Tag Archives: GBPEUR exchange rates

China shares rebounding helping Sterling (Joshua Privett)

The roller-coaster seems set to continue following the rout from the stock markets at the start of the week. Chinese shares have finally rebounded, and closed the day at 5% higher after massive losses just 3 days ago. However, the recovery is relatively minuscule compared to the losses suffered already.

With returning confidence to the stock market, and also with assurances that China’s slide has stabilised for now, the USD has rising against Sterling, dropping GBP/USD to 1.54 as UK trading opened.

GBP/EUR is a more interesting story. The Euro inflated its value rapidly as the capital from the mass sell off of stocks entered the single currency as one of the cheaper ‘safe haven’ options. This drove up the value of the Euro, and now investors are selling their Euros off, making staggering profits, and buying stocks at dirt cheap prices. More proof that there’s always money to be made, even in a crisis. But this sell off is hurting the value of the Euro in the short term, causing rates to gradually climb back up.

Those with Euros to sell in the next few months, it is unlikely that this situation in China will be helping you to the same degree within this period. This is still the best time to be buying Sterling with Euros since May, and a similar timeline for US Dollars. Call me on 01494 787 478 to receive tailored advice based on your situation and the allotted timeline for your transfer, and if your need is pressing I can also supply a free quote. jjp@currencies.co.uk

After Black Monday – what can we expect on Tuesday?

Sterling rates were in as much chaos yesterday as the financial markets. GBP/EUR had fallen 2.71%, whilst GBP/AUD had increased 4.1% – a difference of 9 cents on the rates in a single day of trading.

Black Monday, the mass sell of of stocks as markets reeled from a suddenly obvious slowdown in China (a massive contributor to global growth), caused a huge amount of capital that was previously held as securities being released; which either had to go into alternative investment or remain liquid in a currency of their choice.

Most of this capital fled into safe-haven currencies such as Sterling and the USD. Yet, strangely, the lion-share ended up in the Euro which is not traditionally considered a safe-haven.

The great lengths the European Union, European Central Bank, and particularly the German Parliament have gone to recently to bolster the stability of the Euro -financially and politically- have made it more attractive to investors as a currency to move to when taking cover from an explosive stock-market. Another cherry on top is that the Euro is still historically incredibly cheap.

So I think we can expect Sterling to make gains today against commodity currencies such as the CAD, AUD and NZD, albeit unlikely to the same degree. But GBP/EUR may fall again as well. Chinese stocks fell another 4% already and UK markets have only just opened.

We are currently in an incredibly precarious position on the currency markets. It is the best time to sell Euros since May when Sterling weakened on the expectation of a hung-parliament. I strongly recommend that anyone with a currency requirement call in to 01494 787 478 and ask for Joshua. We will know more as the day goes on and I can keep you up-to date once we establish initial contact, and give you tailored advice on your situation. I am happy to supply a free quote and guarantee to beat any rates offered by banks and competing brokerages. jjp@currencies.co.uk

 

Shares continue to plummet (Joshua Privett)

Sterling continues to lose value as financial markets go into turmoil. Since markets opened this morning the Pound is already 1.5 cents down against the Euro and looks set to continue sliding. Stock-markets in London opened 3% down already, with value evaporating rapidly.

Panic concerning the Chinese economy has caused a mass sell-off of shares, as investors are nervous that their assets will continue to be devalued. This atmosphere on the markets has completely changed the outlook for raised interest rates in the UK and US economy. Raising rates when it will be difficult for banks to make returns on a weakening global market would be self-destructive behaviour. Furthermore, low rates are considered a buffer against negative external market forces on a domestic economy, encouraging people to spend and keep the economy running from the inside.

Much of the recent run of Sterling and USD strength has been based around this accepted fact that they will be the first nations to raise rates in the Western World since the financial crash. This spanner in the works has likely added another 6 months/1 year to the timeline. Sterling’s value has deflated, and the Euro has benefited from investors moving away from Sterling and the USD searching for short-term returns.

I would strongly suggest those with Euros to buy over the next month to get in contact immediately for a free quote on their transfer. We will likely see 1.35 on the markets by the end of trading this morning, and this situation in China is not a short-term phenomenon. Call me on 01494 787 478 and ask Joshua – quote this article to receive a free quote on your transfer and tailored advice for your own situation. jjp@currencies.co.uk

GBP/EUR crashing following FED minutes (Joshua Privett)

The Federal Reserve Bank of America’s minutes from their July meeting yesterday has altered the whole timeline for global interest rate rises. The consensus among analysts was that most were expecting an interest rate hike in September, but the views expressed in the minutes by the FED members has put seeds of doubt into the market prices had previous reflected a ‘sure thing’. The stimulus for their change in heart seems to be mainly attributed to a slowdown in China and prolonged low oil prices, which crashed again overnight, affecting all major commodity currencies like the CAD, USD and AUD.

