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UK ‘Officially’ Back in Recession but GBP Still Posts Gains Against EUR & USD

By
Matthew Vassallo
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GBPEUR rate remains steady as markets await the Autumn Budget

Yesterday’s GDP figures indicated that the UK’s economy is not quite as far out of the woods as some senior officials would like us to believe. This figure came as somewhat of a surprise, considering in general UK economic data has been steadily improving since the start of the year. Following the release of these figures the EUR saw sharp gains against sterling, pushing levels back down through 1.22 and for a while it looked as if it may continue on, eroding the fantastic buying opportunities we have seen of late.

However, by late afternoon this spike had been erased and GBP had not only moved back through 1.22 but surpassed the levels of the previous day, reaching a peak of 1.2277. In my opinion this proves just how little faith investors currently have in the single currency and the well documented problems not only Spain but across most of the EU region, mean that any move back through 1.20 is unlikely in the short-term. We also need to remember this was only the initial figure and it is due to be revised twice over the coming months, so don’t be surprised if the ‘recession’ we have re-entered is short lived.

GBP/USD levels continue to hold firm above 1.60 and today even touched briefly on 1.62, before falling away during afternoon trading. The greenback is suffering from a string of positive data in the US, including a fall in unemployment figures and a faster growth rate than predicted. This would usually indicate strength for a countries currency but as I have written previously the USD is often used as a global barometer, meaning poor economic growth leaves investors running for the relative sanctuary of the Dollar.  On the flip side an upturn in the global economy (often based on data released in the US) means investor’s appetite for risk increases and they move away from the safe but usually low yielding USD and will invest in riskier currencies such as the ZAR or NZD, which fluctuate more and therefore offer more chance of a higher yield. US GDP figures are released tomorrow at 12.30 and any variation from the 2.3% prediction could see  movement for GBP/USD.

If you have an upcoming currency requirement and would like the opportunity to access award winning exchange rates then please feel free to contact me directly at mtv@currencies.co.uk or call me on 01494 787 478.

Will the ECB cut rates on Thursday? (Tom Holian)

By
Tom Holian
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Sterling vs Euro exchange rates increased back to close to their highest level in 2 years following on from the negative Eurozone data from Friday. Sterling began the morning up by 0.3% against the single currency as rumours intensified that the ECB may intervene with monetary policy on Thursday.

The possibilities are that we could see either a rate cut or some form of QE aimed at controlling the fall in inflation on the continent.

This is why we have seen the exchange rates for GBPEUR go in an upwards direction as often rumours have more of an effect than the announcement itself.

Eurozone Retail Sales are due for this Wednesday and the expectation is for 0.9% year on year so anything lower could see Sterling surpass the rates hit in late July against the Euro creating some excellent buying opportunities.

The Bank of England are due to meet on Thursday and with rumours of an interest rate hike before the end of the year I don’t think we’ll see any change this month but any rumours of any of the members voting for a rate increase could also see Sterling strengthen against the Euro.

Prediction for the week STERLING STRENGTH

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

 

 

The pound hits its strongest level so far in April… will this last? (Jonathan Watson)

By
Jonathan Watson
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GBPEUR rate remains steady as markets await the Autumn Budget

If you are looking to buy a foreign currency with the pound we currently have the best rates to buy Euros and US Dollars with pounds since 30th March! Given that sterling looked close to really sliding into the doldrums only 2 weeks ago this change of circumstance for clients looking to buy or sell the pound has taken many by surprise. The big question is of course will this continue and what can I expect next? Well I think the pound will enjoy a period of fragile stability susceptible to moves lower on bad news but equally supported from the fact the worst fears have not yet and may not yet be realised. If you are buying a foreign currency with the pound I think taking serious stock of this current improvement is very sensible to avoid the risk of further losses down the line.

The recent move higher is clearly not going to last forever! It is almost as if everyone has forgotten that just around the corner is the UK Referendum on EU membership and this could be a major event to move markets and upset the current trend of positive news for sterling. It does appear that the current positive news might not last forever and so if you need to buy currency with the pound making some plans now is sensible.

Tomorrow is the all important Eurozone Interest Decision which is likely to lead to volatility on GBPEUR but may also impact GBPUSD and GBPAUD too. The Eurozone is struggling to maintain a consistent front in terms of its economic position. There is lots of speculation as to whether or not there will be further Interest Rate cuts or further Quantitative Easing. Mario Draghi, President of the ECB has stated he will not need to use these instruments again but markets are predicting they will.

The last ECB meeting on the 10th March saw nearly 4 cents worth of movement on GBPEUR which played havoc with client’s best plans. If you are planning any currency transfers in the coming months making some plans in advance is a wise move! We offer a number of options and a personal proactive service to try and help you get the most from the market.

