Tag Archives: ecb

Will Sterling continue to rise against the Euro? (Tom Holian)

Sterling Euro exchange rates had an interesting end to the week ending close to the 2 month high that was hit during early Friday morning.

Yesterday European Central Bank Mario Draghi held a press conference concerning European monetary policy and has said that the Eurozone’s rocky recovery still remains reliant on the bank’s willingness to be open to further monetary easing.

He said ‘we cannot be sanguine over the outlook’ and there are a number of factors that could cause problems for the Euro ahead. Low inflation has continued to hamper growth on the continent and with the ECB due to meet again on 8th December we could see a further extension to their EUR80bn a month bond buying programme.

Also, on the continent in December the Italians will be holding a referendum which could see further changes in the Italian government which has had 65 governments in power since the World War. Italian banks also have a huge amount of bad debt and to me it is only a matter of time before this causes problems for the Euro.

However, it is not all plain sailing for Sterling as the UK is still uncertain as to when/if Article 50 can be triggered. According to Prime Minister Theresa May she is still confident that it will happen by March 2017 but with the High Court already ruling that the government will need parliamentary approval the government is now going to the Supreme Court in December to see if this can be overturned.

2016 has been a real year of change with Brexit, Trump and now an Italian referendum to prepare for and it is becoming clear that there is a voice of anti-establishment and a desire for political change all of which causes volatility for currency markets

Therefore, if you’re in the process of buying or selling a property abroad and worried about the ongoing volatility it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.

Having worked in the currency markets since 2003 I am confident that not only can I offer you bank beating exchange rates when buying or selling currency but also help you with the timing of your transfer.

If you need to make a currency transfer and would like further information about the process or a free quote then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

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Why has Sterling Gained Value This Week? (Matthew Vassallo)

Sterling has made further gains during Friday morning’s trading, with GBP/EUR now trading above 1.17. The Pound has performed well for most of the week, continuing the momentum gained from Donald Trump’s unexpected US election victory last week.

Trump’s surprise victory boosted market confidence in the UK economy, due to previous comments the property tycoon made regarding future trade deals with the UK. These comments were made despite our upcoming Brexit from the EU and this allowed the Pound to surge against the major currencies.

GBP/USD rates have now levelled out following comments made by FED chairlady Janet Yellen, who gave strong indications that they would be raising interest rates next month, a year after their last hike. If this does occur expect the Pound to weakened against the USD ahead of the triggering of Article 50 early next year, which will officially start the process of the UK leaving the EU.

GBP/EUR rates have improved to their best levels of the past 2 months and this positive move has intensified following UK Retail Sales figures released yesterday morning, which came out well above market expectation. When economic data come outside of the expected remit, we often see aggressive market swings and this can be the time for clients and investors alike to take advantage of an opportunity they did not expect. With European Central Bank (ECB) president also leaving the central bank open to extending their current monetary policy (QE) programme, the EUR looks to have hit its peak against the Pound in the short-term.

However, I would be wary about relying on the current trend continuing into next week, with the Autumn budget being delivered. Philip Hammond could deliver a blow to the Pound, as he is expected to announce that the UK faces a £100bn deficit due to our Brexit over the next 5 years.  This news is likely to knock confidence in our fragile economy, so today could be a prime opportunity for those clients holding Sterling.

If you have an upcoming GBP currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.

If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk

Sterling likely to continue to find support at its post-brexit lows, but stay vigilant (Joseph Wright)

We’ve had another week of trading with relatively thin ranges for Sterling exchange rates as economic news out of the UK has been thin, and the UK economy has remained out of the headlines for the first time in a while as issues elsewhere have dominated the headlines.

Seeing Sterling trade within a cent’s difference between the days highs and lows is currently the norm, although we are witnessing the Pound gradually decline back down to the 52 week lows which in most cases are also 3 to 5 year lows also (or 31 years in the case of the US Dollar).

Moving forward I’m expecting to see the Pound find support at these levels, with those of note being GBP/EUR (1.1456), GBP/USD (1.2777) and GBP/AUD (1.6712).

Those that have been following the currency markets will be aware that we’re currently very close to those 52 week lows, and whether they’re breached or not will offer us an indication of what’s likely to unfold in future.

