Daily Archives: October 25, 2011
EU summit potentially postponed. What the effects may be from the summit for sterling exchange rates!!!
As Daniel wrote what looked like the time table of events for tomorrow’s crunch talks in the EU summit, it has come to light that tomorrow’s meeting may have been postponed. There are rumours circulating stating that France, Germany & Italy cannot agree how to increase the EFSF (European Financial Stability Facility)
The issues which have caused much uncertainty to global financial markets over the last few months are still dragging on the eve of one of the most important EU summits for years. If the EU cannot agree how to write off Greek debt and how to increase the EFSF the uncertainty will continue. All the markets are looking for a resolution as soon as possible and when the unconfirmed rumour hit the market sterling exchange rates strengthened to 1.1527 against the Euro to then come crashing back down to 1.1476 about 30 minutes later. This goes to show that sometimes just rumours can move exchange rates so quickly. I am sure that if the summit does go ahead then tomorrow could be one of the most volatile days that we have seen for a long time.
Everyone that i am speaking with is speculating as to what the outcome may be from the summit and what it may do for the pound. My opinion is below.
No Summit – Pound up against the Euro but down against a range of other currencies like the USD, CAD & CHF but up against the AUD, NZD & ZAR as investors may turn away from riskier currencies.
Summit to go ahead and positive comments from EU ministers - Pound down against the Euro but up against the USD, CAD & CHF potential losses against the AUD, NZD & ZAR as investors turn back to these riskier assets.
I would love to hear your opinion on how you feel events will pan out tomorrow. Please email me with your opinion at bma@currencies.co.uk or call me 00441494787474. If you have a requirement to purchase any major currency then I will be happy to explain how we can make you a saving on your exchanges over the high street banks.
Information on European meeting for tomrorrow.. Quite simply one of the most important days in the short history of the Euro
For your guidance a timetable of key events tomorrow in UK time runs as follows:
11:00: Merkel’s speech to the Bundestag
11.30: Bundestag Debate
13.00: Bundestag Vote
16.45: European leaders arrive for meeting
17.00: Working session of the European Council
18.15: Working dinner
19.00: Bilateral meetings and Euro-zone only session
21.00: Potential press conference and announcement of decisions
Throughout the day it would not surprise me to see some fairly jumpy markets so there will no doubt be some great buying and selling opportunities that arise…. Do you want to be kept up to date with the latest??
Open a free, no obligation trading facility at www.currencies.co.uk using DANIEL WRIGHT as your point of contact, I will then get in touch to discuss your requirements and also be happy to assist you in getting a great rate of exchange should you wish to book anything out.
European Events shaping our Pound Sterling Forecast
There is tremendous coverage given to the European Debt Crisis at present and quite rightly so. This week we should finally have some answers to the now old but still testing question of ‘What to do about European Debt?’. Progress on this issue really needs to be achieved before the major western economies can really start ‘growing’ and moving forward. Exposure to the European Debt crisis is the proverbial chip on the shoulder for UK, Europe and America right now. The uncertainty presented is gving everyone reason to contemplate a double dip recession at the hands of a default by Greece. As I have pointed out a weak Europe is bad for the Pound. A Eurozone in recession will not buy British goods and services and as our largest trading partner (accounting for 40% of UK trade) we want a strong Europe. In the short term it is likely any resolution and plan this week will not only be greeted by smiles across European leaders faces, but also Euro strength and therefore the end of what has been an impressive sterling rally against the Euro. If you have any GBPEUR trades assuming this resolution is achieved I would be positioning to trade sooner. The outcome could really go either way so it would be sensible to hope for the best but prepare for the worst.
Keeping with the European theme it appears there is growing discontent in the UK at British involvement in Europe. Cameron faced his biggest challenge last night with over 80 MP’s calling for a motion to be passed requiring a referendum on the UK’s membership of the European Union. Whilst Cameron won (and even if he lost there would have been no obligaiton to pay attention to the outcome), the political consequences could particularly longer term be damaging to the Pound. As pointed out above the UK does 40% of it’s trade with Europe. This doesn’t mean we shouldn’t seek to address the nature of our relationship with Europe, but complete withdrawal, particularly at the moment as the Eurozone is undergoing such fundamental problems could be disasterous. Any businessman would not sever ties with his biggest client just because he found some of their terms unfair.
If you have any currency trades to make I would be very weary of current events. A sensible idea would be to make one of the team here at Pound Sterling Forecast aware so we can keep you posted on market movements that will affect your trade. We are currently managing the corporate and private requirements of many of our readers and want to make sure everyone out there gets the best exchange rates. The bank is not your only option and we have never had difficulty beating other currency sources. Indeed our firm have won awards from The Sunday Times and The Telegraph for our exchange rates. Our free no obligation service is aimed to make you aware of what is driving the market and ensure when you trade it is done at the very best rates. If you would like to discuss anything further please call me direct on (+44) 1494 787 458 or you can e-mail jmw@currencies.co.uk. One of the team or I will be happy to explain exactly how it all works so you can see if it is worth your while. I am sure it will be! And whilst we try to update the site as regularly as possible we couldn’t begin to cover every single event driving sterling exchange rates so recommend that you speak to us so we can ensure you are made aware of all your options in these unsettled times.
UK Current account figures at 09.30 am showed a reduction in the deficit, which is good for the Pound. At 09.45 the Governor of the Bank of England, Mervyn King will be giving evidence to the Treasury Select Committee. This is to discuss the Quantitiative Easing decision made earlier this month. It is to an extent a formality but we could see discussion of further reasoning that may give rise to further QE. The Misery Index we have referred to previously looks at the unemployment rate plus the inflation rate. The Misery Index is now at it’s highest level for 19 years! In the aftermath of the 2007-8 crisis at least we had the hope that things would get better eventually. Well we are four years on, can we really say things are better?
If you would like to discuss any of the issues in the post or any of the issues that are right now making your currency exchange more or less expensive, please get in touch on the details above or make an obligation free enquiry on the page.
