Euro buyers had a shock window of opportunity yesterday evening, with that window still currently slightly open…
After poor UK export data this week analysts have predicted an artificial weakening of the Pound, in order to kick-start sales of goods to our Eurozone counterparts. As the Euro has been the weakest major currency and our key trading partner – we’ve suffered as a result. Mark Carney (Governor of the Bank of England) is in Frankfurt this morning, discussing all things debt. Although no surprises have surfaced, Carney has mentioned that he thinks the next Interest rate move will be an increase, strengthening the Pound.
I personally would be inclined to take advantage of this spike, as the short to medium term future for the Pound looks bleak. Cameron vs Miliband last night shows a genuine start to the political timeline, with the pound expected to start falling shortly. Parliament breaks for the Election from next week so expect the slander to begin!
The US Dollar has had a very rocky past week, as speculation is still rife for both a summer and autumn interest rate hike! Janet Yellen (Chair of the US Federal Reserve) indicated that an April rate hike wouldn’t happen, however couldn’t rule out a hike in June. I personally think that the overwhelming direction for the Dollar is positive – good news for Dollar sellers!
If you’d like to take advantage of the current market positions, even if you don’t have full funds available now, I can help! Booking your exchange rate for say a property purchase in the future can be a very wise thing to do, as the last thing you want is for the market to crash and you can’t afford the house! Feel free to contact me on 01494 787 478 or email me directly AJB@currencies.co.uk
Sterling Euro exchange rates have had a mixed week as UK inflation showed a fall to 0% its lowest level since records began in 1988.
This was lower than expected but still not too much of a surprise as global oil prices have fallen recently.
The Pound has dropped by almost 7 cents against the single currency since the peak a fortnight ago.
UK unemployment came out lower than expected last Thursday at 5.7% which arguably is still very good but it was lower than the expected 5.6%.
UK Retail Sales due out tomorrow morning could provide a small boost for the Pound so it may be worth looking at buying Euros over the next couple of days if the data is positive. Expectations are for 4.7% year on year.
Bank of England governor is also due to speak on Friday which could cause further volatility for Sterling Euro exchange rates.
If you have a currency transfer to make and want to save money on exchange rates compared to using your bank then contact me directly for a free quote. Tom Holian firstname.lastname@example.org
Sterling’s value has fallen this week against almost every major currency and it now looks like we have seen the end of the recent GBP momentum. Only a couple of weeks ago the Pound hit a fresh 8 year high against the EUR, sitting at over 1.42 on the exchange. However, a poor run of economic data, including weak Manufacturing and worse than expected unemployment figures, has halted the Pound’s rise and pushed GBP/EUR rates down by over 6 cents from the recent high.
Whilst I always felt that a realignment was likely, this week’s move has been extremely aggressive and proves how fickle the currency markets can be. It is likely that the recent talks between Greek Prime Minister Alexis Tsipras & German Chancellor Angela Merkel have helped ease pressure on the EUR, with both now agreeing the Greece needs structural reforms if it going to continue as part of the single union.
We also need to remember the Bank of England’s (BoE) stance on the matter, as they have become concerned about how the Pound’s rising value would negatively affect UK exports. These fears were confirmed recently with UK factory orders falling to a 2 year low. The central bank have already indicated we will not be seeing a UK interest rate hike any time soon and I now feel it is unlikely that GBP/EUR rates will move back through 1.40 in the short-term.
Looking ahead and UK Retail Sales figures are released tomorrow and are expected to show an improvement. This could help the Pound find some support, although if figures are worse than expected then I anticipate the Pound’s slide to continue.
If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on email@example.com
First and foremost our sincere condolences to anyone involved in the air crash today, always deeply saddening to hear such news.
Regarding currency, we have seen another fairly stable day for Sterling against the Euro and Dollar yet with fairly sharp drops against the Swiss Franc, Australian Dollar, Canadian Dollar, New Zealand Dollar and South African Rand.
We saw inflation figures out earlier this morning which immediately knocked the Pound as inflation dropped to a rather concerning 0% against market expectations of dropping down to 0.1%.