It’s worth noting that economic data out of the UK hasn’t been disappointing recently, and an example of that was this mornings better than expected GDP Figures for the previous quarter. The expectation was for an increase of 0.6% whereas the figure actually came out at 0.7%. This boosted the Pound’s value briefly but that upward spike then fizzled out which can most likely be put down to profit taking by day traders.

It’s these short term patterns which lead me to believe the Pound will struggle as despite relatively good fundamentals the Pound is still gradually declining back to its lows.

If you want to be kept up to date on the markets and you would also like to ensure that you are getting the very top levels of exchange for an imminent currency transfer or even a longer term one then I can help you with this.

Not only do we give clients up to date market information but we all work for one of the largest and longest serving currency brokerages in the U.K, so even if you have dealt with your current broker or bank for a long time I would be surprised if I could not show you a saving over what they are offering you – You can email me (Joseph Wright) directly on jxw@currencies.co.uk and I will be more than happy to contact you personally to discuss the various options we have available to you.

Sterling Euro rates break past 1.20 owing to leadership change (Tom Holian)

Sterling exchange rates have risen dramatically during this week’s trading vs the Euro with the news that Theresa May will be taking over as Prime Minister as of later today.

The leadership race was previously set to take 9 weeks with May going up against Leadsom. However, Leadsom withdrew earlier this week and this meant May would take over.

The political stability has helped to strengthen the Pound vs the Euro and the US Dollar as it means that confidence has returned to the British economy and therefore Sterling exchange rates.

There is potential for further volatility tomorrow with the UK’s next interest rate decision.

Bank of England governor Mark Carney was very pro-remain and has warned that a vote to leave the European Union could be damaging for the UK.

He has also hinted that the UK could cut interest rates in the near future so any change tomorrow could see Sterling’s gains against the Euro quickly eroded.

However, I think it would be a bit too early to interfere with monetary policy just yet as with the political landscape a bit more certain I think any policy change is unnecessary.

Turning the focus to the Eurozone the Italian banks are struggling at the moment and the ECB will likely have to do something and this could cause the Euro to weaken if the problem is not dealt with swiftly.

Indeed, the total amount that international banks have lent to Italy is as much as €550bn.

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 teh@currencies.co.uk

I look forward to hearing from you.

Alternatively call me directly and ask for Tom Holian 0044-1494-787-478.

 

 

ECB Rate Decision to set the tone for Sterling Euro Rates (Tom Holian)

We are set for a busy day on the foreign exchange markets for Sterling vs Euro as the European Central Bank are due to meet later on today.

Sterling has fallen below 1.30 vs the single currency earlier this week after an opinion poll published by the Guardian showed that the Leave camp are leading the Brexit vote with 45% compared to the Remain camp with 42%.

It appears to be the sentiment surrounding the EU referendum on June 23rd which is determining how exchange rates need to move but today we could see further volatility when the European Central Bank announce their latest interest rate decision.

I don’t expect to see any change to monetary policy this month but any rhetoric hinting that we could be in for future interest rate cuts or further Quantitative Easing could see the Euro struggle with Sterling heading in an upwards direction.

Low inflation on the continent is one of the main reasons for the recent interventions and with the Greek crisis ongoing we could see Sterling creep back towards 1.30 later today.

ECB president Mario Draghi has been rather cautious in his recent public announcements and this is the reason why I think Sterling will improve vs the Euro.

Bank of England governor Mark Carney is also due to speak later this afternoon and if he again highlights a problem with the UK leaving the European Union this could sway sentiment back in the favour of the UK looking to Remain in the European Union.

If you need to make a currency transfer and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

Alternatively call me directly on 01494-787478 and I look forward to hearing from you.

 

 

ECB comments cause Euro weakness vs Sterling (Tom Holian)

Sterling Euro exchange rates have hit their highest level in 3 weeks to buy Euros following comments from ECB governing council member and head of Germany’s central bank Jens Wedimann.

An interview in one of Germany’s most widely read newspapers claimed that he was critical in the ECB’s recent monetary policy decisions and this has caused the Euro to weaken against the Pound.

This will clearly be a key topic for discussion when the ECB meets to discuss monetary policy and with the Greek crisis making headlines again we could see some problems for the Euro vs Sterling this week.

These comments have come as a real surprise and this has seen Euro weakness as it shows there is divide within the central bank rather than a unified stance.

Even with inflation data for the UK coming out much lower than expected which would typically result in Sterling weakness it appears as though these comments have gained more importance.

