Category Archives: Sterling strength

Sterling Euro awaits UK GDP (Tom Holian)

Sterling Euro exchange rates have been trading in a tight range today as the market takes a breath before the announcement of UK GDP figures due out at 930am tomorrow morning.

Expectations are for a 3% rise and any change could result in GBPEUR volatility. Personally, I think we could see Sterling strength in the morning.

Arguably just as important will be the announcement of German unemployment due on Thursday morning. As the Eurozone’s leading economy any negative result could see Euro weakness.

ECB President Mario Draghi’s comments last Friday saw Sterling gain by as much as 1% against the Euro or an extra £500 on a currency transfer of £50,000.

Draghi suggested that the ECB may intervene in buying up government bonds in order to encourage the banks to buy riskier assets and get consumer spending again. This will likely help the Eurozone but in the short term this could be detrimental to the Euro.

Eurozone growth has stalled recently and with worrying low inflation rates it is only a matter of time before the ECB acts.

If you have a currency transfer to make and want to save money on exchange rates compared to using a bank then contact me directly. Tom Holian teh@currencies.co.uk

 

 

 

Best Rates of Exchange – When to Buy or Sell Currency? (Andrew Bromley)

Buy Euros Now? Stagnant Pound?

Sterling has been ‘range bound’ of late, with highs and lows being circa 1.2425 – 1.2650. Today had German GDP data at 07:00, which came out as expected at 1.2% and further highlights a lot of economists belief that the Germans are going nowhere fast! On the other side of the currency pair UK Mortgage Approvals came in slightly lower than expected at 37,100 against an expected figure of 38,500. Last month the figure released was 39,300 so this reduction is not good news for Sterling. Those holding GBP EUR will need to be wary of the UK GDP ‘1st revision’ tomorrow which is the re-release of last months GDP figure, taking in to account any data revisions during the month passed. If the UK GDP is revised down from the 3% figure released then expect immediate Sterling weakness, potentially down to the 1.24 level of support. On the other hand if the figure is revised up then expect to see Sterling test the 1.27 level. If you have an exchange to do and you’re not sure how to play it – please feel free to get in touch using the contact details below!

USD Romp – Buy USD Now?

My opinion on timing for the purchase of USD would be to get the currency bought ASAP! The greenback took a huge amount of strength from the conclusion of the bond buying (Quantitative easing) and seems at home in the 1.50s. I think that as international commodities are weak (Iron Ore, Gold, Oil) investors will be keen to keep their funds in the safe haven currency (USD). This will keep USD strong and subsequently, I don’t feel that USD buyers will see a figure much stronger. I would be inclined to buy sooner rather than later in this position. This afternoon has US GDP and Consumer Confidence (13:30 and 15:00 respectively), you may see movement at this time.

As mentioned, please feel free to drop me a line if you do have an exchange to book. The direct line to the trading floor is 01494 787 478 or email me AJB@currencies.co.uk

Sterling Strength thanks to Mario Draghi (Tom Holian)

GBPEUR exchange rates took a massive lift on Friday following the comments made by ECB President Mario Draghi.

Sterling improved by over 1% during Friday’s trading session against the single currency as the news shocked the currency markets.

Mario Draghi gave his biggest hint yet that purchases of government debt could help the struggling Eurozone. The idea of purchasing the debt is aimed at increasing prices for riskier assets which would free up more money for capital purchases and ultimately get more people spending.

Falling inflation is the biggest risk to Eurozone growth and this could now come as early as next year. Indeed, Draghi went to say ‘the central bank would do what we must to raise inflation and inflation expectations as fast as possible.’

In my previous reports I have been concerned that Sterling has remained too high for too long as it’ll ultimately affect the British export market. However, my viewpoint has slightly changed, at least in the short term, as the comments from Draghi will undoubtedly weaken the Euro.

UK Retail Sales out last week were also much better then expected at 4.3% compared to the anticipated 3.8% which led to Sterling gains and since the middle part of last week Sterling has gained against the Euro.

