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Exchange rates tumble as the wind is taken out of any sterling gains – Buying euros, Selling Euros, GBPEUR Forecast (Steve Eakins)
Rates of exchange this week have changed dramatically with GBPEUR rates down almost 2%. This movement adds over £2,500 to a €150,000 purchase. As mentioned in my previous blogs this week the expectation was for a fall. In summary due to comments from the next Bank of England Governor, lower UK Inflation figures and the Bank of England minutes, the likelihood of further QE in the UK has increased greatly. Plus with UK Retail figures being hit by bad weather last month, the UK Government borrowing more money than expected and the IMF saying that the UK is not far away from a recession rates have tumbled. So great news for Sterling buyers however bad and expensive news for anyone with any euro exposure.
So when do I buy euros?
In the short term I cannot see much of an improvement, Wednesday next week will probably be the best day next week due to the data expected to be released from Germany and Europe. However I think it is unlikely to gain back up to the highs seen at the beginning of this week. I think GBPEUR could fall below 1.16 before it breaks 1.19.
Longer term again I can’t see too much reason to be positive, can you? The UK news has been fairly negative and there is a growing probability of more QE which would push prices further down. What euro buyers will be looking for is the next crisis from Europe as that will weaken the euro making it cheaper to buy, but is that probable?
A majority of Europe is now in a recession. Germany the power house of Europe with almost a 3rd of the whole economic output of the entire single currency only just avoided entering a recession with 0.1% growth. (This was confirmed this morning.) It seems that both politically and economically Europe has recognised that growth is desperately needed and that this will only come from new jobs. So in turn expect policies and tax breaks to be introduced to try and incentivise growth and foreign investment. When we see this their forecasts will probably improve and in turn the euro could strengthen. Bad news for any euro buyers.
Currently there does not seem to be many reasons for a euro buyer to be positive about the potential future of the GBPEUR pair…..
If you’re considering making a currency transfer and want to ensure you’re getting a competitive exchange rates when buying euros or selling euros then get in touch for a free quote – Steve Eakins – hse@currencies.co.uk
Pound strength following King Speech (Steve Eakins)
Today, which is probably the busiest day this week has already provided a few surprises. It was this morning confirmed that France has re-entered a recession creating euro weakness, UK Unemployment is improving and then currently the current Governor of the Bank of England, Mervyn King, in his last speech seems to be talking the value of the Pound up. In summary GBPEUR rates have now risen from the 2 week low at the beginning of the day towards a near 4 month high we last visited 4 weeks ago.
So what next for GBPEUR exchange rates?
Near future – EURO buyers may want to hold off till tomorrow when we have the last big data release for GBPEUR this week when the Eurozone confirms their Consumer Confidence figures for April. The expectation is for this data to show a contraction so rates may climb further for GBPEUR following this news which is released at 10 am BST. Euro sellers may want to move before hand as a result.
Medium term – Next week we have UK Production Price Index, UK Retail figures, Bank of England minutes, UK GDP figures and UK Mortgage approvals. Expectations for these releases will be more concrete on Monday so keep reading here for the latest forecasts and updates on these releases. This should help highlight potential buy and sell opportunities when it may be the best time to trade through next week.
Longer term – A lot hinders on the new Bank of England Governor Mark Carney that starts his post at the end of June. He may want to come in with an instant impact changing interest rates or the current asset buying program. It may the beginning of July when we see this and is already expected to be an interesting event that may give direction to exchange rates for the following few months.
If you are in the currency market and are interested in a more personal view on how the above events could affect you, feel free to contact us on the normal number (01494 787 478) or myself personally, Steve Eakins via email at hse@currencies.co.uk
GBPEUR rates, ECB interest rate dropped, when to buy (Steve Eakins)
GBPEUR rates climbed again this week following the news and commentary that the European Central Bank are open to lowering their interest rates in the coming months. Mario Draghi stated that he was open to negative interest rates for over night holding of funds for banks which created the negative tone for the euro, giving buyers the chance to buy euros at the near high experienced last week of a 4 month high. SPIKES do not hang around for long and it is these kind of opportunities that have to be taken to get the best price; after all we only know it was the highest point on the market once it starts to fall again.
If you would like SPIKE NOTIFICATIONS register your interest via email at hse@currencies.co.uk with your contact details, currency pair, volume and information to do with the availability of funds and time frames.