Eurozone inflation data is due out on the morning and recently the Eurozone economic data has been relatively good so if we see a rise we could see this current Euro weakness only last a very short period.

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 teh@currencies.co.uk

 

 

 

Today is the day!

The outlook for the pound is not very good and today will be further news about just what to expect for the UK and the pound in the coming months and weeks. Uncertainty over the Referendum and worries surrounding recent economic data will become more apparent in the coming weeks and any acknowledgement of the trends by the Bank of England should see sterling slide. The Quarterly Inflation Report is likely to carry the most weight but there is an outside chance of a call for an interest rate cut which would likely cause the pound to lose value.

If you need to buy or sell sterling in the next year the Referendum will have an impact on the pound well beyond the 23rd June. Expectations are for a Remain vote but only just. It is far too close to call and the current levels should not be easily dismissed as we might have a whole different ballgame in 7 weeks time. The best way to predict the future is to create it and we do offer a range of options to help you capitalise on any big swings that we might see.

For more information on getting the best exchange rates and keeping up to date with the latest trends please email me Jonathan on jmw@currencies.co.uk

What will happen to sterling after the 23rd June?

Much of the current talk is about the lead up to the Referendum but what can we expect after? Both the Remain and Leave vote will have big consequences for both buyers and sellers of the pound, what exactly can we expect?

Remain

The world will breathe a sign of relief as the fear and uncertainty of Brexit is removed from investors portfolio and the pound rockets.  The Brexit chatter that has dominated sterling exchange rates contributing to multi year lows against most currency pairings would be undone and we would see the pound spike. GBPEUR should rise above 1.30 possibly testing 1.40 with GBPUSD over 1.50 possibly reaching 1.60. GBPAUD would be over 2.00 and this would be presenting some excellent short term opportunities. There has been significant capital flight from the UK so far in 2016, remaining in the EU should reverse this.

The danger for sterling at this time might be that the Referendum which has been weighing on the UK economy has damaged confidence so much in the UK that poor economic data holds back the rates. Sterling could really struggle to make concrete gains, more of just a small bounce as the good news quickly wears off and the ongoing reality of the UK’s worrying financial position becomes apparent.

Currently the Remain camp are leading polls but it would be a mistake to place to much reliance on this. The last big political event to move sterling exchange rates was last year’s General Election which saw 5% movement on the rate in the weeks leading to the vote. The big swings were down to the polls predicting a hung parliament and the Tories winning a landslide! This Referendum is much more important which is why sterling has lost 10% this year already and we still have nearly 2 month to the vote.

For an overview of the market and how to take advantage of any market swings please email me Jonathan on jmw@currencies.co.uk

Leave

There are two Leave prospects I will one highlight here. One good and one bad! With so much unclear about what happens post Brexit I will examine the two most discussed outcomes. Whether a good or bad Brexit the initial reaction is likely to be a move lower as sterling rates come under pressure because of the unknown element of the Brexit. It should be pointed out in the event of a Brexit nothing will happen immediately, Article 50 of the Lisbon Treaty states that there will be a 2 year window which the new relationship will be negotiated.

Good Brexit – The UK quickly arrange new trade deals with the EU which help restore confidence. Brexiteers champion the UK as a financial capital and gateway to Europe which will quickly assert itself and handle itself outside of the EU. Free from the shackles of EU cost and regulation the UK would become a safe haven of foreign investment plucking the fruits of the global economy.. Such a scenario will not happen quickly but this is the ideal the Leave camp are pursuing and in theory it does seem workable. In practice though new negotiations with the EU might be tricky as the EU seek to deter any other countries from leaving.

Bad Brexit – As confidence plummets so does the value of the pound as the UK economy fails to realise its true potential and starts to struggle outside the comfort of the EU and the Single Market. Investors quickly withdraw sterling investments and seek to relocate to other financial centres, big businesses also follow suit and the UK economy starts to slow leading the Bank of England to consider cutting rates. This for me would lead to the kind of levels HSBC predicted of parity on GBPEUR and maybe 1.10 on GBPUSD.

In truth the real Brexit is likely to be someone in between these two outcomes. Sterling will I believe be volatile in the same way it has this year with reactions to good and bad political news. So just as President Obama’s input helped the Remain camp and Boris Johnson’s the Leave, any sign that the UK had struck a new trade deal should see the pound rise whilst worries over how any deals might be struck would hamper the rate. Article 50 is the key point, nothing would happen overnight giving plenty of time to negotiate the plans.

