Tag Archives: GBPEUR
Sterling strength expected later in the week, Euro and Dollar sellers should be looking to act soon (Joshua Privett)
It’s been a fairly uneventful beginning to the year on the currency markets, with Sterling exchange rates against the Euro and the US Dollar moving heavily each day, yet by close of business we’ve tended to find ourselves back where we started.
GBP/EUR has reamined around the 1.16/17 mark, GBP/USD has held quite firmly at 1.23, and GBP/AUD around the 1.68-1.70 range.
This exchange rate behaviour is indicative of a market awaiting some very important news.
I hate to flog a dead horse for our regular readers by continuing to address the upcoming Supreme Court decision and the implications this will have for the Pound, but it is incredibly pertinent to anyone planning to buy or sell Sterling for a foreign currency. Not just over the next few weeks as we await the verdict, but over the next few months in the run up to the triggering of Article 50.
For those who are not aware, the Supreme Court is currently ruling an appeal of November’s Judicial Court decision to allow Parliament to vote on the enactment of Article 50 – the formal process to leave the EU.
As in November, financial markets should react well to the decision to involve Parliament in the Brexit process. The Pound’s value increases with investors gaining confidence that Parliament’s involvement will mean the Brexit process will be delayed to some degree due to cumbersome Parliamentary procedures, and that this increases the likelihood of a softer exit from the EU.
You can also argue that Parliament’s involvement means that the aims of the negotiations and how well they will progress will be much more public. This permits greater confidence to invest in the Pound as investors and financial institutions will have a greater understanding of what trajectory the UK economy, and therefore the Pound, will be taking in the medium-term.
The expectation is that the Supreme Court will uphold the initial conclusion of the Judicial court a few months ago. Based on November’s currency movements, this will likely cause 1-2 cent improvements on GBP/EUR, similar gains on GBP/USD, and likely larger positive spikes on GBP/AUD due to the volatile nature of the currency pairing.
The verdict is expected between the 12-17th of January, so if you are a Euro or Dollar seller, it may be wise to move ahead of this coming Thursday to avoid being caught up in any sudden and unannounced spikes in Sterling value when we are told the decision.
Furthermore, on Wednesday data sets for manufacturing and industrial sectors of the UK economy, and a first look at growth for the final quarter of last year, will be released in the morning for markets to react to.
The manufacturing sector has enjoyed a resurgence following the sudden devaluation of the Pound in June, and growth in the UK economy has shown on mutliple occasions since the June vote to Leave the EU to be resiliant to the economic shocks this had entailed.
So, in short, very good news is expected to be provided to Euro, US Dollar and Australian Dollar buyers in the short-term. Two major events are expected to make your transfers more profitable, which is why anyone looking to conduct a Sterling purchase, even over the next few months, should look to how you can secure these still historically favourable exchange rates before Wednesday.
If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well be worth your time getting in touch with me on email@example.com in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.
I have never had an issue beating the rates of exchange on offer elsewhere, and these current exchange rates can be fixed in place for anyone wanting to prebook their currency transfer later in the year at current exchange rates.
What you need to know about Brexit and the impact of Brexit on exchange rates
Throughout 2016 ‘Brexit’ was the main talking point for sterling exchange rates and I expect this trend to continue for at least the next two quarters.
When the UK public voted out of the European Union the consensus was that the UK would also be leaving the single market.
However the High Court ruled UK Prime Minister Theresa May does not have the power to invoke Article50 and therefore leave the single market.
The Prime Minister disagreed with the High Court ruling and last month took her case to the Supreme Court in hope that the decision will be overturned. The verdict is set to be released some point this month.
It’s important to realise Brexit is complex, however if you are buying or selling pounds in the upcoming months we have seen trends over the last 7 months that should help your decision making.
When the UK voted out of the EU in June and as a country we were under the impression we would exit the single market GBPEUR and GBPUSD plummeted to lows of 1.10 and 1.2190.
As soon as the High Court ruled that an exit from the single market will occur once Theresa May has approval from Government (very unlikely this would materialise) GBPEUR and GBPUSD increased to highs of 1.2015 and 1.2750.
Looking ahead to the Supreme Court decision this month, I believe there are two outcomes to exchange rates once we hear the verdict.