If you have a currency transfer to make and want to save money on exchange rates compared to using your bank then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

 

GBPEUR rates finally stop the negative trend – STEVE EAKINS

Sterling has generally been falling for the last two weeks but we have seen some light relief in its value against the single currency this week. The only good thing to take away from this week seems to be that we have finally seen the Pounds value establish a range and some barriers. Levels now seem to be set around the 1.245 – 1.255 a staggering 4 cent drop from the highs seen only 2 weeks away.  This hold came from UK Retail figures which exceeded expectation and European data that missed them on Thursday morning.

Regular readers will probably still recognise that current levels are still ok in comparison to the months gone by, ignoring the last 60 days levels are at a year and a half high which many over the last 18 months would happily have bought at. To be honest I think these levels are now established and unlikely to change in the coming weeks.

 

Mario Draghi, the head of the European Central Bank is also speaking this morning with a change expected in the market. Comments on QE and growth in the troubled states of France and Germany will be closely looked at

 

Next week economic data which generally drives the market is rather light as we enter the last week o the month, economic data is normally for the previous month so is published at the beginning of the month. Political drive has now started to show its effects on the currency market and eyes are on the Autumn budget on the 3rd December to see how this plays out. Plus the bi-election last night where the the out-right party UKIP won their second seat in government.

 

I see anything over 1.255 as a buy for the rest of November but am becoming increasingly wary that rates could fall further longer term before the end of the year.

 

For a chat about the above please feel free to get in contact. Call me on the normal number or email myself directly, Steve Eakins at hse@currencies.co.uk

How well do you really understand what is driving your exchange rate?

The pound looks likely to rise against most of the major currencies longer term as the UK appears likely to raise interest rates in the future. This is important because the raising and lowering of interest rates by a central bank greatly affects the strength or weakness of a currency. Understanding this fact – that the raising and lowering of interest rates greatly affects the strength and weakness of a currency – is key to predicting where exchange rates are headed.

One of the major reasons for GBP strength in 2014 is high expectations the UK would raise interest rates in 2014. This expectation has been pushed well back into 2015, if not 2016 and anyone holding on for this to happen to make an exchange had better have a long time to do so! I remember in 2012 we were almost in an identical position , with expectations high the UK would raise interest rates in the coming year or two. We then had the Eurozone crisis deteriorate (remember Greece on the brink of leaving the Eurozone) and the following Spring the UK entered a triple dip recession and the pound crashed from 1.24 to 1.14 in about 6 weeks!

I do not think we are likely to see such a sharp move but with the General Election and increased political uncertainty on the cards for 2015 a tough patch for the pound appears highly likely. Even though May 2015 seems many months away it is not actually that far in terms of exchange rates. Considering you have seen anywhere from 5-15 cents movement per year for the last few years on GBPEUR, making some plans now for currency in the new year is clearly sensible. 

We offer a range of contract options to fix exchange rates at currency levels and also to automatically purchase when a desired rate is hit (stop / loss and limit order). Speaking with or emailing us with a brief outline of your situation carries no obligation. We are currency specialists who are here to assist in the safe planning and execution of your transfers.

The real risk on exchange rates is doing nothing and leaving it all to chance so to learn more please contact me Jonathan on jmw@currencies.co.uk,

I look forward to hearing from you.

Thank you,

Jonathan

Sterling gets a Lift? (Tom Holian)

With inflation falling below the Bank of England’s target there was an outside chance that the minutes from yesterday’s BoE meeting could have been different from the previous month.

The minutes showed that 7-2 were in favour of keeping interest rates on hold which led the Pound to strengthen marginally against the Euro during yesterday’s trading session.

This morning German manufacturing data has come in a lot worse than expected which has sent GBPEUR rates above 1.25.

In a few minutes UK Retail Sales data is due out and the expectation is for growth of 3.8%. Anything higher could keep Sterling strong against the Euro.

French economic growth has been struggling recently and questions are being raised as to whether the French are taking their situation seriously enough. With growth on the continent struggling there is still a chance that the ECB may intervene with monetary policy at next month’s meeting which could result in Euro weakness in the longer term.

US Inflation data is published at 130pm today and as the world’s leading economy if the data is positive this could result in Dollar strength which often results in Euro weakness.

