Tag Archives: GBPEUR exchange rates
Sterling weakness up ahead? Why now is a good time to buy the pound
Jonathan Watson
Currently sterling is well supported largely due to the strong likelihood of the UK raising interest rates next year. Investors are taking up positions on sterling in anticipation of better returns in the future. 80% of currency transactions are speculative and whilst this is not a topic we deal in for clients , it is a topic that is extremely relevant in determining future market movements for our clients.
Longer term sterling appears bound to increase significantly as the prospect of ultra low interest rates becomes the past. The pound has been flirting with 5 year highs on a trade weighted basis which when you consider interest rates have been at rock bottom for 5 years makes sense.
Since we won’t actually see any actual hike for some time there is certainly a good chance of more GBP weakness but it will be in pockets and not reflective of a greater downward trend. If you are going to need to purchase the pound in the future moving sooner is I believe the best course of action. Please contact me directly for assistance in sourcing the best rates and the optimum peaks to trade on. I assure you of being able to beat the banks and currency brokerages.
Many of my clients selling say Euros and Dollars after a property sale are quibbling over the fact they are trading at multi year lows. I wholly sympathise with these clients because when you do the calculation on the losses selling six figure sums in the last year they are substantial. But if you look further back say at the 10 year and 5 year figures you will see current rates are not so bad.
Take Mr Smith in France for example, who may have purchased there when rates were say 1.50. Imagine buying a 200,000 Euro property at 1.50. This would have cost you 133333.33 GBP. Fast forward ten years and unfortunately he has had to sell to come back to the UK and had to take a hit on the price. He had to sell for 175,000 Euros and was not happy at having lost 25,000 on the price. However he managed to get 1.20 on the rate which means his 175,000 Euros are actually worth 145833.33 GBP. Suddenly it is not such a bad deal and when he considers all the fun times he had there, the whole experience has actually not been too bad!
This just shows the importance of exchange rates when considering overseas transactions. Sterling is at a very good level now which may yet improve. Understanding what is driving exchange rates is critical to getting the best deal. For more information on the forecast for your particular situation please don’t hesitate to contact me directly on jmw@currencies.co.uk
UK Inflation the lowest since October 2009. Sterling weakens on the back of the release. (Ben Amrany)
Ben Amrany
Sterling has been performing extremely strongly against both the Euro and US Dollar over the last couple of trading sessions with rates spiking to a 13 month high against the single currency and amazingly over a four and a half year high against the greenback.
On a trade weighted basis (16 most traded global currencies) sterling is the strongest it has been for five years now.
But why the turn around in fortunes?
Over the last few months economic data from the UK has been looking a lot healthier and recently under the Bank of England Governor’s forward guidance plan the financial markets have advanced the date at which they think the Bank of England will announce an interest rate rise to February 2015, well before they expect a move from the Fed, the ECB or the BoJ.
Events in the last couple of days goes to show how quickly you have to act should the pound spike. Once the pound hit the highs mentioned it quickly weakened over the next 24 hours by over 1 cent against the Euro and 2 cents against the Dollar. The weakness has occurred as the UK just posted its lowest inflation figures since October 2009. This pushes back interest rate hike expectations and I have been stating for a long time that the lower inflation falls it gives the Bank of England more scope to keep rates lower for a longer period of time.
The further inflation falls theoretically the weaker the pound could get so this is one to keep a close eye on over the next few months.
Tomorrow will be interesting for all with a requirement as the latest unemployment data and Bank of England minutes will be closely watched as the markets will try and digest any economic trends for the UK and any divisions between the MPC on the banks forward guidance policy.
Now that we have seen Inflation falling further, sterling may just come back tomorrow should we see a continual trend of falling unemployment and just one member of the MPC voting for a rate hike now. But should the data come out the other way then sterling exchange rates may just fall back towards 1.20 against the Euro and 1.65 against the Dollar.
If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at bma@currencies.co.uk
Mark Carney helps sterling to rise, will it last?
Mark Carney and the Bank of England have raised UK growth forecasts helping sterling to gain against a number of currencies. At the same time they have underlined interest rates will be on hold for a long period of time which limits just how much higher we can expect sterling to rise in the coming weeks and months.
Jonathan Watson
If you have a sterling transfer to consider in the coming weeks and months making some plans now at these levels may be a sensible move.
In other news the new Federal Reserve Chairmen Janet Yellen underlined Quantitative Easing in the US is likely to continue until there are significant improvements in the jobs market. And overnight Chinese economic data was much stronger than expected presenting what I believe is a very good opportunity for anyone selling Australian dollars or South African Rand to buy GBP.