If the Supreme Court rule in favour of the High Court an exit from the single market becomes unlikely and therefore the pound makes gains against all of the major currencies.
If the Supreme Court overturn the High Court an exit from the single market could occur as early as March and therefore the pound plummets to lows we saw only 3 months ago.
How can I help you?
The currency company I work for enables me to achieve clients rates of exchange that they won’t be able to achieve by using their own bank.
Property purchases and sales are my area of expertise, therefore if you need to purchase a foreign currency or you are about to complete on a sale abroad, today is the day to get in touch to discuss your options and to get an understanding of how we can save you as much money as possible.
When purchasing currency it’s crucial to analyse both the currencies you will be trading, as your 2nd currency will also have an impact on the pair.
Feel free to email me the currency pair you are converting (GBPUSD, GBPAUD, GBPCHF etc) the reason for your conversion (company invoice, buying a property) and I will email you with my forecast for the currency pair and the process of using our company firstname.lastname@example.org.
** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **
Since the start of November GBPEUR central exchange rates have increased from 1.1060 to 1.1950. Therefore a €200,000 purchase is now £13,467 cheaper.
The reason for the rise is that the High court in the UK ruled that Prime Minister Theresa May does not have the power to invoke Article50 and therefore start the process of leaving the EU. This means that investment has re entered the UK as remaining part of the single market is now an option.
As for the Eurozone the Central Bank have announced they will be extending the Quantitative easing program and will be therefore injecting another 540 billion euros into the economy to stimulate growth.
This week the Federal Reserve (US central bank) raised interest rates from 0.5% to 0.75% and analysts at ING are predicting EURUSD exchange rates could reach parity. If this occurs I expect the pound will then make further gains against the euro and GBPEUR exchange rates will finish the year in the low 1.20s.
Looking ahead to next year the major talking point will be the Supreme Court decision in January. If the Supreme Court rule in favour of the High Court I would expect to see the pound remain buoyant at levels we have become accustom to throughout December. However if the Supreme Court overturn the High Court, I expect the pound to crash as an exit from the single market will be on the horizon.
The problem euro buyers and sellers have is that it’s very difficult to predict the Supreme Courts verdict!
If you are buying or selling euros in the upcoming months and want to achieve rates of exchange that are better than your bank, whilst receiving regular economic information feel free to email me with your requirements email@example.com or call the trading floor Monday morning on 0044 1494 787478 and ask for Dayle Littlejohn.
If you are trading a currency pair that I have not covered, feel free to email me with the pair (GBPUSD, GBPAUD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is firstname.lastname@example.org and I look forward to receiving your email.
Pound sees tentative rises for buying Euros and Dollars ahead of the thinner trading of the Christmas period (Joshua Privett)
Buying Euro, USD and Australian Dollar exchange rates have shown a noticeable uptake ahead of the Christmas period with rates above the 1.19 level on GBP/EUR, and above 1.70 on GBP/AUD being realized ahead of markets closing for the weekend.
The gains against the Euro and Australian Dollar in particular this week were due to a lower demand for these currencies which sucked away some of their recent, and frankly over-inflated, value. The clear driving force behind this movement is attributed to the historic rise in interest rates in the US, only its second time the FED have been do so since the financial crisis.
The USD/EUR currency pairing is the most heavily traded in the world – frankly because they are the two most widely used currencies globally. So as a rule of thumb, due to the large amounts of transfers and exchanges concentrated between the pair, when one of the two currencies suddenly gets a large boost in demand, as we saw this week, the other loses value through a corresponding slackening in demand. This is why GBP/EUR briefly managed to maintain its vantage point above the 1.19 level.
The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% as an unfortunate example. However, it is traditionally seen as an unstable currency due to its links to the commodities market, so when you have a safe-haven currency which raises its base interest rate rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD – tipping over the 1.70 level for the second time this week.
Moving forward however, Euro and Dollar buyers have the phenomenon of profit taking to deal with as unusual end of year market forces take hold of exchange rates over the next few weeks.
At the close of the year, and what a year it has been, traders have to consolidate their profits in a stable currency for the rough 2-week period when they are away from their desks. This protects their capital from any adverse movements in what are normally ‘safe-haven’ currencies, so that when they come back to the desks the amount of capital they are managing hasn’t been worryingly eaten into. Of course the Pound is anything but stable at the moment and will likely suffer in the sell-off that ensues.
