Tag Archives: GBPEUR exchange rates

Sterling continues its recovery as UK growth estimates meet expectations, but will the recovery continue? (Joseph Wright)

It’s been quite a bullish week for the Pound this week as economic data releases have impressed and Sterling has gained a good few cents vs many other major currency pairs.

Towards the end of last week the UK’s Retail Sales Figures for July were better than expected, and this week the weak Pound has resulted in the UK’s Manufacturing Output reaching a 2 year high as people overseas are keen to pick up goods at low prices. These positive sets of data, coupled with today’s Gross Domestic Product estimates coming out as expected,  have boosted sentiment towards the Pound as this has been reflected within currency markets as the Pound has gained almost 3 cents vs the US Dollar, and almost 2 cents vs the Euro.

Those that plan to convert their Sterling into a foreign currency at a higher rate will of course be hoping that the Pound continues to climb, and whilst I think it may do, there are a number of risks to holding off so it may be an idea to make at least part of that trade at current levels with the hope of averaging up in future. This is an approach many of our clients are currently taking and we’re here to help by keeping them updated with what’s going on in the marketplace.

Those who plan to purchase Pounds, by converting their Euros,US Dollars or Aussie Dollars for example, may wish to get in contact and check whether our rates are better than your current providers/banks as whilst current levels are particularly favourable, a return to risky attitudes from investors is likely to drive up Sterling’s value, especially if economic data out of the UK continues to surprisingly impress.

Major economic announcements that could sway markets next week are Thursday’s Manufacturing Data which is expected to show an improvement, and then next Friday will be Non-Farm Payroll and Unemployment Data out of the US. If you would like to discuss these and how they can affect markets, do get in touch and I’ll be happy to explain.

If you would like to discuss an upcoming currency requirement you’re planning, in terms of the timings and getting the best rate of exchange available, feel free to contact me 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. You can also call in directly to reception and ask for Joe on 01494 787 478.

Pound rises as expected to begin the week – will buying Euro and Dollar rates continue to improve? (Joshua Privett)

As my article on Sunday mentioned, the Pound was expected to perform well this morning and did not disappoint, with gains seen against all major currencies – in particular for buying Euros and Dollars.

Speculators on Friday afternoon have been pulling the floor from under the Pound as they scramble for a stable currency to store their profits in heading into the weekend. Of course, the Pound has bot been high on their list of stable currencies and as a consequence the severe fall on demand for Sterling sees its value plummet.

However, similarly like clockwork we’re seeing GBP/EUR and GBP/USD levels rise as markets re-open on the following Monday as the vast majority scramble to buy Pounds due to their sudden cheapness. In this period of the week rates have rarely been so predictable.

Moving forward however my article did note some potential red flag events – particularly for Euro buyers.

Firstly, news concerning business confidence figures in the Eurozone are to be released tomorrow morning. As the Eurozone has essentially vacuumed up most of the foreign investment the UK has lost in the run up to Brexit and following the Leave result in the vote, the figures are expected to be very positive for the third consecutive month. It’s hardly surprising given that credit is so cheap and their foreign investment is up 300% on the same time last year.

With a fresh bout of Euro strength expected to come tomorrow at 10am, Euro buyers may be wise to seize some of the gains made today first thing in the morning to avoid what could be a difficult week for the Pound – especially given that underwhelming UK growth figures are expected to be released this Friday.

USD buyers however may be presented with some opportunities in the short-term, as tomorrow afternoon US housing market figures are forecasted to show a contraction – a likely result of their recent rise in interest rates. Expect a cheapening of the Dollar tomorrow afternoon. But again with UK growth figures on Friday we may simply be subjected to a small window of opportunity.

With this in mind I recommend that anyone with an upcoming Euro or Dollar purchase should contact me on jjp@currencies.co.uk or by filling out the form below to discuss your currency requirement and develop a plan of action to truly maximise your return.

I have never had an issue beating the rates of exchange offered elsewhere, and I endeavor to produce a proactive service for my customers to make sure they are kept informed and up-to-date with market movements and expectations, rather than lagging behind.

As our regular readers will now full well, rates of exchange on any particular day can be fixed to allow purchasers to pre-book their currency for a later date, allowing any upcoming pitfalls to be avoided.

Will the UK and the pound enjoy an Olympic boost?

