Well it is that time of the month again folks, where we find out whether or not the UK and Europe will be changing interest rates. As discussed in many posts before interest rates are one of the key drivers of exchange rates. The UK decision is particularly important today because we may also find out if further QE (Quantitative Easing) is to be launched. Regular readers will know we have covered this many times and appreciate its importance. QE has the potential to devalue the pound.
It is unlikely we will see any change in the interest rate of the UK or the Eurozone but that doesn’t mean we won’t see movement on exchange rates. Markets move on sentiment and rumour so it is possible that QE has been ‘priced’ in to an extent. The investors moving the money that moves the currency markets may have moved funds in anticipation of further QE being launched and hence if it does not happen we could see some volatility as funds are moved back.
I had discussed earlier in the week how I felt sterling would lose ground later this week http://www.poundsterlingforecast.com/2011/10/03/very-attractive-sterling-rates-will-the-pound-weaken/ and indeed we have seen many of the fantastic gains made by the pound since Friday eradicated. Of note GBPZAR which nearly reached 13 is now closer to 12 with movement of over 5% between the high and the low. The highs touched against all the currencies I had mentioned have been affected but the pound is still generally speaking stronger against most currencies than it was two weeks ago.
We are specialist currency brokers with years of experience on the currency markets and we write this blog for the benefit of members of the public and our clients alike. We aim to ensure that our clients not only get the best rates according to where the market is, but that we also help to identify favourable trading conditions. There is still huge uncertainty on the currency markets due to the Greece crisis. Don’t get caught out gambling on rates moving in your favour. Speak to us to be kept up to date and receive no obligation hassle free information that could well save you money. Whether you are a seasoned market trader or completely new to the prospect of moving funds internationally I will be more than happy to speak to you to discuss any of the issues above. Feel free to speak to me now on (+44) 01494 787 458 or e-mail [email protected] .