What does this have to do with GBP/EUR rates?

Firstly, Sterling’s current strength is largely based around the established understanding that the UK will be following close behind the US in raising interest rates. Multiple reasons do not permit the Bank of England to raise rates before their cousins in the FED. Due to the current weakness in the Euro, should the UK be the first Western country to raise interest rates, the value of the Pound would go out of control, and our largest trading partner will not be able to afford our goods. As such the delay in America for raising rates will have a similar delay for the UK. This is why the Pound is weakening across the board against all major currencies as investors move away to get more short-term returns elsewhere. 

Furthermore, Euro strength is why these rates are crashing rather than simply move gradually against the favour of Euro buyers. Yesterday saw GBP/EUR fall following increased confidence in the Eurozone, a result of the final ratification of the Greek bailout deal. This was exacerbated by the FED minutes as, traditionally, when the USD weakens this translates into Euro strength. USD/EUR is the most commonly traded currency pair in the world, so USD weakening usually means that investors are selling off their USD for EUR, particularly while the single currency is a bargain.

There are no expected data releases today to counteract this rapid crash in GBP/EUR rates. I fully expect that rates will drop below 1.40 today. Those with Euros to buy over the next month will see their budgets tightened further down the road. This change to interest rate timelines will put long-term pressure on the Pound and not be reversed in a week.

I strongly recommend calling me on 01494 787 478 and asking for Joshua in order to receive a free quote, and some tailored advice to your particular situation. I guarantee to beat any rate offered by banks and other sources and will happily peg these current buying levels until the end of the year at no additional cost. Alternatively email me on jjp@currencies.co.uk for me information, particularly if you are a Euro seller and want advice on how to ride this move in your favour.

All eyes on the Federal Reserve…

The big news on exchange rates is the Federal Reserve Minutes due this evening. This is the latest views on just how the American policy makers views the shape of the global and domestic economy plus to what extent the world should be gearing itself up for the US to raise interest rates. This is important stuff because US economic policy has a great impact not just on the US Dollar but also other currencies which in turn can impact sterling exchange rates.

In the end the US is bound to raise their interest rate at some point in the future, the main question is one of timing. I am seeing more and more reports that expect the US will hike their interest rate next month although the recent news from China plus concerns in the Eurozone might still weigh on confidence. This latest report from the US will be very interesting as a guide as to when we can expect the US to raise their rate.

Most commentators expect the raising of the rate to lead to USD strength but I myself am a bit more sceptical. I don’t think it is a given that the USD will strengthen particularly if it is widely expected that they will raise interest rates. We might even see some unwinding of positions and USD weakness if they raise rates as investors feel more confident about improvements in the global economy.

Understanding the market is key to making an informed choice on exchange rates so please speak to me Jonathan to learn more about everything going on that might impact your exchange rate.

GBP/EUR rates rise above 1.40 (Joshua Privett)

We now appear to be in a state of market limbo. After Sterling’s free-fall over the past week, where highs of 1.44 evapourated and 1.39 was seen on the markets yesterday, GBP/EUR rates have rebounded into 1.40 during this morning’s trading.

It is likely that those looking to sell Euros saw the interbank on GBP/EUR hit 1.39 and did not want to gamble any more on the rates moving in their favour. This mass sell-off saw the EUR getting devalued and allowed GBP/EUR rates to recover back to 1.405, which has caused more Euro sellers to act to avoid missing out on the opportunity. We may even see 1.41 by the end of today.

So these rates are not a reflection of any deterioration in Greek talks or poor economic data emerging from the Eurozone, this is purely market psychology and as such are unsustainable.

They are also a gift to Euro buyers when all market data and the current political stabilisation in Europe point to rates moving in the other direction. Mass purchases on the Euro by investors are expected while it is cheap for the hope of greater returns.

Those looking to buy the Euro while the markets are peaking once more should call 01494 787 478 and ask for Joshua for a free quote on your transfer and some tailored advice on your situation. Even if your requirements are not until later in the year, these rates can be pegged to make sure you are not buying at lower rates when you require your Euros. jjp@currencies.co.uk

 

GBP to rise this morning?

The pound is in for a very busy day with a number of key releases mainly from the labour market with UK Unemployment data due. This release actually rose last month and could be a cause for concern. If we see a further increase sterling might really come under some pressure owing to the weaker economy. All in all if you are looking at making a transfer buying or selling pound sterling an awareness of all of your options well in advance is usually a good idea. If you need to make a transfer how do you know you are  getting the best rates? Speak to me to find out by emailing jmw@currencies.co.uk

The next thing to beware of on exchange rates is very much likely to be this Chinese news with the Chinese central bank cutting their pegged level to other currencies. This has presented much uncertainty into the forex markets with a major sell off on the Aussie and Kiwi presenting a very good time to buy these currencies with the pound. The volatility of the last 48 hours just shows nothing should ever be taken for granted on exchange rates!

