Tag Archives: GBPEUR exchange rates
My previous post from the initial release of the Bank of England interest rate decision and minutes from their latest meeting noted that Sterling weakened against most major currencies at the beginning of the afternoon. This was due to the overwhelming consensus to keep interest rates on hold. What compounded this was the minutes from the meeting which painted a bleak outlook for the UK’s future timeline for raising rates as well.
It wasn’t a negative view of the UK economy as such. Concerns were made about inflation, with core inflation not expected to even hit half of by the BoE’s target rate of 2% by spring 2016, as well as the struggling construction and manufacturing sectors. But employment is still at fantastic levels, with our 5.4% rate of unemployment much better than the historical average of 7.22% since the 70’s, and growth expected to be 2.4% GDP for 2015.
But currency value isn’t simply a reflection of the current state of the economy. It’s about net flows of currency and there seems to be little on the horizon to make Sterling more attractive to purchase.
The minutes from the meeting highlighted that the UK economy is almost at ‘capacity’. This suggests that while positive data will continue to come in, there will be no gains to bolster confidence in the currency in question. For example employment figures may still be high but without the headline news of a fall in the actual unemployment rate itself it is unlikely that Sterling will shine on the markets in the short-term for October.
Furthermore, the continuing concerns about China and global slowdowns were expressed in the report. This has likely delayed the timeline for the UK to raise interest rates further, as this continuation of concern from the last report shows that this will be an ongoing brake for the BoE’s plans to change financial policy.
The only reason Sterling didn’t fall further today, was due to minutes released from the European Central Bank’s latest meeting which showed similar concerns. Which is why the afternoon slide on GBP/EUR halted at 1.356 from highs of 1.363.
With these long-term concerns I believe that the current market presents some excellent opportunities to use Sterling as a buying currency compared to where rates may be by next month.
I strongly recommend that anyone with Euros to buy should contact me overnight on firstname.lastname@example.org to receive a competitive quote on any planned transfers, and my advice on how to strategize any imminent or future transfers. Those concerned about where rates are going should know that these levels can be fixed to avoid further movements in your favour. Unfortunately Sterling’s sustained slide over the past few months isn’t showing signs of abating. 01494 787 478
Once again the Bank of England seems to be treading water with absolutely no change in the voting pattern for an interest rate hike, with still 8-1 against the decision, way off the majority necessary for a change in financial policy.
Markets are scrutinizing the minutes closely, and while this is being digested, Sterling is steadily weakening on the markets. I will write a full overview later on this afternoon for a new 4-week prospect for Sterling, but so far from what I am reading those looking to be using Sterling as a purchasing currency will likely be facing further Sterling weakness moving forward due to apprehensive tones in the BoE meeting minutes.
A cursory observation suggests that anyone with Euros, USD, or AUD to purchase should be looking to move sooner rather than later considering the emerging trends this afternoon.
Feel free to contact me on 01494 787 478 and ask the reception for Joshua for a free quote on your transfer as well as my opinion on your current situation, we can discuss a strategy on how minimize the effects of today. I guarantee to beat any rate offered elsewhere, which is all the more important when markets are moving against you.
Those looking to purchase Sterling can do the same or email me on email@example.com to discuss a strategy on how to ride this continued move in your favour to its peak.
Tomorrow evening President of the European Central Bank, Mario Draghi, is set to give his latest press conference regarding how the European Central Bank observes the current European economy.
Last week, the latest Consumer Price Index, also known as inflation which is s the rate of increase in prices for goods and services and can have a significant impact on the currency markets, disappointed eurozone leaders as a fall to -0.1 means the eurozone has entered deflation.
Mario Draghi back in March of this year, weakened the euro significantly by introducing a €60bn a month, aggressive quantitative easing programme in order to combat inflation and stimulate the eurozone economy. This certainly hasn’t worked!
