Tag Archives: eurusd
Gold Prices and Exchange Rates
Gold prices have continued to fall overnight to their biggest loss seen in two days in over 30 years. As Cyprus has announced it may have to sell off part of their gold reserves to help fund its bailout we could see further falls throughout the day. Weak Chinese GDP figures also helped to push gold prices lower. As risk appetite subsides we have seen huge gains for Sterling against commodity based currencies including AUD, NZD & ZAR all of which has increased by almost 2% since early trading yesterday morning.
In particular GBPAUD exchange rates have continued to rise as the Reserve Bank of Australia minutes were published this morning showing that they will keep interest rates on hold at the moment with a view to cut further if necessary. Indeed, if China’s economy slows down this could see the Aussie Dollar come under pressure at Australia sells approximately 37% of its mineral exports to China. If you have a requirement to buy any of the three currencies AUD, NZD or ZAR then email me directly for a free quote Tom Holian teh@currencies.co.uk
With the focus now again on Europe and in particular Greece we could see a bit of volatility this week on GBPEUR rates. Athens has agreed to cut 15,000 jobs in Greece by the end of 2014 as part of its bailout package as it awaits the release of 8.8bn Euros. Currently Greek debt is almost 160% of the entire nation’s GDP and the International Monetary Fund says it must cut to 120% to be sustainable. Since 2010 Greece has received €270bn in bailouts.
At 2pm today Mario Draghi gives a press conference of how the ECB is currently viewing the European economy and if anything needs to be changed. Draghi’s comments this afternoon could cause volatility on both EURUSD and GBPEUR exchange rates. If you want to receive a free quote email me Tom Holian teh@currencies.co.uk
Where now for the pound? GBP/EUR, GBP/USD, GBP/AUD, NZD and ZAR exchange rate forecast (Mike Vaughan)
Bank of England and ECB Interest rates decision dominate this week’s data
Sterling exchange rates have continued their recent poor trend against the Euro falling close to a one month low, and very close to the lowest levels seen since June. With the Bank of England and European Central Bank both releasing
their latest interest rate decisions at 12:00 and 12:45 respectively on Thursday, and George Osborne releasing his ‘Autumn Statement’ on Wednesday, those with an interest GBP/EUR should keep in close contact with their currency broker as exchange rates can be extremely volatile in the run up and following the interest rate decision.
Historically central banks will often decide against implementingany major policies in the run up to Christmas, however by keeping in regularcontact with your broker our aim is to help our clients time their exchange by keeping them up to date with market trends. It can make a huge difference on the final cost of the currency purchase, with a £200k money transfer buying €5,100 less Euros than this time last month. Should you have anupcoming currency exchange whether this be a property completion, businesstransaction, inheritance to name just a few, then please contact the office on free phone 01494 787478 to get the best deal on your exchange.
Where now for the pound?
Mervyn King (BofE Governor) and the Monetary Policy Committee (MPC) are likely to hold the UK interest rate at 0.5% and decide against injecting further funds into the money supply, through Quantitative Easing, at this week’s interest rate meeting. As a result we may see the pound pick up back towards the 1.24 level against the Euro and move towards 1.61 against the dollar; however I would suggest Euro and US dollar buyers err on the side of caution as I believe heading into Q1 of 2013 we are likely to see more QE from the UK and this will keep pressure on the pound. As a result I would expect to see GBP/EUR heading towards 1.22 and GBP/USD to move back to 1.56/57 in the coming months.
GBP/USD above 1.60, is this a good time to buy?
The short answer to this, in my opinion, is a firm yes. These are the best levels against the US dollar in over a month and have been buoyed by the ongoing ‘fiscal cliff’ demands damaging the dollar. A move away from the ‘safe haven’ of the USD was also seen following an announcement that Spain formally requested €37bn to recapitalise its four biggest struggling lenders – Bankia, Catalunya Bank, NCG Banco and Banco deValencia. This moved EUR/USD and GBP/USD to over 1 month highs and has created an unexpected opportunity for dollar buyers.
