Anyone looking to buy Euros with Sterling is likely to get very little change in the coming weeks with the Bank of England appearing determined to talk down the value of Sterling. Following comments made by Martin Weale a senior member of the MPC (Monetary Policy Committee) that the pound may need to weaken further to help make the UK exports cheaper to help economic growth, the pound is moving back closer to 18 month lows seen earlier this month. For me this policy is likely to continue from the Bank of England as priority for the MPC and Government will continue to focus on avoiding the ‘triple dip’ recession. Should the UK see negative growth in the first quarter of 2013 then the UK is officially back in recession and this is something everyone would like to avoid.
I for one am hopeful we will avoid this and the Pound could receive a welcome boost as a result. Official figures from Q1 will not get released until April and for this reason we are unlikely, in my opinion, to see the Pound gain any momentum. If we can avoid recession it is at this point that the ‘green shoots’ of recovery for the pound could appear.
In summary should you be buying euros in the next few weeks I expect rates to remain range bound between 1.15-1.17 – anyone with a longer term position I would hope to see 1.20 heading towards summer. Euro sellers should in my opinion strike while the iron is hot as the gains since the new year are a little over 6% – a pretty good return in anyone’s eyes.
To discuss my thoughts in more detail or to get an updated market analysis inclusive of how the currency service we provide works then please call the office on 01494 787478. I am very confident I can secure you a better rate for your currency exchange than your current provider and will happily provide you with a quote.
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