For more information on your options and how to navigate the uncertainty please speak to me Jonathan on jmw@currencies.co.uk

GBP falls against all major currencies (Joshua Privett)

Changes to the release of UK interest rate decision data had traders and investors around the world fixated on their computers at 12:00 GMT today. Previously the announcements were spread out across the month to control GBP volatility, the decision to release all of this on the same day condensed a month’s worth of volatility into a few minutes of trading. The results were staggering.

It was expected that 2 or 3 members would suddenly support a rate hike, after months where it was unanimously rejected. Instead only one of the 9 voted to increase the base rate. GBP had strengthened heavily in recent weeks off the back of what was expected (as this would get us close to the 5 needed for a majority) but this rather dovish tone found those gains evapourating instantly. Their reasoning was that a stock-market crash in China and a still very present Greek crisis, will continue to drag on global growth, so a rate hike would be premature. Essentially, it seems an interest rate rise in the UK has been pushed back dramatically on the calendar of investors.

This resulted in Sterling weakness. In 3 seconds GBP/EUR dropped from 1.43 to the lower 1.42’s and with an eventual low of the day of 1.419. GBP/USD rates dropped by a similar amount, with a high/low difference of 2 cents, falling to a low of 1.546 during trading today.

Anyone who will be using GBP as a purchasing currency took a hit today, but not as much as they would think. The rates we have enjoyed since the start of the week have been purely based on market psychology rather than concrete economic data to justify currency strength. Now that these hyped up expectations were not met, these current rates for GBP/EUR and other GBP pairings are a true reflection of what the highs should be for this year. I would not expect another expectation of a rate hike this year to boost rates back up again, particularly after the dovish tones heard today from guardians of UK financial policy.

The Bank of England will not boost Sterling’s value for you, so speak to an experienced currency broker who can. I can maximise the value of the Pounds you hold if you have a transaction. Even if your requirements are not until next year, you do not have to wait and hope these rates will still be available. They can be pegged to allow you to budged more effectively and make sure you don’t miss out. Email me overnight on jjp@currencies.co.uk for a free quote and tailored advice on your transaction. Alternatively call 01494 787 478 after 8:30 am tomorrow and ask for Joshua.

When should I buy? (Daniel Johnosn)

Sterling gained strength over most major currencies following a rise in GDP in the second quarter. GDP came in at 0.7% compared to Q1 at 0.4%. Out put is very close to the the levels seen just prior to credit crisis of 2008. The BOE meeting next week could show some change in voting patterns for a rate hike. However, it is not all good new as the strength of Sterling is hitting our Exports. The confederation of British Industry (CBI) has signaled the weakest outlook for exporters in four years. due to this it wouldn’t be wise to rise interest rates for at least six months.

I doubt we will we see any major volatility in GBP/EUR while the Greek debacle continues. If you have a currency requirement in short to medium term it would be advisable to move on a spike in your favor. I currently offer a free of charge rate alert service, don’t hesitate to drop me an e-mail or give me a call to let me know if you would like to notify you of market movements.

We do have some very large GBP/EUR trades going through this week which potentially we can tag new clients on to and achieve a very competitive rate.

Thank you for reading today’s Blog, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than than happy to assist you with any of your currency requirements. Feel free to e-mail me on dcj@currencies.co.uk or call on 01494 787 478 and ask for Daniel Johnson.

Strong GDP Figures surprise markets and boost Sterling (Joshua Privett)

Even though yesterday was a relatively quiet day for data releases, significant weakening for Sterling was recorded. Rounding off a general trend away from the fresh 8 year highs reached last week for GBP/EUR rates at 1.44, poor retail sales figures released in the UK economy caused rates to drop to the low 1.40’s. It was expected that due to the contraction recorded in the retail sector, normally a fantastic performer for the UK economy, that GDP figures will dissapoint markets further on the British economy. As a result, this lack of confidence in the Pound caused rates dip back below the magic 1.40 marker.

However, GDP figures came in higher than expected, surprising everyone, and causing all of the losses for the Pound on Monday to be reversed. Rates suddenly catapulted up to 1.41 this morning. But it is important to note that rates were moving in the opposite direction before this little psychological stunt in the markets. GDP figures also did exceed expectations at the start of the month, they simply did not come in lower than the 0.7% previously predicted.

Without strong data to change the current course of GBP/EUR rates following the agreekment, I fully expect rates to continue journeying downwards. Those looking to purchase Euros should call 01494 787 478 and ask for Joshua to receive a free quote on your transfer. Alternatively, email me on jjp@currencies.co.uk to discuss how to maximise the value of your Sterling while the market is moving against you.

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