Tag Archives: GBP/EUR forecats
Is the recovery around the corner for GBP? (Ben Amrany)
So with the pound nicely rising against a basket of currencies we learnt yesterday that the governor of the Bank of England Sir Mervyn King felt that recovery for the UK economy is with in sight and that the weakening of the pound has gone low enough.
King who himself has recently talked the pound down has made a U turn and stated that he thinks “we are moving to a properly valued exchange rate. I think we’re probably there” This assisted sterling to rise over 1% against the USD, 0.72% against the Euro and we witnessed gains against the southern hemisphere currencies. If you would like to capitalise on these gains then please feel free to contact me at bma@currencies.co.uk and I can explain the options that are available to you.
You could be reading this article thinking that King’s comments could pave the way for the pound to start to claw back the average loss of 6% across the board this year. Playing devils advocate if the governor may think that an average of 1.15 against the Euro and 1.50 against the USD is the right level for the currency pairs then surely this gives the bank scope to try and devalue the pound as soon as it starts to strengthen!! For this reason I would not get too excited.
At present many of the central banks around the world are happy for their currency to remain weak as it will help their exports. I tend to call this a currency war. With political, economic and credit rating issues in the UK the pound has weakened all by itself with out the Bank of England having to re stimulate the economy with more quantitative easing (QE).
If the pound is able to gain further by the end of the month I would seriously consider securing your currency even if you do not require the funds immediately. We have different contract options like forward buying which can help you minimise your risk to volatile exchange rate fluctuations should you not have full funds available at present. This can give you the peace of mind that your funds will not weaken any more. If you would like information on this or any other contract that we offer then please do contact me with your contact details and I will explain all the options that are available to you.
If you have any specific target levels that you would like to be informed about for any of the major currencies then email me at bma@currencies.co.uk
Thank you for reading
Ben Amrany
Where Next for GBP/EUR Rates? (Matthew Vassallo)
Where Next For GBP/EUR Rates?
2012 has been quite a year for our most popular traded currency pair. It started with various analysts’ predictions, ranging from parity to 1.40 and I’m sure, as we enter 2013, their predictions will be just as bullish, and as potentially inaccurate.
Unfortunately, however, these predictions left many wondering who to believe, all the while reaffirming my belief that long-range forecasts, particularly on GBP/EUR, are
not all that beneficial. This is because the current economic climate in Europe and the UK is a constantly changing landscape and what is true today will not necessarily be true next week and almost certainly not true next month. Therefore, we need to be reactive to these market developments, without having a knee jerk reaction to any negative data that might be released.
Personally, I feel that whilst we continue to trade above 1.20, EUR buyers are probably doing a little better than they should be and it is important to remember that if you were to make a £200,000 GBP/EUR transfer today, you would receive an additional EUR 14,000, compared to the same transfer this time last year.
All those sitting on their positions and waiting for rates to return to the four year highs that we witnessed in the summer (1.2860), may wish to consider the relative state of our economy and our heavy reliance on the eurozone, as a trading partner and consider realigning their targets.
Sterling Could Struggle to Make Further Inroads Against the USD
GBP has performed well against the greenback since the summer, moving comfortably into the 1.60’s and providing USD buyers with some great opportunities, especially when you consider how fragile the UK economy has remained, during this period.
This week’s key economic data release was yesterday’s FED decision, where a new bond buying scheme was announced. Their aim is to keep US interest rates very low for the foreseeable future, at least until unemployment falls below 6.5% and inflation below 2.5%. This did see the USD lose some strength against both GBP and the EUR, as investors saw it as a positive sign for the global economy and moved funds away from the ‘safe haven’ USD.
Personally I feel that the USD will strengthen back towards 1.57/1.58, as we enter the first quarter of 2013 and the US economy slowly starts to recover.
GBP/CAD Forecast
GBP/CAD rates have been range-bound between 1.5720 –1.6121 for the past few months and this trend looks set to continue, with the Pound struggling to break through the 1.60 resistance barrier over the coming months.
Many analysts believe the Canadian economy has weathered the current global financial crisis better than any other country, primarily due to the high demand for their exports, including their vast oil supplies.