Sterling, as I have previous mentioned, could well come under pressure later this week with the interest rate meeting scheduled for Thursday and Finance Minister George Osborne giving his “autumn statement” to parliament later this
week (Wednesday) after saying on Sunday that Britain would take longer to deal with its debt pile and that a recovery will be sluggish. Economists are speculating that the independent Office for Budget Responsibility may lower growth forecasts and also predict a target to have public sector debt falling as a proportion of national output by 2015/16 will be missed. This could endanger Britain’s triple-A credit rating and the current levels seen against the greenback could re-trace below 1.60 and beyond.
Global confidence and risk appetite
Now Spain has formerly requested a bailout this would well bring a much need boost in investor confidence and hence risk appetite. This leaves a number of currencies sitting on a knife edge. In times of market confidence riskier currencies such as the AUD, NZD and ZAR in particular will benefit and the moves can be significant. Should you be buying AUD, NZD or ZAR anytime it may prove prudent to keep in contact with your account manager to avoid any nasty surprises and an increase in risk appetite is likely to make thesecurrencies more expensive to buy.
To discuss the market trends in more detail then please contact 01494 787478 and ask for Mike. Alternatively please email mgv@currencies.co.uk and I will happily run trough my forecasts in more detail and see how I can help you achieve the best exchange rate on the market.
Getting the best out of your foreign exchange. GBP/EUR, GBP/USD, GBP/AUD, GBP/NZD and EUR/USD forecast (Mike Vaughan)
Sterling exchange rates recovered a fraction yesterday after falling below the 1.23 mark against the pound for the first time since the beginning of June on Tuesday. Positivity for the pound was seen following far better retail sales figures for September after they rose 0.6% on the month, beating forecasts for a 0.4% increase.
Recently the trend for GBP/EUR has been heavily against the pound since the four year high of 1.288 in July. In the 3 months since this the pound has lost nearly4.5% – this means a high low difference in this period on a £200k transfer of over €11,700 proving how volatile the markets are at the moment. Today the volatility could continue and anyone with a focus on sterling should watch out for public sector net borrowing figuresthis morning at 09:30.
Best exchange rates for GBP/EUR
Current market movements for the Euro to me represent a good opportunity, particularly if you are selling Euros. I personally believe the market has priced in expectations for further quantitative easing in the UK and I feel the GBP/EUR range will struggle to breach the 1.22 mark. My general feeling for the Euro is that should Spain request a bailout, and I believe they will, this could lead to some further short term support for the Euro as it will bring much needed confidence to the Euro zone; however I feel the Euro is starting to reach its peak. Longer term I believe this market confidence is unsustainable and believe it will only be a matter of time before problems in Europe resurface and ultimately pressure will be placed back on the Euro. For this reason I would
expect GBP/EUR to move back towards 1.25 by Christmas.
Where now for the US dollar?
GBP/USD rates are back above 1.61 just two cents from the year high of 1.63 seen just one month ago. I personally feel the dollar is a good buy at this price as I believe the pound is likely to come under continued pressure as we head towards November’s Bank of England meeting. Personally I can see further extensions of quantitative easing something that will keep the pound under pressure and I see the market remaining relatively stable around the 1.60 and little upside for
the pound.
As for EUR/USD – I believe any announcement from Spain will be the major influence for this pair, however current prices at 1.31 are the strongest since May and some 9% stronger than rates at the end of July. Should you have a need to convert Euros to dollars and you would like to take advantage of these favourable rates please contact your broker.
AUD, NZD and ZAR
Recently trends for these three currencies have been very much in Sterling’s favour. We hit a 3 month high against the AUD and NZD earlier in the month with both showing gains in the regions of 6% since the lows of August. Substantial gains have also been seen against the ZAR with rates at the highest level since March 2009 last week. Rates have fallen nearly 3% since, however are still some 5.5% better than early August.