If you have a currency transfer to make and want to save money on exchange rates then contact me directly for a free quote. Tom Holian teh@currencies.co.uk

 

 

GBP/EUR Volatility Likely to Continue (Matthew Vassallo)

It’s been a volatile few days for Sterling exchange rates, with the Pound losing value against both the EUR & USD. This negative trend was created following last week’s UK quarterly inflation report and the suggestion that UK interest rates were unlikely to be raised until the last quarter of next year, news which immediately knocked investors’ confidence in the Pound, pushing it back below 1.25 against the EUR and below 1.57 against the USD.

This morning we had the latest Bank of England Minutes and it was interesting to note that despite last week’s indication that UK interest rates would not be raised anytime soon, two members of the BoE still voted in favour of one now. This news has helped to push GBP back up to 1.25 against the EUR and with Eurozone Construction data coming in worse than expected we could see further gains for the Pound during Wednesday’s trading.

There is likely to further movement on Cable rates this evening as we have the latest Federal Open Market Committee (FOMC) minutes, which are usually a key market mover. These minutes give us an insight into the economic and financial conditions of an economy and can be used as a benchmark for their recovery process.

It is another busy day on the markets tomorrow, with the latest UK Retail Sales figures and Eurozone Consumer Confidence figures. We also have a host of US data, including the latest inflation & employment figures, before ECB president Mario Draghi’s speech on Friday.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on mtv@currencies.co.uk

GBPEUR worst week in 2 1/2 years

GBPEUR levels have been falling continually for almost a week. Last week GBPEUR had its worst week, the biggest fall, in over 2 ½ years.  This was started by commentary by the Bank of England in their Quarterly Inflation Report when they pushed back expectations of growth and any interest rate hike until the end of next year. Commentary from Europe and the fact the UK dependency on their overall performance and global growth at risk.  The reaction was swift and quick, investors raced out of the Pound and we saw its value fall greatly. This was seen against a basket of currencies as buying anything from AUD, EURO’s and USD fell to new lows.

It is a trend I had hoped would have stopped today with UK data this morning holding the negative trend however this has not been seen. GBPEUR levels are at 1.25 and have visited 1.24’s a number of times today already.  I am growing wary that levels could fall further still adding more pain to buyers that may have become compliance at the 1.26-1.28 range. This I think is now a long way away, if you have simply decided to wait for levels to recover you could be waiting a long time for these levels again.

In the near term all eyes are on Thursday with both European and UK data. I expect both to be better than previous months so we again will see rates rather changeable on Thursday morning with EURO sellers seeing the advantage first thing and GBP sellers late morning.

For a full break down on how we can help, the market forecasts or a live price please contact myself, Steve Eakins via email at hse@currencies.co.uk

Best Rates of Exchange – Sterling Spike – Buy Euros Now? Andrew Bromley

We saw a negative more for the Euro this afternoon, as Mario Draghi of the Eurozone Central Bank confirmed that the Eurozones economic growth weakened over the summer period. The market opened this morning at 1.2530, reduced to 1.25 and then spiked to the 1.2570 region. Euro buyers are still looking at strong exchange rates compared to this time last year, and following Carneys weakening of the Pound on Thursday 6th, it may be the best we see for some while.

Those buying a currency with Sterling should pay attention to tomorrow mornings Consumer Price Index (CPI) data, released at 09:30. The expected figure is 1.6%, a slight increase month on month from 1.5%. We may see a small window of opportunity for a GBP spike which could be worth taking advantage of. Following CPI, the Germans release  ‘Zentrum für Europäische Wirtschaftsforschung‘ (or ZEW for short!) – a reading of economic sentiment. The previous figure was negative (-3.6), so the expected improvement to 0.5 could see the Euro re gain ground.

Feel free to drop me a line to discuss further…

AJB@currencies.co.uk

01494 787 478

 

GBP Dips are worth capitalising on!

If you think recent drops on sterling were bad you should prepare for worse as these moves are likely to be extended in the future. Next year is a tremendous amount of uncertainty as to where the political situation in the UK will head.

If you are debating any currency transactions why not speak to one of our specialists regarding all of your options. Remember that you can forward buy your currency locking in current levels and rates. I would expect a recovery in  sterling down the line andI feel therefore current levels represent a very good opportunity to sell Euros for sterling.

If you wish to learn more about your situation why not email me Jonathan on jmw@currencies.co.uk

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