GBPEUR exchange rates | Pound Sterling Forecast

Inflation Data could have a big influence on Monetary Policy (Daniel Johnson)

October 17, 2017 by Daniel Johnson

Will Inflation Data break 3%?

This morning at 9.30 we will see the release of UK inflation data. We have seen a rapid rise of late, with the last data release showing an increase to 2.9%. If there is a rise above 3% there is the high probability of an interest hike in the UK. Mark Carney the governor of the Bank of England (BOE) has indicated there is the strong possibility of a rate hike on November 2nd and if inflation does go above 3% it could force the BOE’s hand.

I am dubious on the justification of a rate hike. Inflation is only considered healthy if average wage growth is growing at a similar pace. We actually saw a decline when the last results were released, a fall to 2.1%. Unemployment has also been lauded as the best levels since the 70’s, but they have only recently had the inclusion of zero hour contacts.

Today’s inflation data does have the power to move markets, if there is a rise in inflation I would expect Sterling to strengthen based on the higher probability of a rate hike. We saw GBP/EUR move to 1.14 following Carney’s hints towards a hike.

Brexit Update

Brexit talks have hit a brick wall of late. Theresa May has taken action and flew to Brussels on Monday evening for talks with EU leaders Jean-Claude Juncker and Michael Barnier in an attempt to speed up negotiations. The talks have been reported to have been constructive and friendly although we have seen little movement on the markets. This does bode well, but we need further clarity on key issues in order to see substantial gains for the pound.

During such unpredictable times you need an experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavour to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

What are the factors which will pre-empt a Sterling recovery? (Daniel Johnson)

October 11, 2017 by Daniel Johnson

Sterling Outlook – Political Uncertainty and lack of clarity on Brexit holds back the pound

I feel like I am beginning to sound like a broken record, but the key factors that are holding the pound at current levels is political uncertainty an a lack of clarity over Brexit. The need for a stable government is a must at any time, but particularly when we are about to enter the most important negotiations in the last fifty years. Inside bickering in the Tory party is doing little to boost investor confidence. Former Conservative party chairman, Grant Shapps has said there are as many as thirty party members who have no confidence in Theresa May’s ability to perform her role. There has been calls for a leadership election. If this occurs expect further suffering for the pound. This could well be the case considering it seems the majority of politicians are following their own political agenda rather than trying to keep the country in order.

There really needs to be a emphasis on sorting out the key issues on Brexit negotiations. Citizens rights and Trade, there is yet to be an agreement on an exit bill, we are stuck at the first hurdle.

BOE Interest Rate Hike

The governor of the Bank of England, Mark Carney recently announced there is the strong possibility of a rate hike in the coming months. There is apperently a 77% chance of a hike on 2nd November, I would expect this to be largely factored into current rates as the market moves on rumour as well as fact. I am however dubious this hike will occur. Carney could well be using a technique known as jawboning, talking up the value of a currency rather than making a change to monetary policy. It is important to remember the Monetary Policy Committee (MPC) voted 7-2 in favour of keeping rates on hold at its last meeting, the MPC are the decision makers.

The hike is not justified based on economic data. Unemployment is being lauded best the best levels since the 70’s, this may well be the case, but you need to take into account zero hour contracts which are far from a stable form of employment. Inflation is currently at 2.9%, this can only be considered as healthy if average wage growth is growing at a similar pace. We have actually seen a decline in wage growth to 2.1%.

GBP/EUR – Could Catalonia situation create a spike for Sterling?

If you are hoping for an improvement on GBP/EUR the situation in Spain could create an opportunity. With many Catalonians seeking independence the euro could fall in value. The referendum that has taken place which shows firm support for a break from Spain is slightly dubious as it is not being recognised by the Spanish government. If a serious break form Spain does become apparent the euro will come under pressure. This is a possibility as last night Catalan President Carles Puigdemont and other regional leaders signed a declaration of independence.

GBP/USD – FED Rate Hikes could cause further Sterling weakness

I think there is the strong possibility rate hike by the Fed is in December. Something that has occurred in the previous two years. Data has been strong from the US. Service sector & manufacturing are at twelve and thirteen year highs respectively. We have seen some rather obscure non-farm payrolls data, but some of this data can be attributed to the devastation caused by Hurricanes Irma and Harvey. That is not to say the unpredictability of Trump could not throw a spanner in the works.

It is vital experienced broker on board if you wish to maximise your return. If you have a pending currency transfer let me know the details of your trade I will endeavor to assist. There is no obligation to trade by asking for my help, I will provide a free trading strategy to suit your individual needs. If you do wish to try our service you can trade in the knowledge we are a no risk entity, as we do not speculate. Foreign Currency Direct PLC has been in business for over 16yrs and we are registered with the FCA. If you already use a provider I can perform a comparison within minutes and I am confident I will demonstrate a considerable saving. I can be contacted at dcj@currencies.co.uk.

Interest Rates, Brexit and QE all dominate Sterling vs Euro exchange rates (Tom Holian)

October 11, 2017 by Tom Holian

As predicted with my post from last weekend the Pound has already had another difficult week so far against the Euro.