The UK is basking in Olympic glory at present and shrugging off those Brexit blues. For now consumers are spending and the economy has a healthy unemployment picture. This good news is very much welcome and reminds us all of the power of hard work, determination and training. The Olympics will have helped raised the UK’s profile internationally and could help boost tourism particularly with the pound at such low levels. Measuring the true impact of all of this in an economic sense is actually very difficult and in my opinion it would be misplaced to be overly complacent about the future direction for the pound.

An important point to make is that whilst the weak pound is good for exports it is not overall a benefit for the UK since the UK as a net importer buys more from overseas than it sells. That means because we spend more overseas when the currency is weak it is overall a bad thing. That is not to say a weak pound doesn’t present opportunities, many businesses selling overseas will be enjoying the weaker pound and there have been some headline grabbing stories of UK companies being purchased at a discount because of the weak pound.

The key news for me is the business surveys since the Brexit vote, these are the key indicators because ultimately it is business that drives the economy forward. Business is the key barometer of what will happen next. Consumers will not keep spending when the weather turns and they are worried about their job, it will be business’ reaction to the the economy which will shape what happens next. With hiring down and confidence lower I can see the pound coming under further pressure in the coming weeks and month, any clients buying a foreign currency with the pound should not be overly complacent.

If you are buying or selling the pound exchange rates remain volatile and there are various upcoming events to help determine the next leg of direction on the pound. Brexit news is unlikely to develop quickly, indeed we are probably going to need to wait until 2017 to learn just what is happening next. In this time as confidence is sapped, so too sterling should fall.

If you have a transfer to consider making some firm plans in advance is sensible. If you are considering buying or selling the pound then understanding all of your options is key to mitigating the uncertainty. To learn more please fill in the form below or if you prefer a direct contact with me please email jmw@currencies.co.uk

Pound takes late tumble on Friday – how will buying Euro and Dollar rates fare next week? (Joshua Privett)

Like clockwork, particularly since the middle of July, the Pound has taken a heavy hit as we enter the weekend, leaving Euro and Dollar buyers concerned about how markets may open to begin the following week.

Speculators are the principle cause. Traders at high street institutions, who move sums large enough to change the interbank buying level, have to choose a stable currency to store their profits in over the weekend.

What has changed in the post-Brexit vote landscape is that the Pound is very low on the list of currencies which traders are comfortable enough to predominantely hold their capital in. When demand for Sterling drops dramatically during this period so does its buying power, creating greater expense for those with a Euro or Dollar buying requirement.

However, the comforting news for anyone considering buying a foreign currency is that a small recovery is normally seen by the opening of European markets on Monday morning when normal activity resumes.

My previous article for this website on Friday mentionned that UK inflation data will be released on Tuesday, however, these report hearing have now been delayed. Now much of buying Euro and Dollar rates will be governed by events in Europe and the US.

Eurozone data on Tuesday showing business confidence in the manufacturing and service sectors should be seen as a red flag for anyone with a Euro requirement. The Eurozone seems to have attracted much of the investment the UK has lost during this 2016 of uncertainty, which has increased over 320% compared to this time last year. Euro strength is quite obviously expected that day.

The same day we have US housing market figures to released to markets, focused on new home sales, which are expected to show a contraction from the previous month. This will come out at 3pm UK time so Dollar buyers with a short-term requirement should keep this firmly in their dairy.

Now that we are in the final two weeks of the month where economic data is relatively scarce, much of the market will be government not by national performance, but by the inclinations of high street speculators.

As such the next two weeks will see a premium being put on being able to move relatively quickly, as opportunities may only be around for an hour or so at a time, and are difficult to judge when they may emerge.

The onset of September will bring fresh data for August’s performance, and the UK is expected to have a similarly tough time of it as it did at the beginning of this month.

With this in mind I recommend that anyone with an upcoming Euro or Dollar purchase should contact me over the weekend whilst markets are closed on jjp@currencies.co.uk or by filling out the form below to discuss your currency requirement and develop a plan of action to truly maximise your return.

I have never had an issue beating the rates of exchange offered elsewhere, and I offer a proactive service to my customers to make sure they are informed with the most up to date information and expectations in order to make an informed decision.

If you are concerned that the beginning of September may bring similar tumbles on Euro or Dollar buying rates as they did in August, you can also fix the rate as it is on the day to avoid any drops before a future, planned transfer.

 

Speculators undercut the Pound during Friday trading once more (Joshua Privett)

Once more on what seems to be a very regular pattern since the Referendum now, traders at high street institutions are pulling the floor from under the Pound as we enter the weekend.