I am available to assist in the planning and execution of any international money transfers you need to make (including bringing funds back to the UK or Europe). Unfortunately no one can tell you exactly what will happen on exchange rates but having won awards for our service and rates, we are extremely well placed to offer expertise in managing your currency exposure.
For a breakdown of strategies and options on your particular exchange please call me Jonathan in UK office hours on 01494 787 478 or if you prefer email a quick outline of your position to jmw@currencies.co.uk
Market Alert – Sterling outlook changes
Jonathan Watson
Next Wednesday is a key date for anyone with an interest in sterling. The Bank of England will announce its QIR or Quarterly Inflation Report which will provide insight into just how the pound will perform for the next few sessions. Whether you are buying or selling sterling this release is likely to create some movement on the markets which will alter the value of your currency purchase.
I am of the opinion some sterling weakness is likely and it is for a reason I have been highlighting for much of 2014. That is the gulf between what the Bank of England is saying about interest rates and what the market has priced in.
80% of currency transactions are speculative. The reason we see movement on exchange rates is indicative of what the market thinks or feels may happen. Since Mark Carney took office the pound has performed very well as the UK economy has improved. By tying Unemployment to the raising of interest rates focus has been very much on a UK interest rate hike. And perfectly legitimately the market has over bought sterling in anticipation of UK interest rates being raised sooner. If you look at the language of Mark Carney and the Bank of England however any possible rate hike is much further ahead than the market speculators are guessing.
Therefore I think despite the improvements in the UK economy warranting increased confidence, these high expectations surrounding sterling may now be misplaced and the risk to the downside has increased. Tomorrow we have some Industrial and Manufacturing data which last month caused sterling to weaken. We also have Trade Balance data tomorrow which we know is one of the major negatives surrounding sterling and the UK economy.
The outlook therefore for sterling has changed and just like the market has been subtly amending its positions anyone considering an international money transfer involving sterling too, should take note.
We are specialist currency brokers who offer market insight and commentary alongside award winning exchange rates. if you have a transaction to consider, small differences in your rate can make a huge impact on the amount of currency you receive.
For further information please contact the author directly on jmw@currencies.co.uk or call 01494 787 478 and ask to speak with Jonathan.
Sterling weakens on poor data. best rates for buying the pound against the NZD, AUD, USD & EUR (Ben Amrany)
Ben Amrany
Sterling exchange rates are significantly lower against all of the major currencies this afternoon after services PMI data showed a decline for the month of January. This has reaped pressure on the pound and the losses are causing GBP/EUR to dip t 1.2012 while against the USD now down at 1.6262. We have even seen a big loss against the antipodean currencies where GBP/NZD has fallen from a high last week at 2.04 now at 1.9750 and the AUD has dropped from 1.90 down to 1.8230 in a matter of days.
We have been stating for while that if you are looking ta selling the pound to secure any of the major currencies you would have been wise to have traded while the pound was spiking and achieve very attractive levels. If you have not secured your funds you may be wise to sit tight to see if the pound rebounds slightly but be cautious as you do not want to get caught out with e significant decline for sterling.
The current movements are welcomed for those looking at selling Euros & Dollars and should the economic data out of your region be positive then you should secure the sterling you need by acting on the spike. Looking forward the interest rate decision in the UK should be a non event but it is the minutes two weeks later that will be key for the pound. If the bank of England give any updates on interest rate rises or indicate that this will not happen in the near future then expect a further sell off of sterling and the rate to fall further.
After the interest rate decision on Friday there is a host of economic data out across the globe but key for sterling in the UK are the manufacturing and trade balance figures. Should manufacturing be similar to the construction data at the beginning of the week then we could see the pound spike back up.
Regardless of if you are buying or selling the pound we try here to help you time your exchange. I offer a very persona
If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at bma@currencies.co.uk
Sterling dips – Is this a good time to buy pounds?
Sterling has dropped against many currencies following improvements in risk appetite. Partly evidenced lately in the lack of any EM sell-off, rates on the more risky currencies have fallen back into line and I think this is a good time to be purchasing sterling since their is a strong likelihood the pound will strengthen again against these currencies.
Tomorrow we have UK Services data which is expected to show a small improvement in the rate of growth in the Services sector. However with most UK data lately not being quite up to scratch there is a potential for a slight correction and sterling dip.
The fundamental reasons for GBP strength should see this through and this is why if you have a foreign currency to sell for the pound I suggest moving sooner.
For more information on the market or your options please contact me Jonathan on jmw@currencies.co.uk or call 01494 787 478
Sterling slides against the Euro and New Zealand Dollar. Best rates to sell Euros and NZD. (Ben Amrany)
Ben Amrany
Last week was a good end for the pound against many of the major currencies spiking to 1.22 against the Euro and up to 2.04 against the NZD which was the highest rate since June 2012.
