GBPEUR and GBPUSD updates, what is the exchange rate (Steve Eakins)
Cable prices (GBPUSD) have remained fairly flat over the last few trading sessions but expect some movement over the next 36 hours. The reason behind this is that there is a big expectation that the FED will announces additional Quantitative Easing into the US economy at their next meeting tomorrow. In my opinion it is almost certain that FED will announce that they will once again start to buy Treasuries outright, which is a different program compared to Operation Twist which ends later this month. The figures are scary, the next round is expected to be $45 billion which will make the total spent by the US in these programs to $4 trillion.
So what will happen to the USD?
Well due to this announcement being wildly expected I would expect little change in rates in the run up to the meeting. In fact if they come out as expected I would not expect much change after. However the risk is that if they release a different figure this will be priced into the market very quickly, moving rates within a few minutes. It is this movement that puts everything from house purchases to services costs at risk of costing thousands more. I am not a risk taker personally so if I was in the markets at the moment I would limit my exposure using a limit or stop loss order. This puts in automatic buying orders if the rates move to a target that you set and as a result limit your exposure in the market. Generally if I was a dollar buyer anything towards 1.61 would be a buy, if I was a seller, anything towards 1.60 would be a sell.
If you would like more information specific to your situation feel free to contact us, we can put together a personal strategy for you dependant on your risk appetite and time frames. PLUS we have won a number of awards for both our service and our rates of exchange so you can feel comfortable that we will be saving you money on the exchange. Simply put if this was not the case we would not be in business.
EURO news
In Europe the main news has been coming out of Italy over the last 48 hours. Speculation built and was then confirmed by the government that the Italian Prime Minister will resign following the 2013 budget next year. This weakened the market as he has been seen as a bright light and bit of a savour for what was a struggling country close to leaving the euro earlier this year. This is all before more data from Germany which is a survey of investor confidence, its forecasted to show a negative figure for a seventh-month in a row. All very important before their next meeting on Wed-Thur when we will hear more from them about growth forecasts and concerns that European interest rates could fall early next year.
All very concerning for the strength of the Euro that had been forecasted to strengthen in the run up to Christmas, this has now changed with a majority of investors expecting it to fall in the run up to 2013. So buyers keep riding and sellers move quickly would be my general thought. Of course timing a trade can make a big difference in itself. Yesterday rates moved by over 0.5% so timing only yesterday to sell €200,000 could have given you an extra £800. Here we can be your eyes and ears on the market providing a proactive service. These blogs have the aim to be informative and forward looking for your information but if you are looking to trade currency in the currency market and want to achieve the best price we can be a lot more useful. Contact us on the normal number or via email at hse@currencies.co.uk for more information.
I hope this continues to help you.
Thanks,
Steve Eakins
Elite trader