Buying Euro and Dollar rates suffered suddenly and heavily as a result, with GBP/EUR losing 0.7 cents at the time of writing this post, and GBP/USD  a full cent.

This phenomenon of profit taking is a practice established to protect the capital gains made by speculators during the weekend for the Friday afternoon and Monday morning periods when they are out of the office for the weekend but when markets continue to operate. A dominant currency is chosen to keep their funds in for this period when they have no control over their capital.

This currency has to be stable and be able to hold value. Since the referendum vote, this Pound has been in very low demand during this period. With low demand becomes a loss of value.

Next week will bring some interesting turns on what we have come to expect with UK data releases. UK inflation is the next key data release on Tuesday for the UK economy and has normally been a red flag for anyone considering buying a foreign currency. However, for the first time since the beginning of 2016 UK inflation was in the green this month – a by-product of healthier oil prices and rising importing costs from a weak Pound.

This gives the image to the markets that the UK is still spending highly despite the dampening effect of the leave vote. These inflation report hearings are expected to reflect this improved increase towards the Bank of England’s target for the economy at 2% inflation, compared to 0.6% currently.

As such Euro and Dollar sellers may wish to take the opportunity of this dip in their favour quite soon into Monday morning, and you can contact me over the weekend and I will reply as soon as possible to discuss how to fix the rate for a Sterling purchase based on these current favourable numbers for a future transfer.

Euro and Dollar buyers however, may see some improvements as the week progresses. and I offer a proactive service to make sure my customers are made aware of any potentially favourable movements or change in expectations which you should be made aware of to budget accordingly.

You can contact me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your currency return. I have never had an issue beating the rates of exchange offered elsewhere, so a brief conversation could save you thousands. Alternatively, you can fill out the form below.

What do we really think is going to happen next for the pound?

Unfortunately all the positive thinking in the world will not help move an exchange rate. You can try all manner of methods to try and alter your situation but unfortunately the market is impersonal and does not react for these reasons. Looking at the economic reality sterling has had a slightly better week although in my opinion this is against the grain of a continuing negative decline in the value of sterling. Let us look at the positive news so far this week which has helped the pound, is it indicative of a big rebound in the value of the pound, is it a sign that Brexit is nothing to worry about and everything is going to be okay? Let us drill down into the detail of the figures and make an assessment if two pieces of good news this week are going to be enough to turn the tide on a raft of negative indicators.

  • Positive Unemployment data. The data released only covered the period up until the vote. The claimant count reduction (people claiming benefits) fell in July but this is not something I would be drawing too much positivity for the UK from. We won’t know the full impact on Unemployment from the Brexit until October or even the New Year as the data is always 3 months behind. Plus it takes many months for workers to leave jobs or lay offs to occur so it might not be until well into 2017 until we know the true Unemployment picture. The fact remains all the economic data is showing big declines in business, this will cause problems down the line.
  • Excellent Retail Sales Figures. The data for July showed a huge boost in Retail activity much better than June. What makes Brits go out and spend money? Sunshine! The excellent weather which on some days was 9 degrees higher than the average for that period saw lots of money on extra food, drink and clothes as people socialised more and went out more. Can we rely on sunshine to drive the UK recovery? Well I wouldn’t be banking on it….

It is only 2 months since the vote and I believe there are still many skeletons finding their way into the cupboards of the UK economy. Misplaced positivity can be a very dangerous thing. I prefer a careful, measured and balanced assessment of the facts. The pound has risen this week and may yet spike a little further following some very tough weeks. But with so little really known about the political and economic impact following Brexit I feel that sterling will fall further in the remaining months of 2016. If you are buying or selling the pound and have a transfer to consider please fill in the form below and I will contact you to discuss further the market and your options. Alternatively you can email me on jmw@currencies.co.uk for a more personal service. I have nearly ten years experience working as a specialist currency broker for one of the UK’s largest independent currency brokerages and would be delighted to hear from you and offer some assistance to help you get the most for your money.

Buying Euro and Dollar rates hounded once more on Friday (Joshua Privett)

Friday presented itself as a relatively stable day until about 3 in the afternoon for anyone considering buying Euros or any of the various Dollars. However, unlike many who were winding down for the weekend, the currency markets provided a last minute spark in the closing hours of the day.

The Pound suddenly tumbled. Not just against the Euro, and various Dollars, but even the less heavily traded currencies such as the Rupee and Rand. It was severe and prolonged until the currency markets finally closed for the weekend and the Pound gained some respite.

