Foreign Exchange Daily Market Update 11/08/2016

Fri, August 12, 2016

Peugeot joins Dell in raising prices after Brexit. 

British consumers are starting to feel the costs of Brexit, with companies starting to raise prices of everything from cars to carpets to counter a plunge in the Pound caused by the U.K.’s vote to leave the European Union.

French carmaker Peugeot and Citroen increased its prices, by an average of 2% on Aug. 1, a spokeswoman said Tuesday. The increases make up for part of the pound’s 10 percent drop against the euro and its 13 percent fall versus the dollar since the June 23 referendum.  We took a reasoned measure given the currency fluctuations,” the spokeswoman said, confirming an earlier report that its Peugeot 308 hatchback rose by 2.8%, or 435 pounds ($565).

While some companies have stood firm on prices, worried about losing market share in competitive U.K. businesses like groceries, others are moving quickly to pass along the effects of the weaker pound. The increases underline forecasts for an uptick in inflation after the country flirted with deflation last year. 

Some industries, like tourism, are more averse to exchange rates than others, like electronics. While British holiday makers hitting the beaches of Spain or Italy need to convert Pounds to Euros, pricing of consumer gadgets is more complicated. In the economic recovery that followed the 2009-10 downturn in the U.K., the Pound rose along with prices of devices like portable music players because of increased demand,

Since the referendum, PC maker Asustek Computer Inc. has said it plans to raise U.K. prices by 9% in October, while Dell Inc. said in a statement that the weak pound “will have a direct impact on the price we sell some of our products to our U.K. enterprise customers.

The Pound fell to $1.294 against the Dollar this morning Sterling also weakened to €1.1607 against the Euro.

Data to look out today.   

10:00 Eur - Eur Zone GDP.

13:30 USD Retail sales expected to be worst.

CURRENCY PAYMENTS MADE SIMPLE

PRESS RELEASE

KBRFX was mentioned in the Essex Chronicle for the top 100 companies by turnover in Essex http://www.essexchronicle.co.uk/100-Essex-businesses-revealed-annual-survey/story-25140555-detail/story.html

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