Market conditions for these three currencies are particularly volatile at the moment as they are heavily influenced by commodity prices and levels of investor confidence. With investor confidence relatively low, clients have been selling riskier assets (including the AUD, NZD and ZAR) to look for safer options. Should Spain request a bailout I believe this will give investors a much needed boost in confidence levels and also risk appetite. As a result you could see a drive towards these three currencies due to the higher yields they offer. An increase in demand means the more expensive a product will become and should demand increase for the AUD, NZD and ZAR then anyone buying these currencies in the weeks to come may have a nasty surprise. To avoid this situation and to take advantage of the recent attractive prices or to discuss the market in more detail please call 01494 787478 or email Mike at mgv@currencies.co.uk
What now for the Euro? The New Democracy Party (pro Austerity) is in pole position to lead the country forward
It is late on Sunday night here in the UK, there would have been many of you looking on at events in Greece this evening wondering what to make of what has happened in Athens and what it all means for your currency exchange and the Euro going forward from here.
With more than half of Sunday’s votes counted, the centre-right New Democracy Party had 30.1 per cent of the vote in Greece’s second general election in six weeks. That put it about 3.5 per cent ahead of Syriza, a left-wing party that intended to pull out of Greece’s agreements with the EU regarding the country’s debts and drastic spending cuts.
“Greeks have voted to remain in the Euro-zone,” New Democracy leader Antonis Samaris said late Sunday in a televised address. “There will be no doubt about the position of Greece in Europe. There will be no further adventures. This is an important moment for Greece and the rest of Europe. Greece will honour its obligations.”
So if things go to plan Greece will remain in the Euro-zone after Sunday’s parliamentary elections appeared to give a pro-euro, pro-bailout party enough seats in parliament to create a coalition to deal with the southern European nation’s crippling debts.
The result should provide a measure of relief to the European Union and help calm volatile international markets, although the continent’s debt crisis is likely to continue and possibly worsen in the coming months.
I feel going forward that we will see a very brief spike for the Euro over the next day or so. However if you are hoping for the Euro to gain 5-6% on the back of these elections I think you may be disappointed.
The EU and the International Monetary Fund want Greece to carry out the terms of a stiff austerity program that it agreed to in return for billions of Euros in emergency financial assistance. While stating that it would honour this commitment, New Democracy also has indicated its wants the process slowed down. German Chancellor Angela Merkel though indicated she was prepared to consider giving Greece more time to gets its house in order, although she has refused to discuss watering down the agreement.
There are still many questions to be answered and this will leave much uncertainty for global financial markets. The uncertainty is what should make you very cautious over the coming weeks if you have a Euro exchange to make. If you are buying or selling the Euro and if you are at trading levels that you feel are acceptable I would recommend forward buying or trading on spot to make sure you do not get caught out by volatile exchange rate fluctuations after all it is still very hard to call what lays around the corner for the EURO.
If you have a currency exchange to buy or sell any of the major currencies events in Europe will have an effect on your currency conversion. If you would like to speak with me about your own requirement I will be happy to discuss what the implications of Europe can have on your exchange. We offer a very bespoke and personal service while achieving significantly better rates than that of your high street bank. Please do email me at bma@currencies.co.uk and I will contact you to discuss the options that are available to you.
Ben Amrany
Crucial couple of days for anyone looking to make a currency exchange
With the global economy at practically standstill, I believe European events in the next few days will be key to shaping the short and medium term movements of exchange rates not just on the Euro, but also the Pound, the Dollar and all majors. Two key decisions today could more specifically also help move GBPEUR, GBPUSD and EURUSD. An exceptionally volatile few months have cooled slightly this week, but I feel things could be pushed one way or another depending on the outcome of the European summits. If you have any transfers to make it is well worth considering the impact of these events. As specialist currency brokers we can help with tools designed to protect your exchange rate. Read on to find out more about what I think will happen and how we can help limit your exposure in these uncertain times.