If you have a currency transaction to consider I would be interested to hear from you and offer some suggestions on possible tactics in the run up to and post the Referendum. Making plans in this market is trickier than usual which makes understanding all of your options and the market all the important. Please email me Jonathan Watson on jmw@currencies.co.uk for more information.

 

GBP exchange rates are in recovery mode, but for how long?

Those looking to sell Sterling in order to purchase other currencies have been dealt a good hand this week as Sterling continues to recover against a basket of other major currencies.

I think the rebound has come as a shock to many as current GBPEUR levels are the strongest they’ve been all month, whereas just a week or so ago the pair were trading at an almost two year low of 1.2320. Cable (GBPUSD) trading levels are also at their highest point of the month, with the pair trading at 1.4349 on the central level.

Personally I think these market movements have provided Sterling sellers with a great opportunity to take advantage of while it lasts, as I think this is just a slight uptight within a longer term downward trend for Sterling exchange rates, and I expect the downward pressure to return to the Pound as Britain’s political uncertainty continues to be a headline topic.

The boost to Sterling’s value has been due to increased risk sentiment within global markets which has also been reflected in stock markets, also the most recent polls coming out of the UK suggest that the ‘remain’ camp is in the lead and this news has been received well by investors. The UK Government has been working hard to sway voters into remaining in the EU, and much of the ‘remain’ camps recent support could be due to The Treasury’s claims that the UK economy could shrink by 6% by 2030 should we leave, costing the average household £4,300 per year.

I think it’s fair to say that we can expect a reverse of the Pound’s fortunes if the ‘Brexit’ polls suddenly show a change in the UK populations voting plans, and I’m expecting headwinds in the lead up to the referendum on the 23rd of June should the likes of Boris Johnson offer their support to the ‘leave’ camp once again, and I don’t expect Sterling exchange rates to be this favorable for much longer.

Important data to look out for today comes in the form of UK Retail Sales Figures as well as Public Sector Net Borrowing figures both for March and coming out at 9.30am, and then later today the ECB will announce it’s most recent Interest Rate Decision followed by comments from ECB President Mario Draghi. Each event has the potential to move currency markets and feel free to get in contact if you would like to discuss these data releases further.

If you are planning to use GBP to buy a foreign currency it may well be worth your time getting in contact with me (Joseph Wright) on jxw@currencies.co.uk in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible. Alternatively you can call me directly on 01494 725353.

All eyes on the European Central Bank this Thursday -Sterling exchange rates in form today (Daniel Wright)

Following another positive day for Sterling exchange rates against most major currencies, it does appear that the Pound is slowly coming back into fashion.

We had very little in terms of economic data out today however there does appear to be a feel good factor surrounding Sterling this week so far. With the Government hell bent on having the U.K remain in the EU I feel that this is what will end up happening and that the markets are starting to correct themselves a little accordingly.

All eyes will no doubt now be on head of the European Central Bank Mario Draghi on Thursday as we have the European Central Bank interest rate decision and press conference at 12:45pm and 13:30pm respectively.

THis release can impact all major currencies and last time we had the ECB press conference, GBP/EUR moved by over 4 cents throughout the afternoon so expect market volatility on Thursday. A 4 cent movement would mean buying €100,000 would cost you an extra £2400 or get £2400 cheaper if it goes the right way for you.

It is highly important to have a proactive and efficient currency broker on your side during releases such as this and we can help you on that front. We have a range of contract options available including a limit order where you can set a particular rate you wish to buy at, and if you do get a sudden spike then it gets bought automatically.

If you have the need to buy or indeed sell Sterling for your business, due to a property purchase/sale or for any other reason then it is important to have a proactive broker on your side and one that can get you the very top levels of exchange – It is very easy to settle for second best in this market but it is key to realise that even the slightest improvement in a rate of exchange can save you a huge sum of money.

If you would like to have a brief discussion with me (Daniel Wright) as to how I will be able to assist you with any pending currency exchange then feel free to email me directly on djw@currencies.co.uk  and I will be more than happy to get in touch with you personally. We can cater for people inside our outside of the U.K and carry out bank to bank transfers.