For more information on the market and what options may suit your position  best please contact me Jonathan on jmw@currencies.co.uk

Could the Pound fall even further against the Euro next week? (Tom Holian)

By
Tom Holian
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Pound to Euro Rates: Brexit Impact Papers Cause Pound Sell-Off

Sterling is now trading at its lowest level to buy Euros for over 8 months as the Brexit uncertainty is causing huge amounts of pressure for the Pound.

Although UK GDP published on Wednesday came out as expected with the release of 1.7% year on year for the first quarter the news was not taken positively for the Pound and this caused GBPEUR exchange rates to continue to fall.

At the moment the uncertainty caused by the Brexit is weighing heavily on Sterling and this does not appear to be slowing down.

EURUSD exchange rates are now at their best level since January 2015 and it is becoming clear that not only is Sterling weak but the Euro is very strong against a lot of other currencies at the moment.

Indeed, with the European Central Bank hinting earlier this month that they may be looking at tapering their current QE programme in the near future this has led to an improvement on confidence for the Eurozone and therefore the single currency has strengthened.

We start next week with the release of Eurozone inflation data on Monday morning and this could provide a key as to how the ECB will react with monetary policy when they meet early next month.

I personally think that if the data comes out as expected this could send GBPEUR exchange rates lower so if you’re looking to send money to Europe in the near future then keep a close eye out on what happens.

If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency.

A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on teh@currencies.co.uk and I will endeavour to get back to you as soon as I can.

ECB change of policy helps to strengthen the Euro vs Sterling (Tom Holian)

By
Tom Holian
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Sterling Euro exchange rates have fallen by as much as 4 cents from the highs on Thursday morning to the end of the trading session on Friday afternoon as the ECB have launched further QE and cut the deposit rate to -0.3%.

This was not as much as expected and this caused the Euro to fight back vs the Pound.

Inflation is still worryingly low for the Eurozone as proved by the data published on Wednesday showing only 0.1% and this was why the ECB has taken the steps this week.

With Eurozone GDP figures published next Tuesday the expectation is for 1.6% growth and with the Euro having been weak for months now I think this has helped to improve Eurozone exports which could be proved on Tuesday with the GDP release.

One of the dominant factors for exchange rates this month will come when the US Federal Reserve meets to finally decide whether or not they’ll go ahead with an interest rate hike.

Friday’s jobs data in the US was once again very strong and with unemployment at just 5% with 211,000 new jobs created in November things are looking very good for the world’s leading economy and this could lead to a rate hike on 16th December.

This could see Dollar strength in the run up to the meeting which would typically see the single currency weaken.

However, with the steps taken by the ECB last Thursday I think we’ll see further Euro strength this month.

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

 

 

Sterling Exchange Rates Fall from Recent Peak

By
James Lovick
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What to expect for the pound vs the US dollar next week

The pound has fallen lower today after that excellent run last week which saw sterling surge across the board after the transitional deal in the Brexit negotiations was agreed. Rates for GBP EUR have fallen to a low of 1.1365 today whilst GBP USD touched 1.4066 before climbing higher in afternoon trade.

Whilst a transitional deal has been officially agreed between Britain and the EU, there are still some very big issues which need resolving. Whilst I am of the opinion these issues will be ironed out and agreement should eventually be made there is likely to be an ongoing period of uncertainty whilst the third round of negotiations take place. Talks on the Irish border started yesterday and any developments in the coming weeks coudfl see major volatility for the pound.

The outlook for the pound in the medium term is looking considerably brighter and there could be sizeable gains for sterling exchange rates if negotiations go well. It is in the short term in these coming weeks and months though which should see heightened volatility and continued pressure on the pound. Clients looking to sell Euros for example may wish to convert in this period whilst the pound remains in a weaker position. In my view the pound is unlikely to remain at these weaker levels indefinitely. With higher interest rates in the UK around the corner with an expected rate increase this May the pound should find support and start to drive higher.

Clients looking to buy other currencies such as US dollars or buying Australian dollars with pounds should keep a very close eye on developments from the US. Whilst the US Fed is looking to raise interest rates two or three times this year which should be good for the dollar it is the other developments on trade which are particularly interesting for the markets. The recent tariffs imposed on steel and aluminium as well as the other round of tariffs on imported goods are liked to have wider implications on a number of the other currencies including the Aussie dollar in particular.

For more information on sterling exchange rates and how to make the most of any opportunities in the markets then please get in touch with me at jll@currencies.co.uk

Sterling Sees Slight Rally Versus The Euro Today (Colm Gilhooly)

By
Daniel Wright
-
GBPEUR rate remains steady as markets await the Autumn Budget

Sterling has rallied back against the Euro this morning despite UK public borrowing increasing again.  10 year bond yields showed an improvement suggesting there is demand and we have the Bank of England Minutes tomorrow morning.  Indeed with US inflation and the Bank of Canada interest rate decision tomorrow if could be quite a busy day for currency transfers to North America, and have a big impact on global confidence.