There was no sudden news released to justify this, so Euro and Dollar buyers should not be worried that this is a trend which is likely to continue as markets open next week.

It is important to always remember that it is speculators who govern the currency markets. The traders at high street banks who often move 8-9 figure sums as part of their daily routine are the drivers who move the average buying and selling levels through their prolific activity. This is what changes the interbank level which many of our regular readers with an upcoming requirement with be monitoring on their screen.

On Fridays, and even more so on the last day of each month, you tend to see the phenomenon of profit taking. These speculators who had been buying and selling Euros and Dollars throughout the week must decide which currency to predominantly allocate their profits by close of play on Friday. Unfortunately, due to the recent lack of confidence in the Pound post-Brexit, it is very low on the list of stable currencies to consolidate those profits.

As such the sudden sell-off of Pounds on Friday contributed to a sudden drop in its value against all major currencies, with GBP/EUR, GBP/USD, and GBP/AUD all falling to their lowest levels since the first week of July.

With normal activity to begin next week I am expecting a recovery for Euro and Dollar buyers as the Pound becomes an attractive buying opportunity once more due to its cheap status. With increase demand its value should see a boost against its counterparts.

However, due to the release on Tuesday morning of UK inflation data, a traditionally poor performer and likely to be exaggerated in this post-Brexit vote landscape, this is likely to be short-lived.

As such Monday may present some more tempting opportunities than what was available late on Friday afternoon. I strongly recommend that anyone with a Dollar or Euro buying requirement should contact me on jjp@currencies.co.uk to discuss how best to make the most of any such opportunities which emerge.

These opportunties may even be substantial due to the bank holiday in the Eurozone for Assumption Day, and the lack of activity in their own banks during the occassion.

You can also fill out the form below to be immediately contacted once markets open on Monday morning to discuss how best to make the most of the day’s movements for an upcoming requirement of yours.

You can also fix rates of exchange for future transfers, so a brief conversation could save you thousands on your transfer, and I have never had an issue beating the rates of exchange offered elsewhere.

Euro and Dollar sellers can also get in contact to discuss how best to maximse their Sterling return.

Why is the Pound down against most other major currencies, and will this downtrend continue? (Joseph Wright)

In the current market conditions we’re seeing Sterling decline at almost a daily basis, and although the drops haven’t been particularly steep they’re adding up with the central level for cable (GBP/USD) now below 1.30, and GBP/EUR now trading very much within the lower end of it’s current trading channel of 1.16 – 1.20, a trading channel I’ve written about before on this website.

There were the obvious major downward spikes in the immediate aftermath of the ‘Brexit’ vote, immediately making the purchase of all major currencies more expensive for Sterling sellers, but this latest downtrend seems to have been triggered by the Bank of England’s (BoE) most recent decisions to cut Interest Rates in the UK down to 0.25% (the first cut since 2009), and to ramp up the level of Quantitative Easing to levels much higher than expected in order to subdue the negative effects of the Brexit on the UK’s economy.

Those hoping for Sterling strength in the short to medium term may find themselves disappointed as the BoE’s Quantitative Easing program of buying substantial amounts of Gilts (government backed bonds) has been in the headlines this week after running into trouble for the first time since QE programs begun back in 2009. The BoE had struggled to purchase the entire amount of £1.17bn as not enough sellers were willing to offload their gilts, and this caused additional Sterling weakness.

The BoE will be giving a speech at 9am this morning regarding this hiccup, and I think that should this issue arise again we could see further Sterling weakness.

I’m also expecting currency markets to react quickly to UK based economic data that’s released out of the UK in it’s post-brexit environment. I think that Sterling sellers should keep an eye on these figures as they could be the catalyst for further Sterling weakness, and anyone hoping to remove the risk of further Sterling falls may wish to consider making their conversion sooner as opposed to later in case this materialises.

If you wish to discuss your upcoming currency transaction involving the Pound, it’s worth your time getting in contact with me on the form below or on jxw@currencies.co.uk directly 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. You can also call in and ask reception for Joe on 01494 787 478.

Buying Euro and Dollar rates to be decided abroad today (Joshua Privett)

Barring any curve-balls from the developing Brexit situation, those looking to buy Euros and/or Dollars will have to sit back and see what happens abroad to see how rates will be effected. Frankly, with the spotlight taken off the UK and it’s negative economic atmosphere, we may see some respite.

