN Currency Service offers you a variety of options giving both the certainty of knowing exactly how much it is going to cost you by fixing the exchange rate from the outset and the flexibility of a timeframe to suit your needs.

Please note: The exchange rates and dates used in the examples are for illustration purposes only.

Forward Contracts - a simple way to fix the exchange rate

The technical term for fixing the exchange rate for a date in the future is a Forward. It means you can fix the exchange rate today on a transfer you intend to make at a later date. This type of transaction can be particularly important for buying an overseas property when the final payment is not due for several months but you need the certainty of how much the foreign currency is going to cost you in sterling. Forward contracts can be anywhere between three working days and two years ahead. You will be required to make a deposit of typically 10% of the value of your transaction when you place your order. The balance is then payable a few days before the settlement date.

For example, the final cost of your new French apartment is €200,000 and you will need to pay the developer in 5 months' time.

You have calculated the amount in Sterling at today's exchange rate and decide that the current amount is very close to your available budget. With this in mind you make a 10% deposit and place a Forward contract to avoid the risk of any adverse currency movements, so that the cost of the apartment will not unexpectedly rise above your budget. You are quoted a rate of €1.2400 which you accept and the deal is confirmed immediately.

You are now safe in the knowledge that whatever happens to the exchange rate, the amount you owe is fixed. All that remains is for you to forward the balance to the MSN Currency Service on the payment date so the €200,000 can be sent to the developer on time.

Immediate transfers - a quick and easy way to buy foreign currency

Occasions may arise where you need your currency straightaway. This could be because you are about to complete on a property or because you want to take advantage of a favourable exchange rate. In most cases we can convert your money immediately and arrange the onward transfer of your chosen currency on the settlement date - normally just two business days after you place your order. The technical name for this type of instruction is Spot and is simply the quickest way of exchanging one currency for another. A one per cent deposit will be required when you place your order.

For example, you have decided to buy a property in France and need to pay €150,000 to the developer as soon as possible to complete the purchase.

After opening an account you discuss your requirements with a MSN foreign exchange specialist. You decide to carry out a Spot transaction and are quoted a rate of €1.2450 to the Pound. After paying your deposit of 1% you accept the quoted rate and the deal is confirmed there and then over the telephone. We immediately send you a contract note giving you full details of your transaction including the amount you owe in Sterling. In this example you would need to pay £120,481.93 within 24 hours of placing your order. It is essential that your payment is made on time so that in most cases we can transfer the €150,000 to you typically just two business days after you placed the order.

Please note: The exchange rates and dates used in the examples are for illustration purposes only.

The flexible way to buy foreign currency

When buying foreign currency there are a number of factors you need to consider.

• When do I need the currency to be transferred? – Straight away, on a specific date, or over a period of time?
• How many payments do I need to make? - A one-off payment or a number of smaller payments?
• How do I protect myself against adverse currency movements? - We can offer you a range of contract types to help you protect yourself against increased costs caused by foreign exchange movements.

Whatever your currency needs, we can help

The MSN Currency Service can offer you a variety of different choices to help make the whole process as simple and painless as possible. You can choose from:

• Immediate transfers
• Fix the exchange rate
• Choose a timeframe
• Regular currency transfer plan

Welcome to the MSN Currency Service

Save £’000s on your foreign currency

If you have a foreign currency need, for example when buying abroad, you need to know about an easy way to save £’000s on your foreign currency.

MSN have partnered with Hargreaves Lansdown to provide you with highly competitive exchange rates.

Furthermore, the service is commission-free and you will have direct access to a currency specialist who will help you time the transfer and minimise the exchange rate risk.

To find out more call now on 0117 311 3252, or
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download an application form.

Benefits of the MSN Currency Service

• No commission
• Competitive exchange rates
• Fast conversions and transfers
• Fixing the exchange rate for up to 2 years ahead
• Fixing the exchange rate for a flexible time period
• Making multiple payments at the same exchange rate
• Setting up a plan to make regular currency transfers
• A global choice of currencies
• Direct access to a currency specialist

Interesting times for Sterling

In the decade prior to the 'credit-crunch', foreign exchange markets were simpler than today. Certain key factors influenced markets in a logical and rational manner, and king of all these factors was interest rates.

Interest rates represent the price of money - they are the rate of return for holding a currency and the price of borrowing it. Historically, a cut in interest rates would tend to lead to a fall in a currency's value, and vice versa. Money flowed from currencies where the cost of borrowing was relatively cheap (e.g. Japan), to currencies where the return (interest rate) was relatively high (e.g. Australia), in what was known as the 'carry-trade'.

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However, in recent times central banks have tried to stimulate economies by slashing interest rates to record lows: US 0-0.25%; UK 0.5%; Japan 0.1%; Switzerland 0.25% and the Euro zone 1% (at the time of writing). This has levelled the playing field, and caused other factors to become more important for exchange rates. These include signs that an economy might recover more quickly than its peers, levels of government debt, and the cost/effectiveness of unconventional measures such as 'quantitative easing' (increasing the money supply).