I can’t see any additional members of the BofE MPC voting to join the two dissenting members to raise interest rates in the UK – if anything UK data has tailed off over the last month and with the Chief Economist of the Bank of England suggesting rates would go up in the middle of next year, sterling has been held back recently.  A surprise vote to hike could really provide a shot in the arm for the pound, however I think this is unlikely – sterling in my view is going to be reliant on more problems in Europe to see a big increase in the short term versus the single currency.

If you need to make a currency transfer, and want to get the best exchange rate, then feel free to email Colm at cmg@currencies.co.uk and I would be happy to help.

When should I buy my Euros or Dollars? (Tom Holian)

By
Tom Holian
-

Theresa May’s visit with US President Donald Trump went well with both leaders confirming the ‘most special relationship’ between the two nations.

After a very interesting first week in the White House it seemed to end a bit more calm than the previous fews days for the President who has shocked many with some of his executive orders.

Since the inauguration the Pound has gained against the US Dollar as investors are still not entirely sure how to react to the change in presidency.

The Pound has also gained against all major currencies including against the Euro and the US Dollar since Tuesday after the long awaited news of the Supreme Court verdict which confirmed that the government would need to seek parliamentary approval.

With Theresa May seemingly having got there first the week before the verdict lost its importance and merely confirmed the stance that May had already adopted.

The reason why this is such good news for the Pound is that the government has now taken back control rather than having further obstacles in its path.

UK GDP towards the end of this week also proved that the Brexit uncertainty has not had too much of an effect on the economy as predicted six months ago by many senior officials. It goes to show how resilient the British economy really is and without the Brexit concern affecting the value of Sterling I would expect us to be at least 10% better off vs the Euro and the US Dollar.

Turning the focus on to economic data next week the first data release will be on Monday with Eurozone Consumer Confidence and I think this will cause Euro negativity sending GBPEUR rates in an upwards direction.

On Tuesday we could see huge movements to end the month with the release of Eurozone GDP, unemployment and inflation data. With so many data releases on Tuesday morning we could be in for one of the most volatile days on the currency markets in weeks so it is important to keep a close eye on the news.

Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident that the exchange rates I am able to offer you will save you money compared to using your own bank.

If you have a currency transfer to make and would like to save money when buying currency then contact me directly for a free quote and if there is a currency pair that I haven’t covered then get in touch and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

 

 

GBPEUR rates, ECB interest rate dropped, when to buy (Steve Eakins)

By
Daniel Wright
-

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

Mixed UK Data Slows Sterling’s Momentum (Matthew Vassallo)

By
Matthew Vassallo
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GBPEUR rate remains steady as markets await the Autumn Budget

It’s been a mixed week for Sterling, following some poor UK data releases. The Pound has seen its value drop against most of the major currencies, in particular against the USD & AUD. With heavy loses over the past 48 hours, investors will now questioning whether the Pounds recent momentum has disappeared.

GBP/EUR rates still remain attractive to EUR buyers, with the Pound continuing to float between 1.41-1.42 on the exchange. This is approximately a cent lower than the high earlier this week, with the EUR receiving a boost following better than expected unemployment figures. The Eurozone alos released a host of inflation data that came in above expectation and it did seem as though single currency could put pressure on the 1,40 resistance level over the coming days. This hope has been dampened today, following worse than exported Retail Sales figures and the Pound is now likely to find support around 1.41 for the time being. All eyes will now stitch to today’s European Central Bank 9ECB0 interest rate decision and subsequent monetary policy statement. ECB President Mario Draghi has expressed on-going concerns regarding the low inflation levels and with the market expecting an increase in their current Quantitative Easing (QE) programme to counter these problems, any confirmation of this could cause the EUR to lose value.

GBP/USD rates have dropped below 1.50 and we could now see the Greenback gather further momentum as we head towards the end of the year. As regular readers will know, it has been the focus on when the US Fed would raise interest rates that has been the driving force behind recent USD movement. Head of the FED Janet Yellen was talking yesterday and confirmed that US data had been in line with their expectations since October and this now mean we are very likely to see a rate hikje this month. This is why we have seen the USD gain strength and I now feel it will find support under 1,50 over the coming weeks.

GBP/AUD rates have also dropped dramatically over the past week, with the AUD benefiting from the poor UK data already discussed but also the decision by the Reserve Bank of Australia (RBA) not to cut their interest rates further. This was taken as a sign of strength by the markets and helped boost the AUD’s value, bringing some much needed respite for any clients holding AUD positions. With GBP/AUD rates now trading over 15 cents lower than they were in the summer, I would be very tempted to secure something around the current levels. I do not see the AUD breaking through the 2 barrier, certainly whilst the on-going economic problems in China (Australia’s largest trading partner) continue.

If you have an upcoming currency requirement and would like to be kept up to date on 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@currency.co.uk

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