Exchange rates tumble as the wind is taken out of any sterling gains – Buying euros, Selling Euros, GBPEUR Forecast (Steve Eakins)
Rates of exchange this week have changed dramatically with GBPEUR rates down almost 2%. This movement adds over £2,500 to a €150,000 purchase. As mentioned in my previous blogs this week the expectation was for a fall. In summary due to comments from the next Bank of England Governor, lower UK Inflation figures and the Bank of England minutes, the likelihood of further QE in the UK has increased greatly. Plus with UK Retail figures being hit by bad weather last month, the UK Government borrowing more money than expected and the IMF saying that the UK is not far away from a recession rates have tumbled. So great news for Sterling buyers however bad and expensive news for anyone with any euro exposure.
So when do I buy euros?
In the short term I cannot see much of an improvement, Wednesday next week will probably be the best day next week due to the data expected to be released from Germany and Europe. However I think it is unlikely to gain back up to the highs seen at the beginning of this week. I think GBPEUR could fall below 1.16 before it breaks 1.19.
Longer term again I can’t see too much reason to be positive, can you? The UK news has been fairly negative and there is a growing probability of more QE which would push prices further down. What euro buyers will be looking for is the next crisis from Europe as that will weaken the euro making it cheaper to buy, but is that probable?
A majority of Europe is now in a recession. Germany the power house of Europe with almost a 3rd of the whole economic output of the entire single currency only just avoided entering a recession with 0.1% growth. (This was confirmed this morning.) It seems that both politically and economically Europe has recognised that growth is desperately needed and that this will only come from new jobs. So in turn expect policies and tax breaks to be introduced to try and incentivise growth and foreign investment. When we see this their forecasts will probably improve and in turn the euro could strengthen. Bad news for any euro buyers.
Currently there does not seem to be many reasons for a euro buyer to be positive about the potential future of the GBPEUR pair…..
If you’re considering making a currency transfer and want to ensure you’re getting a competitive exchange rates when buying euros or selling euros then get in touch for a free quote – Steve Eakins – hse@currencies.co.uk
Are you getting the most from your foreign exchange? Contact the experts to benefit from our currency service and let us save you money!
Whether you are buying that dream property overseas, emigrating to pastures new or a large corporate trading regular positions across multiple currencies it is important to get as much information as possible to help with the timing of your transaction, it also puts you in the best position to try and maximise your exchange. To highlight how much the market can move anyone buying Euros in the past week has experienced a high low range of 1.163-1.1918 (a 2.4% shift) and a difference of €5,760 on a £200k position. A similar trend has been seen for the USD with rates shifting 1.9% (range 1.5015 to 1.5288) a difference of $5,460 on a £200k money exchange. Even more significant moves have been seen on the AUD and NZD – with both moving in excess of 6% against the pound in a six week period.
As you can see by timing your exchange significant savings can be made. The purpose of this website is to provide relevant information to help private and corporate clients with upcoming money transfers to arrange. As one of the authors on the site, my colleagues and I have personally helped thousands of clients with their foreign exchange and would be happy to see what we can do for you. I work for one of the UK’s largest independent currency brokers and am confident I can undercut any price you have been offered by your bank or current provider.
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As pressure remains on the pound we have the best rates for selling Dollars to buy sterling for 10 weeks and very good rates for buying sterling with Euros. (Ben Amrany)
The pound has really been hit against a host of currencies over the course of this week. Trading is now down at a 10 week low against the USD and is down by around 2 cents against the Euro this week. If the weakening of the pound is having an effect on the currency you need to purchase then please feel free to contact me at bma@currencies.co.uk and I can explain the options that are available to you to help you minimise your risk to the currency markets.
The fall for sterling all started with the drop in Inflation for the UK economy. As inflation falls it leaves the market to believe that the Bank of England are unlikely to raise interest rates and this then weakens the currency. Following on from the fall in inflation we then had the Bank of England release their minutes from their last interest rate and monetary easing decision on Wednesday. Once again this worked against the pound as three members of the Bank of England voted in favour of quantitative easing (QE). The reason why on this occasion it had such a big effect on sterling was due to the fact that the markets were expecting the number of members voting for QE to have dropped down to one or maybe two out of the nine. Recent growth figures
for the UK economy has been moving in the right direction so I think it was a surprise that three members still voted for further QE.
Going forward this could keep the pressure on the pound for the coming weeks up until the next Bank of England interest rate decision in June. Today the revised figures to the UK GDP came out the exact same so for those of you that were hoping this would have boosted the pound this did not happen. If you have an up and coming transfer to make I normally recommend my
clients act on spikes in their favour. The last couple of the weeks the pound has been fairly flat so now this movement has occurred many clients have once again capitalised on selling their Dollars and Euros to buy the pound. I feel in the long run that the pound will rise again against both the Dollar and Euro but be cautious as we have hit a low this year of 1.48 V USD and 1.13 v the EUR.