The inflation issue remains a concern for the Bank of England, along with the fact that Manufacturing figures at the start of the week showing the U.k manufacturing levels are really down.
This may be partially down to the fact that Sterling has been so strong against the Euro of late which has possibly led to European clients of U.K businesses seeking to buy their goods and services from elsewhere in Europe instead of from the U.K as Sterling is just so expensive for them.
With this in mind it is no surprise that the 1.40 level for GBP/EUR did not stick around for long and although there are many problems still within Europe I personally still do not see Sterling gaining significant ground against the Euro in the coming weeks, so if you have a pending requirement to buy Euros for your business or to purchase a property overseas then it may be prudent to look at making a purchase soon rather than potentially seeing another boat of opportunity sail away.
If you have the need to exchange any currency in the coming days, weeks or months then it is key to have a proactive and efficient currency broker on your side for it. The company we work for has won awards both for our exchange rates and customer service so even if you are already set up with a broker it may be well worth you getting in touch with me directly and should save you money.
You can email me (Daniel Wright) on firstname.lastname@example.org with a brief description of what you are looking to do and I will be more than happy to contact you personally. I look forward to hearing from you.
Greece Making The Headlines Again
German Chancellor Angela Merkel met yesterday evening with Greek Prime Minister Alexis Tsipras to discuss the Greek Debt. It is clear that even though extension to certain bailout payments have been granted, Greece is still struggling financially and is pulling out even the most drastic measures to change that. There are on-going reports that With the Greek Bailout situation potentially back in the limelight, Euro buyers should ensure that they are watching their position.
GBP Exchange Rate Forecast
UK Factory Orders yesterday showed a reduction to the lowest figure for 24 months, confirming fears that exports are starting to struggle. The main factor for the reduced figures is the strong pound over the weak Euro, meaning Eurozone partners are being priced out of the market. Factory output is currently reported as being at 2008 levels – a serious cause for concern. We have seen in the past the BOE (Bank of England) act swiftly to boost export opportunities by ‘talking down’ the value of Sterling. I therefore wouldn’t be surprised to see Mark Carney (BOE Governor) make this move sooner rather than later to bring the Pound down – potentially in his address on Friday at 08:45. UK ‘Consumer Price Index’ (Inflation) figures are released at 09:30 today and again a slight reduction is expected. Inflation is moving further and further from the target of 2.0%. I wouldn’t be surprised to see the Pound weaken due to the impact of lower Oil prices, so ensure that you are ready to act swiftly if you haven’t already!
The overwhelming point to consider for anyone holding Sterling is that we are about to enter potentially the most volatile trading period for 5 years. The UK General Election is wide open with an outcome incredibly hard to predict. A hung parliament is a distinct possibility – the last hung-parliament carried huge losses for the Pound. Parliament is set to break for ‘recess’ on Monday 30th March, so expect the Politicians to then hit the campaign trail with vengeance!
Australian Dollars at Record Short Term Lows
The Aussie has seen a huge backing following the US Dollar weakening this weekend. As the old saying goes, ‘When the US sneezes, the World catches a cold’, very definitely the case here. US Dollar investors will buy Australian Dollar bonds as the potential returns are greater, meaning the influx of funds strengthens the currency. However, the Reserve Bank of Australia have stated on several occasions that they will act to avoid the currency becoming overvalued, generally by cutting Interest Rates. Therefore, if you are selling AUD I’d do so sooner father than later. If you’re buying, get in contact to make sure that you are ready to take advantage of a spike…
USD Forecast – What to Expect for the Rest of the Week
Following last week’s bold move in to the mid-1.40s, Dollar buyers have had a slight improvement. Janet Yellen (Chair of the US Federal Reserve) stated that, ‘Policy makers aren’t rushing to raise Interest rates’. This has subsequently seen the Dollar lose the gains made, and puts a big focus on to data releases this week. This afternoon the US releases Inflation data (12:30) and tomorrow afternoon Durable goods figures (also 12:30). The week is capped off on Friday afternoon with the US Gross Domestic Product figure so all in all still a very busy week for the Greenback.
