Pound at its lowest against the Euro in 19 months, and 37 years against the US dollar !

The pound is notably weaker today following the release of the latest UK Retail Sales numbers showing a surprise fall of 1.6%, which makes the economic slowdown anticipated, and likely recession ahead seem much worse than thought for Britain.

As I write, GBPEUR levels have dropped to a 19-month low, with the day low at the time of writing 1.1399 on GBPEUR and 1.1350 on GBPUSD. The cable level is a 37-year low, the worst for sterling since 1985 against the US dollar. I am often asked if it is a good time today to buy or sell, today appears to be a very good day to buy the pound if you are selling US dollars or Euros, it can easily be argued.

Any sense of calm and peace we had seen following Liz Truss’ announcement over an energy price freeze recently has ultimately proved short-lived. As a matter of fact, with the weekend approaching and a very busy week next week, we could be in for a turbulent time once again for sterling, particularly with financial markets closed on Monday for Her Majesty’s funeral.

This means there is less time for markets to digest news, and it increases the urgency of decisions, knowing that time is short. Next week is a crucial week with the latest Bank of England and US Federal Reserve Interest Rate decisions, plus Liz Truss’ mini budget that could very easily shape sentiment ahead for the pound.

Going back to today’s data, the British consumer is a major component of economic growth for the UK, so the poor numbers today are quite worrying for the economic outlook ahead. And this information seems highly likely to feed into any narrative by the Bank of England next week.

The Federal Reserve in the US will absolutely be one to watch too, as markets often follow the lead of the Fed, the expectation is for rising inflation stateside to trigger further sharp rises in interest rates, which may only serve to increase volatility as traders and market participants have to react to the ever-changing story on both sides of the pond.

If you are considering any FX payments shortly or longer term involving the pound, EUR, US dollar, or any other currency, now might be a good time to assess your strategy following these latest developments and with so much out there globally to move the FX markets.

For a more detailed discussion of your requirements, please call or email me directly on [email protected] for a one-to-one over what might be best.

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Pound rebounds following lighter than expected inflation figures

Wednesday’s trading session saw the pound on the front foot, gaining back some of the losses from the past week against a basket of currencies. Inflation data released in the morning showed price growth slowed in July for the first time since September 2021. Could this be a signal that the cost-of-living crisis has begun to ease in the UK?

The Bank of England stated last month that they expect inflation to peak at 13%. The drop in price growth does pose an interesting question for the Bank with many in the market expecting a 75basis point hike at next Thursday’s meeting. A lighter than expected 50basis interest rate hike could pile pressure on the pound.

GBPEUR fell sharply last week after the bank suggested they needed to be cautious not to raise rates too aggressively.

GBPEUR almost broke the 1.16 handle at the peak of the day, the highest rate seen since last Wednesday. The pound also saw gains against the Swiss Franc, Aussie dollar and Kiwi dollar. Cable rates (GBPUSD) rose during the day, however, the pairing remains trading within a cent of the lowest levels seen since 1985. Selling $200K, currently buys £7000 more than a month ago.

The US Federal Reserve has its next interest rate decision on Wednesday and many will be watching for whether they opt for a 75basis or 50basis point hike. A 50basis point hike could provide further respite for the pound with a 75basis point hike compounding further downward pressure.

EU to impose a windfall tax on energy firms

Yesterday the European Commission announced that they intend to impose a windfall tax on energy companies in order to raise more than 140 billion euros (£121 billion).

The funds raised will help pay for tax cuts and price caps already in place across Europe. The UK government recently announced its own energy bill price cap but instead of imposing a windfall tax on energy firms to cover the cost, the government will compensate energy firms to protect profits.

This is likely cost more than £100 billion. Could the debt-financed price cap cause problems for the pound in the future? Taxpayers may have to bear the brunt as the national debt level is increased in line with interest rates.

The pound has opened the day slightly softer. in early morning trading There is little economic data coming out of the UK due to the Bank Of England postponing its interest rate decision until next Thursday, but we will see the latest retail sales and jobs data from the US. Weaker than expected data here could boost the pound against the dollar.

Should you have a currency exchange to carry out involving the pound and any major currency and you wish to discuss the markets and how they may impact the cost of your exchange in the near future, feel free to email me (Richard Nugent) at [email protected] or feel free to click here to make an enquiry on our website.

You can also set rate alerts, request quotes, or sign up for a daily alert here on Pound Sterling Forecast.

Will the Pound Remain Steady after Surprise Dip in Inflation ?