If you would like to speak with me you can call the trading floor and ask for Ben Amrany or alternatively email me at bma@currencies.co.uk with your requirement and contact details and I will discuss the best plan of action for your
circumstances.
Thank you for reading.
Ben Amrany
Why the sterling rally may now be over!
I have been watching with interest GBP movements of late very sure that we are soon to be witnessing a decline. Yesterday’s fall has continued today and I cannot see any immediate return to the kind of trading levels we saw earlier this month. If you are looking to sell the pound to buy a foreign currency say for an overseas property purchase or for business, buying sooner rather than later may be sensible. If you do not have full availability of funds a forward contract could be perfect.
Today the IMF has said the UK is a long way from from recovery and this is likely to weigh on sterling in the short term. We have pointed out the major problems for the pound in many posts and it is likely this is the start of another dip. If you are selling a foreign currency to buy sterling then you are looking at an excellent opportunity that may yet get better in the short term. Where we go from now will depend on the economic data releases before the end of the week but it is clear a negative sterling bias has developed. If you are selling beware of getting too excited as the trend will of course depend which currency pair you are interested in! For a full overview of your transfer and to be kept informed of the latest news on your rate please register your interest at jmw@currencies.co.uk
Important data this week will be the GDP data due tomorrow at 09.30 am UK time. Expectations for the release are at 0.3% growth but any deviation, (hesitation or repetition) could cause market movements! Friday we have German business consumer confidence and US Durable goods orders, all potential market movers. Sterling will I feel remain on the back foot but we could of course see some profit taking or even a ‘Friday Run’ to provide a quick boost. Remember too the Bank Holiday on Monday for the UK, this will affect payments internationally and you may find it difficult to book a price with a currency dealer on this day. Taking advantage of our ‘Market Watch’ service may be invaluable to avoid the disappointment of missing out on your desired rates over the weekend. As usual please contact me directly on jmw@currencies.co.uk to find out more, an account can be opened instantly and you can be trading within minutes. We offer same day payments so ‘not having time’ is no excuse to settling for poor exchange rates!
The sterling rally always looked to be under pressure from weaker UK data and the possibility of more QE down the line. It appears that just as quickly as it started the pound is likely to be weakening again soon.
As well as offering assistance planning and managing your exposure to the currency markets we also offer exchange rates for which we have won awards. For a free, no obligation discussion of all the events affecting your rate please feel free to contact me directly on jmw@currencies.co.uk or call 01494 787 478 and ask to speak to me Jonathan
I look forward to hearing from you and assisting in any way I can… Even if you are quite happy with the rates you are achieving a quick call or email to us to check what you are doing and at what rates could save you money.
Thank you,
Jonathan
The majority of our business is generated via referrals and recommendations. I would greatly appreciate you passing on my details to any friends or colleagues who may be in need of better exchange rates and / or market information.
Bank of England Minutes cause Sterling exchange rates to fall (Tom Holian)
After a good run against the Euro of late Sterling has had a difficult few days to the start of the week as GBPEUR rates have dropped by 2 cents. There are a number of factors to consider that have been negative to the Pound. As highlighted in yesterday’s report Inflation rates fell which caused Sterling to drop against the Euro.
In theory if inflation is low it means that the Bank of England can keep interest rates low for a longer period of time which means less confidence in investing in Sterling therefore causing the Pound to weaken.
The Bank of England minutes out this morning at 930am have seen a 6-3 split against continuing with further Quantitative Easing. The worry for the markets is that many doubt the Bank of England’s commitment to try to affect Inflation.
The recent extension of further bond-buying by the US has led to a huge amount of Dollar strength recently and with the UK deciding to opt against further QE themselves this could be another reason for Sterling’s recent weakness.
With the new Governor Mark Carney due to take over from Mervyn King in July his stance during his time in Canada is to keep interest rates low. If you’re considering making a currency transfer and want to ensure you are getting competitive rates of exchange that can improve upon the high street banks then feel to contact me directly for a free quote. Tom Holian teh@currencies.co.uk
The UK has this morning published Retail Sales which were 1.3% lower in April than in March as bad weather continues to blight the UK. Food sales also fell to their lowest monthly level in almost two years. With the UK having avoided a triple dip recession recently this gave Sterling a welcome boost but potentially the release has just papered over the cracks.
If you are buying or selling Australian Dollars feel free to check out our sister website www.australiandollarforecast.com which is more specific to your needs.
Surprise Dip in UK Inflation Figures Hurts the Pound (Matthew Vassallo)
The Pound has lost ground against both the EUR and USD during Tuesday’s trading, following this morning’s announcement that UK inflation figures fell during April. This announcement was not widely anticipated and came as a shock to investors, who hastily pulled their funds away from GBP. The news has only added to already growing fears over the long-term growth prospects of the UK economy, despite the recent news that we managed to avoid a further recession.