12.00 BoE Interest Rate Decision – The Bank of England will today announce the outcome of their latest policy meeting. Whilst no change in interest rates is expected we could well see a further round of QE announced which could cause sterling weakness. If not this month, then it is likely in the New Year. Anyone looking to sell the Pound in the New Year should really be aware of the impact this could have, it may mean your transfer is much more expensive in the New Year than now. We can book current levels forward with a forward contract. I have really seen a rise in this type of contract this week, particularly on GBPEUR as we are so close to the 9 month high. Speak to us to find out more.
12.45 ECB Interest Rate Decision – The European Central Bank will then announce their decision. It is likely we will see an interest rate cut today which could well lead to Euro weakness. This could provide the perfect buying Euros opportunity, particularly if the outcome of the summit is Euro strength (and no QE is announced in the UK!). The markets may however have already priced in a cut in rates so any movement may be fairly limited.
Movement around this time is likely to be quite volatile as investors try to second guess decisions. If you have a transfer to make and would like to be kept up to date at this time speak to me today on jmw@currencies.co.uk quoting PSF and I can keep you posted.
We also have the ongoing events in Europe with European leaders meeting for another ‘key’ summit. This session could well go on into the weekend and I think the general theme on the markets will be in one of two directions:
Signs the Euro crisis will be tackled – If the markets receive well what the leaders are discussing we should see the Euro strengthen. Signs that the crisis is being tackled should also give rise to US Dollar weakness as investors move out to other riskier assets. We should also see a strengthening of the Kiwi, Rand, Aussie and also the Canadian Dollar. Anyone looking to sell one of these currencies to buy sterling may well wish to take advantage of any spikes against the pound at this time.
Signs the Euro crisis is not being tackled – If the markets do not receive well events in Europe a reverse of the above will likely happen. We will probably see the Euro weaken and the US Dollar stregthen as investors fears over the global economy cause a flight to safety. There will also be a knock on effect on the currencies mentioned above which will weaken as investors move to other assests like the Dollar.
The last six months have been a very difficult time for anyone making currency exchanges. The pound has rallied and fallen against all the majors as global events cause shock and panic. One of the major drivers on all exchange rates has been the Euro crisis and the possibility this will be tackled or not should cause a move in one direction or the other as stated above.
Of course there are no hard fast rules on the currency markets and anything can happen! If you have an upcoming transfer, even months ahead it may be of interest to speak to us to find out all your options. As well as booking today’s rates forward for future purchase we can also put orders into the market to trade at certain levels so your exchange doesn’t become more expensive than you had bargained for. Lookout for further updates and analysis on the site today and if you would like any specific information relating to the content on the site or your personal transfers feel free to e-mail me directly on jmw@currencies.co.uk quoting PSF.
UK political pressure fails to help sterling exchange rates
The chancellor George Osborne and the Prime minister have both suggested that they do not want to see the UK contribute any more money to the next Greek bailout.
The Eurozone is in grave danger according to many commentators and there is widespread speculation that the problems in Greece may be the downfall of the single currency. We are also hearing rumours that the EU were aware that Greece had lied about its key economic indications in order to get into the Euro in the first place. This is further undermining the EU and highlighting the shortfall of a single currency for such a large and diverse economic area.Despite what appears to be a stonewall and fundamental issue for the euro, the single currency has not lost a huge amount of ground as a result.
EUR USD has fallen a modest 3% since February, while EUR GBP has actually gained 4.4% since February, somewhat surprising consider the situation the euro is in. The reason for this is that investors have chosen to focus on interest rate outlooks, and as the UK has not hiked rates while the EU has, the single currency has made gains over sterling.
The next key development for Greece could be this evening when the next vote for Austerity measures and the bailout take place. This could well cause some Euro strength, if a package is agreed. Despite UK politicians claiming we will not make a contribution, we have to pay £1billion to the next package from the IMF as it has already been agreed. not great news considering our own budget deficit and economic problems.