The Pound is now trading at its lowest point vs the single currency in 4 weeks as the Pound continues to be negatively affected by what is happening with the ongoing Brexit talks.

There is a lot of political unrest caused by some Tory members looking to form a group to campaign for a leadership election.

The Pound made some positive gains during September on the rumours that an interest rate hike may be coming which saw GBPEUR exchange rates hit 1.14 but since then the Pound has lost 3 cents vs the single currency which can make a big difference when buying Euros with Sterling.

With the Bank of England due to meet on November 2nd to discuss their latest monetary policy I personally would be surprised to see any change in interest rates.

My reasoning is that although UK inflation is running high at 2.9%, average earnings are lagging behind which means if an interest rate hike happens then this will increase the cost of borrowing and therefore consumers will have less to spend which could harm economic growth.

Many of the ECB members will be speaking publicly including ECB president Mario Draghi.

With rumours circulating that their current QE programme may be reduced in December I think when the talks commence tomorrow we could see further Euro strength vs the Pound.

If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency.

A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as I can.

Will the Pound make gains vs the Euro in October? (Tom Holian)

September 29, 2017 by Tom Holian

Sterling vs the Euro has increased by almost 6% during the course of September as the British economy has showed some positive signs recently.

The difference between the high and low during this month between the Pound and the Euro is the difference of £5,500 on a currency transfer of €100,000 highlighting the importance of timing when making arrangements to buy or sell your currency.

Inflation is close to its highest level in over 5 years and with UK unemployment at its lowest level in over 30 years this has helped the Pound to make gains against both the Euro and the US Dollar.

This has prompted the Bank of England to hint that they may be looking at hiking interest rates as early as November.

Bank of England governor Mark Carney has suggested that any change will be both ‘limited and gradual’ but personally I would be surprised to see any change when they meet on 2nd November.

My reasoning is that with UK average earnings falling further behind inflation an interest rate hike is likely to cost more on your monthly mortgage or rent and therefore increase the cost of living which in turn could impact economic growth.

Sterling manages to hold on to its recent gains, but will the upward trend continue? (Joseph Wright)

September 26, 2017 by Joseph Wright

Sterling has benefited from uncertainty surrounding many economies over the past week, which is a pleasant change for those hoping for Sterling strength.

As the tensions rise between the US and North Korea with the latest unfoldings being in the news headlines on a daily basis, investors appear to be moving away from the US Dollar despite the higher rate of return on their funds when compared with most other major currencies.

The Euro has also come under pressure although for different reasons. Angela Merkel’s Christian Democratic Union party was victorious in the past weekend’s election meaning that Merkel will lead Germany for her 4th term. The victory has been overshadowed by the strong performance of the far-right AfD party who’s values contrast with Merkel’s party and this has resulted in a weakened Euro.

This is good news for those planning on making a GBP to EUR currency exchange as they’re now in a position to receive more Euros for their Pounds than they would of for at least the last 2-months.

There is a quiet week ahead for UK data releases which may work in favour of further Sterling strength, with tomorrow’s GDP data being the week’s main release. Feel free to get in touch if you wish to discuss this data release further as it does have the potential to move the markets.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Sterling continues its recovery for now, but is this boost to its price just a short-term selling opportunity? (Joseph Wright)

September 13, 2017 by Joseph Wright

The Pound has risen this week against most major currency pairs, making the converting of Pounds into other major currencies a more attractive proposition.

The headlines within the financial news mostly consist of how the Pound has hit a 6-week high against the Euro, and also a 1-year high against the US Dollar.

Interestingly these gains have come at a time when the Brexit negotiations have been postponed for a short while in order to give the UK and EU’s negotiators some time to contemplate, so it will be interesting to see how the markets react once negotiations resume which was supposed to be on the 18th of this month.

Tomorrow is likely to be a busy day for the Pound as there is a raft a data due out of the UK tomorrow lunchtime, as the interest rate decision will be announced and although I’m not expecting to see a rate change, I think that any allusions to the Bank of England amending their plans to hike rates in 2019 could see the Pounds value change quite dramatically.

The inflation data out this week has boosted hopes of this happening after the figure came out higher than expected, so I also think that Sterling bulls hopes could be dampened by the BoE tomorrow which could result in a drop for the Pound especially against the Euro.

The data comes out tomorrow at lunchtime, which give our clients and also potential clients the chance to discuss their currency requirements with me beforehand. You can call me on 01494 787 478 and ask reception to speak with Joe if I don’t answer.

Euro improves against the Pound after ECB Meeting (Tom Holian)

September 7, 2017 by Tom Holian

European Central Bank president Mario Draghi has spoken out after today’s monetary policy meeting and suggested that they do not see any negative effects caused by their QE programme.

He went on to say that the Eurozone is showing good signs of growth and this caused EURUSD exchange rates to jump past 1.20 hitting close to an 18 month high for anyone selling Euros to buy US Dollars

Indeed, according to the European Central Bank the Eurozone is set for its fastest growth in 10 years with a forecast of 2.2% for this year.

The sentiment from Draghi was generally very positive and this also caused GBPEUR exchange rates to fall.