Today’s data will also lead many to believe that the Bank of England (BoE) now have further leeway to implement another round of Quantitative Easing, which will generally be viewed by the markets as a negative for that particular economy and may ultimately effect the strength of its currency.
GBP/EUR rates had remained fairly flat over the past few trading days but today’s poor economic data caused the Pound to fall by a cent against its EUR counterpart and a cent and a half against the USD. I expect further volatility on GBP/EUR, although any move back towards 1.20 will be dependent on how events in key Eurozone economies fare over the coming weeks. Personally I do not expect rates to break through 1.19 based on the current economic climate, with a move back towards 1.16 a possibility as the UK economy stagnates again during Q3 of this year. Although the USD has moved back through 1.52 against GBP, I do feel the spike will be short lived and I anticipate GBP/USD rates to move back towards 1.53 over the coming days.
Here at www.poundsterlingforecast.co.uk we are able to provide our clients not only with award winning rates of exchange but a bespoke service designed to give you the client, as much insight into the markets as possible. If you would like to find out the type of rates or contracts we offer, or need to be kept up to date with all the latest market movements then please call us on 0044 1494 787 478 or email me directly at mtv@currencies.co.uk.
Sterling exchange rates await key inflation data this morning – What may happen to the Pound?
Sterling exchange rates are once again still fairly flat against the majority of major currencies, as we await inflationary data due out at 09:30am this morning.
Inflation data is key at the moment for the bank of England and it appears to be a thorn in their side, should inflation creep up too high we could start to see big calls for a interest rate hike as this is a route that can be taken to tackle high inflation. An interest rate hike is generally seen as positive for the currency concerned and a rate cut is seen as negative so this could lead to a little boost for the Pound.
Tomorrow is also key, we have the Bank of England minutes from the last interest rate decision (the first since being out of recession) and any indications of rate hikes or quantitative Easing may lead to a volatile Wednesday morning for the Pound.
Do you carry out currency transfers and find our information useful? Did you know we can help with currency exchange as well? We can get award winning rates of exchange and also offer a great level of customer service for bank transfers ranging from £1000 to multi million Pound transactions. Email me today djw@currencies.co.uk with a brief description of what you are looking to do and I will be more than happy to assist you.
Brief Summary on Exchange Rates this week
Beginning with GBPEUR exchange rates we have seen the UK growth forecasts pushed up by Mervyn King this week which has seen Sterling gain against the Euro and with France announcing a triple dip recession this has also seen support for Sterling. It seems also since the Quarter UK GDP figures helped the UK itself to avoid the triple dip a little bit of confidence has returned for the Pound. The Euro has also felt the effect of weak inflation which highlights the slowdown in the Eurozone which compounds the weak GDP figures across Europe this week.
GBPAUD exchange rates have kept up their trend of recent Aussie Dollar weakness and rates are the highest in many weeks as the Aussie government announce they are expecting a deficit this year so if you’re interested in reading more click this link Weaker economic growth from China since the turn of the year has also negatively affected the AUD exchange rate and therefore if you need to buy Australian Dollars it may be worth taking advantage of these current spikes.
GBPZAR and GBPNZD exchange rates have all felt the effect of the problems globally and we have seen Sterling improve by over 2% against these two currency pairs this week and many are targeting GBPNZD to hit 1.90 and GBPZAR to hit 14.5. I for one would not be surprised if these figures are hit during next week but if so may not last for long.
Next week the Bank of England releases its minutes next Wednesday and on Thursday the UK releases its revised GDP figures so if you have a currency transfer to make feel free to get in touch Tom Holian teh@currencies.co.uk and I’d be more than happy to provide a free quote.
Could we see some more GBP strength? Where next for Sterling rates? (Alistair Ryan)
Sterling has made a fair bit of ground against most major currencies over the past couple of days. This seems to have come off the back of governor of The Bank of England Mervyn Kings Inflation Report yesterday. This was his last inflation report before he hands over the reigns to Mark Carney in July and he announced an improved growth forecast on the state of the UK economy. Since the start of the financial crisis this is the first time data has been revised in a positive manner. This is a very positive boost for the pound and although a lot of people expected it and it could have been marginally priced in to the markets we have still seen Sterling gain against the majority of currencies.
Jobs data out for the UK yesterday was a bit of a mixed bag. It was announced that although the number of unemployed people had risen, the overall percentage of people out of work fell. It is usually the way in the UK that as soon as some positive data comes out there is another data release out to counteract it. Although this may not be an extremely bad stat for the UK it does highlight that there is still a lot of work to do but we are going in the right direction.
I generally feel that we will see more Sterling strength in the near future as it seems that we are seeing a lot more positive data coming out of the UK at present. We have recently seen better than expected figures for Manufacturing, Construction and Services and I believe that unless something drastic happens in any of the main sectors the pound will gain some more ground.
If you have an upcoming currency requirement we have a number of different contract options that can help safeguard your funds against market movements. If you would like to speak with one of our specialist, friendly currency brokers then please contact me direct at atr@currencies.co.uk