New Zealand Dollar – When will we see 2.0 again?
The New Zealand Dollar has seen a huge improvement over the last 30 day (as noted in the above table), gaining back roughly 10 Cents against the Pound. The Reserve Bank of New Zealand announced on 12th March that Interest rates were not going to be cut on this occasion, and more recently a primary Kiwi Bank (NAB) have been very ‘bullish’ in their Exchange Rate forecast. NAB has indicated that due to good returns harvested from investing in NZD, the NZ Dollar should have a period of strength. However, this should be seen as a window, rather than the norm. Reserve Bank of New Zealand Governor Graeme Wheeler has the power to halt a rampant Kiwi Dollar by cutting Interest Rates so I don’t think it will be too long until a return north of the 2.0 mark is seen. If you are Selling Kiwi it may be worth making a move…
Please feel free to contact me direct to the trading floor on 01494 787 478 – please quote this blog and ask for me – Andrew Bromley. Alternatively, email me on AJB@currencies.co.uk
The Pound has suffered today against the Euro, as markets anticipate movement ahead of Mario Draghis announcement at 14:00. Draghi (Governor of the Eurozone Central Bank) is up in front of the Eurozone ‘Committee on Economic and Monetary Affairs’. Draghi will be recapping the implementation of Quantitative Easing, plus a general overview of Eurozone Finances. These statements often have a big impact of exchange rates, so tread carefully! The remainder of the day for the Euro has Euro consumer confidence figures at 15:00, followed by a meeting between Angela Merkel and Alexis Tsipras. Merkel and Tsipras plan to trash out yet more finer details on the Greek bailout so an impact on Euro trading tomorrow AM could be seen.
The US Dollar lost some of it’s gains last week, following many predictions that the Interest Rate hike could be delayed until September. USD holders should be cautious of short term movements due to speculation and data announcements, as realistically the longer term outlook is for further USD strength. Therefore if the market spikes to 1.50 and above this could be an excellent time to purchase the Greenback. If I were looking to sell Dollars in the short to medium term, I’d be inclined to act when markets push towards the 1.45 region. We saw this level nearly happen last week when poor UK employment figures, so with a strong Dollar in the build up to the UK General Election, this should be achievable. The remainder of the week for the pair has UK and US Inflation figures tomorrow, US Durable Goods figures on Wednesday and the US Gross Domestic Product reading on Friday.
If you have an exchange requirement and would like to discuss in more depth, please feel free to either email me AJB@currencies.co.uk or call 01494 787 478 – It is worth quoting this blog and my name Andrew Bromley – this will ensure you are dealt with on the best possible ledger!
Already this month Sterling has moved by over 4% from the high to low against the single currency as the Eurozone finally began their first round of Quantitative Easing.
This saw Sterling reach an 8 year high against the single currency and the highest level reached pre-credit crunch for GBPEUR exchange rates.
The Euro has also weakened to its lowest level against the US Dollar in over ten years which has caused global investors to sell Euros to buy Sterling hence the positive movements for Sterling during March.
However, over the last few days we have seen UK unemployment drop below expectations of 5.7% which although the figure is arguably very good for the British economy the markets will often move on expectation so a fall will often result in a bit of weakness for the currency involved.
The UK Budget did not really throw up many surprises so the exchanges rates remained static during the announcements.
On Friday Sterling saw a fall toward the end of the trading session as profit taking took place.
Next week the biggest day for Sterling Euro exchange rates will arguably be Tuesday as the UK releases inflation data. If UK inflation falls this typically results in weakness for Sterling as it puts off an argument for putting up interest rates.
I expect to see a fall in inflation owing to energy price falls so therefore expect to see Sterling fall against the single currency on Tuesday providing a good opportunity in the short term to sell Euros into Sterling.
On Thursday we could see Sterling recover against the Euro with the release of UK Retail Sales which have generally been on the rise.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian email@example.com