This market uncertainty not only creates issues for high end investors, but also for anyone looking to move funds for a foreign property purchase, or indeed those looking to repatriate
their funds into the UK, following a sale. We have over twelve years’ experience of navigating the currency markets and providing over 45,000 clients with award winning rates of exchange and customer service. If you would like to find out what rates we can offer, or have any market queries, then please feel free to contact me directly at mtv@currencies.co.uk or call us on 00 44 1494 787 478.
What will happen with the pound in the lead up to the Bank of England interest rate decision next week.
Good morning readers,
Over the last couple of days sterling exchange rates have been fairly flat with a spread of around half a cent against the Euro, 1 cent against the USD and a couple of cents against the Aussie & Kiwi Dollar. The inactive pound seems to have stabalised due to the fact that we have not had any significant changes in economic data over the course of this week.
Today sees a day that could potentially change this when UK GDP is due out at 9.30 this morning. This is the final figure for Q1 of this year and we are expected to see that the UK economy contracted by -0.3%. Now if this final figure should deteriorate further expect to see the pound get knocked off its perch. This morning we have already seen Nationwide housing prices showing that prices fell by 0.6% this month and prices are down by 1.5% from this time last year. Sterling has slightly reacted by weakening against the USD, CAD, AUD, NZD & ZAR.
Looking forward into next week the market will be eagerly anticipating what will come out of the Bank of England interest rate decision next Thursday. At the last meeting there was a 4/5 split on voting for more quantitative easing (QE). If other data comes out negative for the UK then this may swing the vote in favour of initiating more QE. We all know what this can potentially do to the state of the pound. If you are not aware you should be slightly concerned and you can email me at bma@currencies.co.uk and I will explain the full implications.
Over the last 2 years the interest rate decision has been a bit of an anti-climax for the UK. With rates being left on hold at 0.5% since the start of the financial crisis. This week the Govonor of the Bank of England Mervyn king stated that if things do not start to turn around with the economy soon they would not be scared to reduce interest rates further. In the past we have stated that a countries currency can significantly strengthen or weaken when their central bank raises or lowers the interest rate for the country. If Mervyn King does decide over the coming months that interest rates should be lowered by 0.25% then I would expect the pound to weaken against most of the major currencies. This should be a big concern for most of you that are holding out for the pound to rise up further against the Euro and a host of other majors.
Against the Euro in general I have had some clients who have stated that they feel the pound may go a little higher. Every day I am watching the rates and the pound is really finding it hard to push pass the 1.25 level and stay above it. If there is a movement by the Bank of England to reduce interest rates, or initiate further QE then the pound could really weaken. The worst that could happen would be for both to be done at the same time. If you have a requirement to buy or sell the pound then the outcome of these meetings could significantly weaken or strengthen your requirement. You are free to email me with your exact requirement at bma@currencies.co.uk and I will discuss all the options that are available to you to help you minimise your risk to volatile exchange rate fluctuations.
UK Banks Downgraded as Euro Optimism Returns
Friday has witnessed a fairly static day on the markets following an otherwise volatile week. We have seen the uncertainty surrounding Greece subside, as the formation of a pro bailout, co-alition government has brought some much needed confidence back to a sceptical market. The single currency has struggled to make any inroads of late, as the high levels of debt and rising unemployment across the region have only added doubt to the long-term stability of the eurozone.
What is now becoming apparent is that leaders are now trying to provide long-term market confidence by easing fears that Greece, Spain and Italy are for want of a better phrase ‘beyond the point of no return’. It is clear that investors need to be convinced that one, the EU can find the necessary balance between austerity and growth and two, integral countires like Spain and Italy do not find themselves in a position where they default on their debts and ulitmately exit the eurozone. The major fear if this scenario were to materialise is that it will create a domino effect, that may ultimately cause the end of the EU as we know it.
Overnight news filtered out that three major UK banks had been downgraded. This announcement followed fears that further Quantitative Easing in the UK was on the cards, as falling inflation and shrinking growth forecasts were becoming too big a problem to ignore. The need for further QE has only highlighted the on-going exposue we have to the economic problems in Europe and once the news is digested I do feel we will see GBP fall off against the EUR.
If you have an upcoming currency requirement or would like to eb kept up to date with all the latest market movements, then please feel free to contact me directly at mtv@currencies.co.uk or on 01494 787 478.