Inflation data for key individual Eurozone economies will be released, as well as the unemployment rate for some of the more struggling economies, such as Portugal.

We have already seen French industrial output figures showing a contraction for the third month in a row, despite the lifting of prominent striking taking place a few months ago.

Inflation has been a pain-point for the Eurozone for a number of years, and was the main reason why the Eurozone dropped their interest rates to 0% in a bid to encourage the healthier economic activity which comes from increased spending. Due to this I have little doubt that this data will continue to reflect poorly on the Eurozone as a whole, the only question is whether this is still old news? Will markets bat an eyelid at the confirmation of what was already known?

What may cause markets to move is that this mornings results will be used as an indication for Friday’s release of Eurozone GDP during the second Quarter of this year – the first such look at this data. This is a major market mover, and will also be the first look at how the run-up to the Brexit vote affected the Eurozone as well.

It is easy to forget just how much the news of the Brexit has affected the value of the Euro as well. There is a reason why GBP/EUR levels sit at 3 year lows whilst buying Dollar levels have collapsed to 31 year lows. This data will certainly be illuminating, and seems more likely than not to be assisting Eurozone buyers.

Little data of note will be released concerning the value of the US Dollar today, but anyone with a New Zealand Dollar requirement is set to see some very attractive buying levels tomorrow, with the heavy expectation of a rate cut there overnight.

I strongly recommend that anyone with a buying Euro or Dollar requirement should contact me on jjp@currencies.co.uk to discuss a strategy for your transfer in order to maximise your currency return.

Whilst the heaviest movements are not expected until the end of the week, there are a number of options to be explored with a currency exchange specialist ahead of such an event to allow you to ensure any tempting opportunities are seized.

I have never had an issue beating the rates of exchange offered elsewhere, and these current buying levels can be fixed in place for any considering buying foreign currency in the near future and are worried about potential falls later in the month, and as we enter September,

Euro and Dollar sellers can also get in contact to discuss any upcoming requirements – whether that be business, or expected revenues from overseas property sales – and a brief conversation could save you thousands on your transfer. Please feel free to call 01494 787 478, and ask the reception team for Joshua to be put through to my line.

Or you can fill in the form below and I will get in touch with you as soon as possible.

Has the pound bottomed out yet?

Yesterday’s news of the interest rate cut was not wholly unexpected but the measures including 50bn of QE and a new ‘Term Funding Scheme’ were not priced in helping contribute to GBP weakness. So is this the end or the beginning of measures by the Bank of England and where will sterling head next?

Even in yesterday’s meeting the BoE were signalling further cuts and this indicates to me sterling could have further to fall. The pound is essentially a barometer of the health of the UK and with all the business and consumer survey’s so far pointing towards a decline it seems like the data will in the short term only get worse. IHS Markit which surveys the recruitment and employment Industry has reported today a two month decline in the number of people finding a permanent job. If Unemployment is shown to be going up over the next few months then sterling will undoubtedly come under further pressure. September 15th is the next Bank of England meeting and we could easily see another interest rate cut then. If you are considering any kind of transaction buying or selling the pound and wish to be kept informed and secure a better rate of exchange why not get in touch with me Jonathan on jmw@currencies.co.uk. Any information is completely free of charge and at no obligation, please note I can only offer information for clients moving over£10,000 on a bank to bank transfer eg business and overseas property buyers and sellers.

Although it is difficult to be overly optimistic at present we do appear to have avoided the worst case scenarios so far. Sterling is still trading against the Euro in the high teens and remains above 1.30 on GBPUSD. Many of the big banks predicted Brexit would lead to GBPUSD hitting 1.20 and parity or 1 for 1 on GBPEUR. We are by no means out of the woods but the UK does now have a new PM and a base to work from in order to secure Brexit. As we learn of further Brexit news the pound could rise but with Article 50 unlikely to be invoked until 2017 there is lots of time for sterling to languish and markets to digest the situation.

Generally speaking if you are buying a foreign currency with the pound moving sooner rather than later and trading on any spikes is probably the safest bet to avoid further disappointment. If you have a transfer you are debating please contact me to learn more. This site is primarily to provide market news but we can help save you money on your currency exchanges too. I have many clients with currency accounts with some of the UK’s top currency brokerages and they always come back to me because I can undercut other company exchange rates. Any information from me is completely free of charge and at no obligation, I am sure I can make it worth a quick email. Please email me Jonathan Watson on jmw@currencies.co.uk to learn more.