So what next for GBPEUR rates? When to buy euros?
Well it is safe to say that recent news for the pound has been very positive in comparison to the negative outlook over the last few months, which has attributed to why we are at these highs however it will be data to come that will drive levels in the future.
Monday is a bank holiday for the UK but that is not to say that markets will not move. The Europeans release their Retail Figures which are expected to fall and a further speech from Mario Draghi is also expected. His tone this week has been fairly negative for the euro so buyers may wish to wait till next week to make their move. Sellers may however want to move before this and contact us today – don’t be scared to ask for a quote – email hse@currencies.co.uk with your details.
The biggest news for next week in my opinion is the Bank of England Interest rate decision on Thursday. Over the last few months there has been a building impression that more QE could be seen form the bank but we are yet to see it. If we were to see this be announced I would expect rates to drop as the value of the pound falls, by perhaps as much as 1.5 cents adding a £1,600 to a €150,000 purchase. I however think that QE is unlikely to be announced until next month.
If you want to discuss how the next week could affect your currency exposure then speak to the experts by contacting us to go through it more personally. Either call and ask for myself Steve Eakins or email me directly at hse@currencies.co.uk
GBPEUR rates wobble but will an interest rate change GBPEUR forecasts (STEVE EAKINS)
Following the UK avoiding a recession late last week rates spiked up to the highest seen since the end of January. By definition a SPIKE does not last for long and these levels were slowly taken away through Monday and Tuesday trading. Many clients managed to benefit of these spikes following their registration to the SPIKE NOTIFICATION service here. (If this is of interest simply send your contact and transfer details to hse@currencies.co.uk)
But what next for GBPEUR rates of exchange?
Well the next focus point is the European interest rate decision which is released on Thursday afternoon. There is a view that rates may be lowered following pressure from countries trying to balance their debt burdens, Germany’s economy becoming sluggish and inflation falling across the single currency. There are two views in the market as to what would happen if they were cut from the current record low of 0.75% to 0.5%. Firstly traditionally when an interest rate is cut drops investors’ appetite so there is less demand and therefore weakens that currency. The second is that as in this case the suggested drop is so small, it could be seen as a proactive move and actually drive investment making the euro more expensive to buy.
I think the latter is more probably personally, however I am also leaning towards them not actually lowering rates this week. Either way the release will be key for ANYONE with a currency transfer to make as the Governor of the European Central Bank will be taking questions on the matter driving rates over the press conference so make sure you are close to a computer or have a broker actively keeping an eye on your situation as the news breaks. To put this event into contents it could move the markets by upwards of 1.5 cents adding £1,700 onto a €150,000 purchase.
If you would like to keep up to date on the event or to talk through how this could affect your currency exposure, speak to the experts. Feel free to get in contact with myself or the team here. My name is Steve Eakins and I am one of the elite traders here. Call on the normal number or email me directly at hse@currencies.co.uk
GBPEUR rates anticipate GDP figures tomorrow, currency news, buying euros, selling euros, pound sterling forecast (Steve Eakins)
Regular readers will be well aware of the potential market moving release tomorrow morning. UK GDP figures are released first thing at 9:30 which will confirm whether or not the UK is back into recession. Before large releases like this the market moves to price in the expected result, in this case this happened in yesterday’s trading when GBPEUR rates climbed to a 2 week high.
So what next for exchange rates?
How will GDP effect GBPEUR exchange rates?
Well as the market seems to have priced in the expectation that the UK has avoided a recession by a cats whisker if the true figure comes out as expected I don’t imagine we will see rates move much, it might climb by 0.25% but I think it would be unlikely to see anything more. If the figure comes out negative and the UK returns to a recession I would expect a big fall, potentially cents which would add a significant cost for any euro, dollar buyers. The last potential outcome, however doubtful is if the figure comes out better than expected, showing a growth of 0.3% or higher. In this situation I would expect rates to climb significantly.
If I was a client looking at moving money within the next fortnight I would certainly be aware of tomorrow and have a plan in place ready to take any advantage, limit any loss or to shrink my exposure. When this news breaks out the markets will move very quickly so if you are looking at trading on the event make sure you are in a position ready to go beforehand. Register for SPIKE notifications by contacting us here via email hse@currencies.co.uk with a summary of your situation and full contact details.