The pound has been relatively steady today following a surprise dip in the headline Inflation numbers. In welcome news across the country, the number came in at 9.9% higher year on year for August, versus the 10.2% numbers from last month for July. The important point is the number has been trending higher since the beginning of the year so this marks a turning point and could potentially signal a change in policy ahead. Inflation is very influential on interest rates, and interest rate policy by the Bank of England is crucial to the value of the pound.

Rising high inflation is damaging to an economy since as prices rise, it can limit spending by consumers and business, as they become more careful over their expenditure. The knock-on higher interest rates by a central bank can also limit spending and might cause a recession as has been predicted for the UK late this year or early 2023. Unemployment may also rise and there can be a general lack of confidence which is harmful to economic growth and consumer and business activity.

Whilst good news, this small dip in the Inflation figures doesn’t change the outlook hugely so far, the UK is still facing the highest Inflation levels amongst the leading economies in the world. Sterling is much weaker owing to the worries over recession ahead, and the damage being down to the UK economy by this high figure. The pound appears to be taking a bit of a breather this morning as the market digests this news, to decide if it is a genuine turning point, or just a dip before we do see moves higher. Knowing how cautious the Bank of England can be, they might need to see more evidence of a change to become more confident of a turning point.

It appears petrol prices are the main driver of the fall, with many underlying goods still rising. A key factor too will be Liz Truss’ energy bill freeze at £2500, so hopefully we can see Inflation now stabilise, but the market might need further evidence to trigger sharper moves and a real shift in interest policy ahead.

As mentioned, inflation and interest rates are very closely linked. And interest rates and the relative performance of a currency are also very closely linked, so all eyes will be closely on the Bank of England next week to see if they will deliver their expected 0.5% hike, with the potential for any commentary around the outlook having the potential to influence sterling exchange rates.

If you are looking to buy the pound with Euros or US dollars, following say an overseas property sale or investment, you are buying the pound with Euros near some of the best points in 2022 and since June. With the US dollar, the figures are more impressive, with the best points since 2020 and prior to this the 1980s. Sterling is trading very weakly at present, as markets remain fearful over just how the country will tackle the stubbornly high inflation and help stave off a deep recession that could harm economic growth in the future. It is a similar story against all the majors, including the Australian dollar, New Zealand dollar and the Canadian dollar and Swiss Franc.

If you are looking to sell the pound, to buy a foreign currency it has been challenging lately. However, it is worth remembering the pound was lower in recent years over Brexit. On GBPEUR, we were many cents less last year and in previous years with the 2020 lows reaching 1.05, some 10 cents below current levels. For GBPEUR, 2022 has been one of the better recent years, with rates in the mid to high teens, compared to low teens, and below and around 1.10 for much of 2020-2021.

If you are looking to make a currency exchange and would like to discuss some strategy ahead, I am a currency dealer with 13 years experience guiding both private client and corporate clients through the FX markets, providing strategy and guidance to help make an informed decision.

Thank you for reading and I would be very happy to take any questions or comments relating to this article or to discuss your situation in more detail. You can contact me directly on [email protected] or feel free to request a quote, set up an account or set a rate alert via this site.

Will the pound keep rising against the Euro and when is the best time to buy Euros in September?

A Rollarcoaster Week for GBP EUR - Weekly Review June 18th 

The pound to Euro exchange rate has bounced back from the recent lows rising above 1.16 and making a brave challenge for 1.17 in the last 24 hours. Some fresh confidence that finally, the British government is going to do something about the awful cost of living crisis facing the UK has seen investors take advantage of the recent lows of sterling and buy in some speculative positioning.

It might be argued that all this has done is stem the tide of a majorly depreciating pound, but however you look at it, it has bounced back presenting an opportunity to buy Euros some market watchers might have thought had passed. At its more recent lows of 1.14s, the pound is over 5 cents lower from the almost 1.20 level we hit at the turn of August.

This sudden turn of events shows just how quickly market sentiment can change, and how expensive it can be to hold out for that little bit extra when considering a large volume currency purchase. The reality is no one can say precisely what the market will do next, but with careful analysis of the facts and an educated assessment of previous behaviors, you can make an insightful decision that is based on something.

Whilst sterling has bounced higher on the news that Liz Truss will seek to help with the cost of living crisis, we are awaiting firmer details and this will perhaps not be an overnight change. The current inflation the UK is experiencing is now deep-rooted, with a shift back to more acceptable levels likely to take many months if not years. The problems of inflation are everywhere to see, with less spending power available for consumers, which is already impacting economic growth and presenting headaches for the Bank of England.

This issue, whilst not unique to the UK and sterling, has more seriously affected the UK because consumers have been more exposed to the higher inflation than in some other European countries where more is done to temper higher energy costs through state intervention.