Today we have seen the pound fall against both of the above currencies after positive manufacturing data out of Germany with sterling back down to a low of 1.2045 against the Euro and 2.0080 against the Kiwi Dollar.
For those of you looking at selling the pound we may see a fall for sterlin over the course of this week should the data continue to be positive for the Euro zone and negative for the UK. The one thing that would concern me if you are buying the Euro, Kiwi Dollar or any of teh majors were comments by the Governor of the Bank of England. He stated they have to look at all factors of the economy and not just the unemployment rate before deciding when to look at hiking interest rates. Thsi gives them scope to choose when they wish to raise interest rates.
This week’s interest rate decision will now be closely watched by the markets to see how many members vote for an interest rate hike when the minutes are released two weeks later. If the Governor tries to talk down interest rates any further then you may find sterling dip lower. My prediction is that we won’t see a rate hike until 2015 so we may have a long time to go before we see real strength for the pound.
If you are looking at selling Euros to buy GBP then we may get a good window of opportunity to secure your funds this week if the market continues the trand seen today.
If you are concerned about the BoE comments that the pound may weaken and are considering buying your currency then feel free to contact myself Ben Amrany at bma@currencies.co.uk and i can explain the options available to you to minimise your risk to currency fluctuations.
If you are in the situation needing to move money internationally and looking for the best price – please feel free to contact the author – Ben Amrany – via the telephone number at the top of the page or via email at bma@currencies.co.uk
Pound sterling forecast for February
Jonathan Watson
Amidst all of the excellent news for sterling here is a key factor that is being discounted, that has already caused the pound to fall from it’s recent highs against most currencies. Don’t get me wrong the pound is performing well but to truly understand what we will see in the future it is wise to examine all of your options.
Finally the UK economy is growing and this has helped the pound to reach multi year highs against a range of currencies. Sterling should in theory remain well supported, I would not expect a return to the kind of levels we saw last year but then we have seen many of the gains consolidated lately. This is in part due to comments by the Bank of England Governor Mark Carney that interest rates are set to remain on hold for some time. Even with improvements in the labour market it is highly unlikely sterling will continue to climb solely on this basis and we are encountering heavy resistance against many currencies now.
GBPEUR – The Euro has fought back against sterling with some improvements in Manufacturing but some not so great German Unemployment data more recently underlines the challenges still ahead for the Eurozone and hence the Euro. I expect this pair to trade in a range of 1.20 to 1.24 for the month of February. If you are buying or selling Euros for sterling and wish to be kept up to date with the latest developments please let me know on jmw@currencies.co.uk
GBPUSD – Taper expectations remain and despite more immediate fears of an emerging market (EM) sell-off, the USD remains weak. If this EM sell-off really develops you may see the USD gain although I believe we are seeing firm evidence of the USD losing it’s shine as the main safe haven. The dollar and US Treasuries will of course be the mainstay of many a portfolio but I feel sterling and the euro have also been beneficiaries of this more recent uncertainty too. I expect this pair to trade in a range of 1.61-1.68. For information on buying or selling dollars and what to beware of on the market in February please contact me on jmw@currencies.co.uk
GBPAUD - If the sell off continues the Aussie will suffer. However as one of the safer ‘riskier’ currencies it may not be too dramatic. I think the key question is will the RBA seek further weaker exchange rates? I think the answer is probably and as such there is much scope for us getting back into the 1.90′s. Having said that question marks over the UK economy’s economic recovery could see rates in the mid 1.80′s again. My 1 month forecast is 1.85-1.96. With so much movement on this pair in a short space of time an awareness of our service and processes is key to getting the best deal. I have helped thousands of clients move money in and out of Australia in recent years so please get in touch with me on jmw@currencies.co.uk to learn more about what you can expect on GBPAUD in February, including how to protect yourself if things do get worse.
The South African Rand (ZAR) is in free fall and the Canadian dollar is on the back foot too. All in all sterling is at a very good level to buy other currencies but exchange rates do not stay still and it would be foolish to take anything for granted.
Our specialist proactive and personal service will help explain all of your options and the market so you can make an informed decision about your exchange. Even if you are not experienced in such matters we can help explain and offer guidance on moving your funds internationally. We aggressively undercut the banks and other currency brokers so getting in touch is well worth it.
If you don’t see the currency pair you wanted please email me your situation and I can give you information specific to your exchange.
Should you wish to learn more or have any questions whatsoever on what we can offer please fill in the form or feel free to contact me Jonathan on jmw@currencies.co.uk or call 0194 787 478 in UK business hours. We have serviced 60,000 clients globally for 14 years and would be very interested to hear from you.