It will be interesting to see how Mario Draghi approaches tomorrows press conference because it was only 2 weeks ago he stated he would not be increasing the amount of quatitaive easing just yet, however he did say he had the tools and he would use them if he thought he needed to. Now the euro has fallen back into deflation I think he may have to change his tune!
Later in the week is the latest interest rate decision for the UK on Friday. Last month the vote was split 8-1 in favour to keep interest rates on hold. With the UK’s latest GDP figure dropping to 2.4% from 2.6%, we could see the individual member who has been voting to hike, change his stance and the vote swing back to 9-0, possibly creating good selling opportunities for people holding onto a foreign currency.
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. Dayle Littlejohn firstname.lastname@example.org. If you would prefer to phone the office, the best number to call me on is 0044 1494 787 478 and ask the team to put you through to Dayle Littlejohn.
The release of non-farm payroll data in the US economy is one of the few market events every month which has the potential to affect almost all currency pairings.
The overestimation for the report was staggering. It was expected that more than 200,000 jobs would be added to the US economy in September, instead it fell short by more than 70,000 jobs.
As USD/EUR is the most traded currency pair in the world, whenever you lose confidence in one, the other benefits massively. This is what has happened this afternoon. GBP/EUR has now bested the lows of May and it is now the best time to sell Euros since February.
However, we have repeatedly seen these short-term gains eaten up. Those looking to sell must remember that very little of these favourable movements are to do with positive data coming from the European economy. As such these rates are artificial and were never meant to be a permanent feature on the markets. We come down to these lows only to see them evapourate immediately, this is a proven trend on numerous occasions since August.
As such I still strongly recommend that anyone with Euros to sell to call me on 01494 787 478 and ask the reception for Joshua for a free quote on your transfer to avoid missing out on these opportunities. I can offer a rate beating guarantee here to increase your chances of transferring at the absolute peak.
Similarly those with USD to buy, with the interest hike in the US looming (guaranteed by the head of the FED a few weeks ago), we may be seeing the best buying levels for the Dollar before the end of 2016 now. email@example.com
GBP/EUR rates cascaded downwards towards the end of UK trading yesterday, then US markets opened and the same trends we were seeing for the UK market throughout the day were replayed across the Atlantic.
As predicted in my post yesterday morning, we are now in the lower 1.3’s as the trends established by markets on Friday have continued on unabated.
The main determinant for this recent loss of Sterling value has actually been due to developments in the US. Janet Yelen, the head of the Federal Reserve Bank of America, gave near guarantees that the US will be raising interest rates before the end of the year.
Since the 2007/2008 financial crisis, arguably the main determinant of any major currency’s value is its timeline to raise interest rates once again. The US is making bold claims of their own, while the UK seems to be shying away. Andy Haldane, one of the 9 members at the Bank of England who vote on our interest rate level each month even mentionned the possibility of future cuts to protect the UK from negative market forces (a poorly performing China).
As such there was amass sell-off on Friday of Sterling into the US Dollar for investors looking for more likely short-term gains. GBP/USD crashed, but the large sell of of the Pound also caused secondary effects for its other currency pairings. The loss of demand for Sterling is why GBP/EUR has fallen so drastically as well.
These trends continued into Monday, but it is likely that this trend in favour of Euro sellers has now halted.
We have been down at these levels last week. Rates instantly shot back up as the temptation to sell Euros when these rates presented themselves became too high, causing markets to correct themselves rapidly.
Markets will now be looking ahead to the release of Eurozone inflation tomorrow, as such, the recent market forces in favour of Euro sellers are no longer the sole focus.
Anyone with Euros to sell I strongly recommend calling me on 01494 787 478 and asking the reception for Joshua. This way I can provide you with advice on the best time throughout the day to convert your Euros, and once we have a strategy in place I can offer a free quote on your transfer (to which we offer a rate-beating guarantee).
Those with Euros to buy may see tempting opportunities in the wake of thes recent lows by the end of the day, email me on firstname.lastname@example.org to discuss how to maximise any moves in your favour to a level you desire or require with a limit order.