Draghi went on to suggest that the ECB would look closely at QE next month which suggests that they may begin the tapering of their current programme as early as October.

The current amount is for €60bn and when this is reduced this is likely to help improve the Euro. However, it could be argued that the movement is already priced in so we may not see such movement when it finally does take place.

The Pound is also feeling the negative effects caused by the Brexit talks and there are still big issues between the Tories and Labour as to how the Brexit Bill will work.

UK politicians to influnce sterling exchange rates

September 7, 2017 by Dayle Littlejohn

Today is the first day that Theresa May’s Conservative party will set out plans for the future after Brexit and how EU law will transpose into UK law. By all accounts these discussing will be heated and MPs from opposing parties will not agree with the Prime Ministers plan.

It is no surprise that the Labour party plan to block the ‘Great Repeal Bill’ however for the bill to be blocked, Conservative MPs will have to vote against the Conservative party, which in my eyes would put there career in jeopardy. It is more likely that the bill will go through and at a later date Conservative MPs will try to make amendments.

The discussions are set to go on for the next couple of days and voting should start early next week. In regards to sterling exchange rates I don’t expect this story to have a major impact on exchange rates and if anything I expect the gains the pound has made this week to be reversed.

It has been reported after the party conferences in October this will be the chance for Conservative MPs to go against Theresa May’s Government. MP’s will lay down 100s of amendments, however the amendments will come from a back bench politician alone and not the leader of the opposition Jeremy Corbyn.

Even though it looks like the pound will continue to remain under pressure its important when buying or selling the pound that you analyse the other currency that you will converting. If you have an upcoming currency transfer to make this week, month or year I would recommend emailing me with the currency pair (GBP/USD, GBP/EUR, GBP/AUD etc) and your individual requirement (buying a property abroad, paying a company invoice) and I will personally respond to you with my forecast and the process of using our company drl@currencies.co.uk.

For example if I were buying euros I would trade as soon as I could, as the ECB’s interest rate decision has the potential to push GBPEUR exchange rates back towards 1.06-1.07. Where as the US dollar continues to remain under pressure for a few reasons including a dovish Federal Reserve of late, therefore I would set up a limit order and try and purchase US dollars at a higher rate.

For people that are buying a foreign currency the pound has last approximately 15-18% in the last 16 months, therefore when you make the conversion it is essential that you get the best rates. If you have used a brokerage for many years or have been referred a brokerage I strongly recommend you compare rates to make sure you get the best price possible and therefore save money. This simple exercise takes two minutes and in the past I have saved clients hundreds and in some instances thousands of pounds.

Can The GBP/EUR Rate Climb Back to 1.10? (Ben Fletcher)

September 1, 2017 by Ben Fletcher

Sterling appears to have held the gains made against the Euro on Wednesday and the question is could there be more rises? Yesterday the third round of Brexit talks took place and it appears the UK negotiating team have gone onto the front foot claiming that the EU figures are fantasy and they wont be blackmailed. International Trade Secretary Liam Fox has suggested that international businesses are becoming frustrated with the lack of focus on a trade deal with the EU so committed on the “Brexit Bill” figure.

Now that there seems to be external pressure we may see a focus move towards the trade deal outcomes, which could change the fate of Sterling at the moment. The uncertainty surrounding Brexit is having a major impact on Sterling and this is exaggerated by the strength currently seen for the Euro. There has been overwhelming encouragement for the Euro in the last few weeks with strong economic data and a optimism that the ECB may taper back the current stimulus measures.

Next week the European Central Bank will provide their latest interest rate decision and more importantly Mario Draghi will speak. The President of the ECB is known for causing the GBP/EUR rate to drop and next week depending on what he says it could move either way. Last week at a speech he confirmed he liked the current stimulus and the recent strength for the Eurozone could be put down to that, therefore he may continue with the current measures.

I think a movement back towards 1.10 is possible in the next few weeks especially if Brexit talks appear to be progressing positively. What the latest developments do suggest in my opinion is that if you’re looking to sell Euros now might be the time to act.

If you do have a question with regards to my forecast please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me at brf@currencies.co.uk

Could we see further losses in September for the Pound against the Euro? (Tom Holian)

August 30, 2017 by Tom Holian

The Brexit fears are still weighing heavily on Sterling exchange rates with the Pound vs the Euro at its lowest level to buy Euros since 2009.

It was only during 2008 that GBPEUR exchange rates were lower than the current levels so anyone planning to send Euros to pay for a property in Europe may look at sending them in the short term as I think we could see further losses for the Pound.

Many major banks have already suggested that Sterling could hit parity against the Euro and the way the trend is moving I’m finding it hard to see where any support for the Pound could come from.

The Euro is now trading at its highest level against the US Dollar in over 18 months and has improved by over 10% since the start of the year against the US Dollar.

The European Central Bank has hinted that it may look at tapering its latest Quantitative Easing programme at next month’s meeting and if this takes place this could provide the Euro with even more strength against both the US Dollar and Sterling.

Many of my clients have been opting for a forward contract which allows you to secure an exchange rate for a future date for a small deposit. This has proved very successful for many Euro buyers over the last few weeks.