Hargreaves Lansdown's weekly currency report

The key theme in 2009 has been risk-aversion. Currencies perceived to carry a greater degree of risk (emerging market currencies, and the high-yielding antipodean Dollars) have been shunned in favour of the perceived "safe-havens" (Yen, Swiss Franc, and most importantly the US Dollar). This explains, for the most part, the Dollar's irresistible rise throughout this crisis. Another key determinant has been the credibility of economic policy - The US Federal Reserve, and to an extent, the US government are perceived to have got to grips with the situation more quickly than other countries' monetary and political authorities. The fast, decisive actions taken pleased the foreign exchange markets, and as a result the Dollar benefited. Sterling, on the other hand, has been hit by the market's negative perception of the UK's fiscal policy, especially the spiralling budget deficit.

So what does this new world order mean for Sterling? Most believe that UK interest rates are likely to remain near zero for some time, and that inflation won't rear its ugly head, in the short-term at least. Markets determine the value of currencies via a mixture of economic fundamentals and sentiment. In a system of floating exchange rates, currencies react to economic variables, adjusting to imbalances in trade flows and productivity and thus bringing relative prices into line.

Save £000's on your foreign currency

Sterling has recovered a little in 2009; indeed it currently stands more than 8% away from its low against the Euro, and nearly 12% off its low against the US Dollar. Many analysts believe that Sterling is undervalued based on a range of economic factors. However, sentiment towards Sterling needs to improve before these factors can produce a meaningful recovery. Sometimes, it takes an 'event' to trigger this - in the case of Sterling versus Euro, this could be as simple as a sudden improvement in UK data, though we suspect that problems in the Euro zone might ultimately prove to be the catalyst. With different member states being hit by the downturn to differing degrees, the difficulties faced by the European Central Bank (ECB) in setting a "one-size-fits-all" monetary policy could become more apparent. Additionally, the internal strains caused by some members' failure to stay within the economic boundaries set for the Euro could further destabilise the Euro zone. In the case of the US Dollar, Sterling's recovery could be more gradual, the greenback sliding as risk appetite improves.

Until the situation becomes clearer, we expect foreign exchange markets to remain volatile. It has never been more important to make the most of your Sterling, and keep abreast of market developments. The MSN Currency Service aims to offer the best exchange rates, the best service, and the best informtion.

Sterling Dollar Déjà Vu?

"A weak currency arises from a weak economy, which in turn is the result of a weak government." - Gordon Brown, 1992

The then Shadow Chancellor's words in the wake of Black Wednesday, have come back to haunt him in recent months, as he has presided over a similar devaluation of Sterling. Black Wednesday refers to the 16th of September 1992, when the Conservative government was forced to withdraw the Pound from the semi-pegged exchange rate system known as the Exchange Rate Mechanism (ERM). The similarity can be seen in the charts below, which show the value of the Pound against the US Dollar falling from over 2.00 to around 1.40 during the winter of 1992/3 and the second half of 2008:



Indeed Black Wednesday is not the only historical parallel which can be drawn. In 1949, Clement Attlee's government devalued Sterling by 30% (despite repeated assurances that it would not do so). In 1967 the Wilson administration devalued Sterling again, prompting the Prime Minister to deliver his famous "pound in your pocket" speech in an attempt to reassure an uneasy electorate. In 1976 the Callaghan government went cap-in-hand to the International Monetary Fund after Sterling plunged to record lows, amidst fears over the size of the budget deficit.

Sound familiar? Politically the similarity between all these Sterling crises is that the government in power did not survive the next election. Economically the reasons behind the crises vary - the big question now is what happens next?

There is a growing opinion (albeit retrospective) that the events of 1992 were in fact of great benefit to the UK economy, and represented a macroeconomic turning point. The weak Pound allowed exporters to pull the UK out of recession, and we entered a period of stable and low inflation, low unemployment and steady economic growth. Indeed some economists now refer to the 16th of September 1992 as "White Wednesday".

Of course, past events are not a perfect guide to the future, and it would be dangerous to try to forecast upcoming movements in today's unique economic circumstances based on a period of history. However, both the Bank of England and the government have spoken in recent weeks of their hope that Sterling's weakness will help export businesses to lead the recovery (or at least soften the blow of the downturn). Sterling continues to be in the doldrums at present, with no economic recovery evidenced in the data as yet. Indeed it is not entirely clear whether Mr Brown will be the latest Labour Prime Minister to ask the IMF for a bailout.

Until the situation becomes clearer, we expect foreign exchange markets to remain volatile. To find out more about the MSN Currency Service, visit the MSN Currency Centre, or call 0117 311 3252.

Will history repeat itself once more? Whatever the outcome, stay informed and be ready to act.