As such anyone with a buying Euro or Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.
Since Trump became President in November, Euro buyers have gained over 11 cents in the marketplace for GBP/EUR and 10 cents on GBP/AUD. Meaning that in real terms on a £100,000 transfer buyers have gained an additional €11,000 or $10,000 in the space of 6 weeks. Understandably, the popular option at the moment is to consolidate those gains.
The turn of the New Year has many forks in the UK and therefore the Pound between January and March which are difficult to account for ahead of time, and markets will be factoring this in to the price of Sterling moving forward which could end up being expensive for anyone with a planned Euro or Dollar based obligation to meet in the New Year.
Sterling buyers of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.
If you are planning to make a currency exchange involving the Pound and a foreign currency, it’s well be worth your time getting in contact with me on email@example.com over the weekend in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on a prospective transfer.
Rollercoaster day for Sterling points to heavy ceiling for buying Euro and Dollar exchange rates (Joshua Privett)
Today buying Euro rates breached fresh 5 month highs in addition to more attractive levels for Australian Dollar buyers following the historic interest rate decision last night across the Atlantic in the US.
This was only their second rise in interest rates in over a decade. In the world’s largest economy, there was certainly going to be financial ripples as a result.
The obvious and direct result was that for anyone holding Sterling the Dollar become more expensive following the rate hike announcement.
But why did the Euro and Austrlian Dollar take a bit of a dive?
The USD/EUR currency pairing is the most heavily traded in the world – frankly because they are the two most widely used currencies globally. So as a rule of thumb, due to the large amounts of transactions concentrated between the two, when one of the two currencies suddenly gets a large boost in demand, as we saw today, the other loses value through decreased demand. This is why GBP/EUR briefly breached 1.20 earlier today as a secondary effect of the hike.
The gains against the Australian Dollar similarly were due to a lower demand for AUD which sucked away some of its recent, and frankly over-inflated, value. The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% for example. However, it is traditionally seen as an unstable currency, so when you have a safe-haven currency which raises its base rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD.
However, markets moved back sharply in the afternoon following this move, with GBP/EUR almost losing a full cent as an example.
It seems markets are worried the recent improvements on Sterling will not carry through the volatile end of year trading period. At the end of the year traders and companies wind down their positions in order to consolidate their profits in a stable currency to avoid coming back to their desks in January and finding outside forces have eaten away some of its value.
Of course the Pound is seen as anything but stable at the moment. So the Pound seems set to lose out to major safe havens such as the Dollar, Swiss Franc, and potentially the Euro, however, more exotic currencies should still see it hold its own.
As such anyone with a buying Euro and US Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.
Sterling buyers, of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.
I am well positioned to help anyone with a Sterling based currency requirement manage their exposure to the markets in the run-up to the new year and beyond in order to maximise your currency return in this volatile marketplace.
Contact me overnight on firstname.lastname@example.org to discuss the particulars of your transfer. I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on an upcoming transfer.
You can also contact me on 01494 787 478, and simply as the reception team for Joshua (me) and they will put you through to my line.
This evening the Federal Reserve will release their latest interest rate decision. It was 12 months ago to the day when the FED decided to hike interest rates from 0.25% to 0.5% and on the 12th month anniversary many economists believe a hike is inevitable.
If the US do decide to hike interest rates speculators should flock to the US dollar to make profit from their investments and therefore I expect GBPUSD (cable) to fall.
As for GBPEUR exchange rates, EURUSD is the most commonly traded pair and a general trend is that if one currency strengthens then the other weakens. Therefore we could see the pound make some gains against the euro if Chairlady Janet Yellen decides to hike.
Looking ahead to next year, the Supreme Court decision for the UK could put pressure on the pound and therefore exchange rates could fall. For people purchasing a foreign currency next year the safe option is to purchase upfront.
If you are buying or selling the pound in the upcoming months UK Prime Minister Theresa May’s March deadline to invoke Article50 should have a major impact on the exchange rates you will receive. Feel free to email me with the pair (GBPUSD, GBPEUR, GBPAUD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is email@example.com and I look forward to receiving your email.