Here we trade over 30 currencies and have a number of awards for our exchange rates. Simply put if we could not save you money we would not be in business! To find out more about the specialist currency service we provide, whether you are a private or corporate client, then we can help. Please get in touch either on 01494 787478 or by emailing me with a brief description of your individual requirement and I will happily contact you and run through your options. You can reach me direct at hse@currencies.co.uk
Buying euros news, best exchange rates, when to buy, when to sell? (Steve Eakins)
Currency exchange rates have had a bit of a “blip” this week or a SPIKE allowing euro sellers to trade at a 6 week high. It is these SPIKES that often achieve the best price in the market but you have to move quickly to catch them as they don’t hang around for long. A Spike in the market is when some surprising information is released which moves the markets quickly and by a large amount. Unfortunately most recent SPIKE has now ended and the rates have started to return to the level seen over the last 5 weeks.
These spikes do not happen often and when they do it is only the clients with funds available that can normally take advantage. I am of the thought that there will be other spikes through the month of May due to key data being released from the UK with regards to the potential of the UK economy falling into a recession and the Eurozone maybe lowering interest rates. So if you need to move currency internationally register for SPIKE notifications via email at hse@currencies.co.uk
What next for currency rates?
Many euro buyers have been waiting for rates to climb back over 1.20 that we saw last year. Which may or may not happen. The facts still remain that the UK is growing at near zero percent, Unemployment continues to climb, consumer spending is still very low, and there is no real signs of any improvement in the near future. We don’t have an Olympics or a royal wedding to pin our hopes on. This week we have even seen the International Monetary Fund comment that the UK is at risk which is a view also shared by the next Governor of the Bank of England. So in the medium term I expect rates to fall.
The good news however is that rates do not move in a straight line and there are events in the near future that could help euro buyers:
- Next Thursday we have the UK GDP figures being released, this should confirm that the UK avoided a recession. I expect this to improve prices at the time by maybe a cent – saving clients £1,500 on a €200,000 purchase.
- The week following we have European Interest rate decision. There is a possibility that they will cut interest rates which could push exchange rates up for euro buyers, maybe by 1.5 cents – saving clients £2,250 on a €200,000 purchase.
To find out more about the specialist currency service we provide, whether you are a private or corporate client, then we can help. Please get in touch either on 01494 787478 or by emailing me with a brief description of your individual requirement and I will happily contact you and run through your options. You can reach me direct at hse@currencies.co.uk
Register for SPIKE NOTIFICATION or a RATE ALERT simply email me Steve Eakins at hse@currencies.co.uk with your details.
Buying euros, selling euros, best time to buy, best exchange rates (Steve Eakins)
Exchange rates continue to be range bound between 1.165-1.18 this week which may only seem like a small difference, however on a purchase of €200,000 timing the trade well reduces your costs by nearly £2,200. An amount equal to average monthly earnings in the UK before tax is deducted, bills are paid and the car is filled up. What I am trying to highlight is how important it is to buy currency effectively and to time your trade! Here we provide a pro-active service helping clients do just that. Either using the SPIKE NOTIFICATION or the RATE CATCHER service you could save too. Register for either service by emailing me at hse@currencies.co.uk
What next for exchange rates, which way are they heading?
I am still of the view that rates are more likely to fall rather than climb against the Euro, a contrast to Ben’s blog below. I think that even though the UK is improving we are still at near zero growth and only a cats whiskers from re-entering a recession. In comparison the Eurozone is growing at a faster rate and even though they are going through a process of economic review, which is raising some concerns, I believe that these concerns will be solved and euro strength will return. Cyprus have now confirmed they are selling some of their own gold reserves adding more confidence that the issues there are subsiding. Portugal and Ireland are currently negotiating an extension of their bailout to make their respective economies more healthy which can only be a good thing for Europe, right?
Tomorrow and over the weekend we also have the G8 meeting that will probably cover European debt concerns. My view is that the European states will probably again use it as a sales opportunity create some strength resulting falls early next week. Buyers may as a result want to move sooner rather than later or at least limit their exposure.
Here we achieve our clients a saving over that of their current providers, whether that be their own bank or another broker. Simply put if that was not the case we would not be in business so we are very confident we will be able to help you if you are in the markets.
Contact us today to see how much you could save, either call the normal number and ask for myself Steve Eakins or contact me directly at hse@currencies.co.uk