Looking at some of the predictions for GBPEUR ahead, we can see a fair range with some analysts seeing back towards 1.20, others anticipating a move below 1.10 over the next 12 months. This reflects the great uncertainty over just how the market will react to some fairly monumental changes in interest rate policy for both the UK and Eurozone, as well as in the United States all against a backdrop of potential recessions and worryingly high inflation.

As an FX dealer for 13 years at one of the UK’s longest-established FX brokerages I would be very happy to share much greater insight into the forecasts ahead, and work with you to develop a strategy to help maximise your currency exchange. At the very least I might be able to give you some peace of mind and reassurance, from a chat with an expert over why rates are where they are, and what we can expect in the future.

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Pound Sterling losses continue as cost of living crisis dominates headlines – New Prime Minister to be announced today

Pound to Euro rate continues to fall, making history in the process

Sterling exchange rates have continues to drift to kick start a new trading week, as the cost of living crisis dominates headlines across UK media.

With today being an important day for UK politics as we see the announcement of the winner in the Conservative party leadership contest, and ultimately who will be the new Prime Minister, they will almost instantaneously have to announce how they plan to combat what appears to be an extremely challenging winter for the majority of households and businesses.

It is widely expected that Liz Truss will be announced later today at 12:30 and all eyes from investors and speculators will be on her plans to keep people and certain business’s afloat as we face a difficult winter of rising costs, forced closures of retailers, and people simply having to choose between food on the table or heating the house.

This is still clearly impacting the value of Sterling exchange rates, and many feel that it will continue to impact them in the coming months too.

Capital Economics, a well-known independent economic research business has some fairly negative predictions out there for the pound, with expectations that Sterling will lose roughly 5% on a trade-weighted basis in the coming months. This essentially means they expect weakness against most majors, a 5% drop for GBP/EUR or GBP/USD would see Sterling drop below 1.10 as an example, so although it feels low now, if these predictions come true then there may be much further to fall.

It has to be said that the markets can change very quickly and forecasts can be wrong, so it is key to retain the view that things could change, however economic data in the States and the Eurozone is way outperforming the U.K at present, and the drop off in the pound only adds fuel to the fire.

A lower pound means everything imported costs more, from food to gas prices, the lower it drops the higher inflation rises and the more people are paying for goods and services, I personally am noticing costs for almost everything rising and that will be down to many things, but also a lower pound pushing up fuel, transportation, energy and packaging costs for basically every product on our shelves.

The week ahead

We have the news on the new PM later this morning to kick start the week, and as mentioned previously I believe the plans laid out off the back of that could be key for the pound in the early stages of the week.

For those with an interest in Australian or Canadian Dollars, we have the RBA interest rate decision tonight and the Bank of Canada later this week on Wednesday.

Euro followers will note growth figures on Wednesday and more importantly the European Central Bank interest rate decision on Thursday, where the market expects an aggressive 75 basis points hike in interest rates, any change to this could cause immediate volatility, and the wording used regarding future fiscal policy in the press conference after is also likely to set the tone for how the Euro performs over the rest of the trading week.

Currency exchange to carry out and worried about market movements?

If you have an exchange to carry out, yet you are concerned about what is going on currently then feel free to get in touch with us today. We are experts in this field and whilst we cannot directly advise you we can help you negotiate these challenging times along with having a number of tools to assist you to avoid adverse market movement or to help you take advantage of a spike.

If you would like to discuss anything within this article in further detail feel free to contact me at [email protected] and I will be happy to help you.

Alternatively, Click this link and let us know your requirement and we will be in touch to discuss your options in more detail.

Pound to euro predictions: Forecast for the remainder of 2019

A Rollarcoaster Week for GBP EUR - Weekly Review June 18th 

Over the last 8 weeks, pound to euro exchange rates have dropped 5%. To put this into monetary value a €250,000 purchase now costs an additional £11,450. The pound has declined in value due to the chances of a no deal Brexit increasing. As it’s been highlighted over all media stations, front runner Boris Johnson has made it clear that the UK will be leaving the EU with or without a deal at the end of October.

New UK Prime Minister to be announced on 23rd July

This month the 160,000 Tory members will vote to decide who they want to be the next Prime Minister and the verdict will be announced on the 23rd July. If the polls are correct and Boris takes over at No. 10, the chances of crashing out of the EU without a deal increases, therefore I expect the pound to face further pressure against the euro. However if Jeremy Hunt manages to beat the odds and win, the pound could recover some of the losses it has seen over the last 8 weeks.

Pound to euro predictions for 2019

To forecast Pound to euro rates for the remainder of the year, I am predicting that Boris will become the next Prime Minster. Therefore throughout August we will find out more in regards to how the former Mayor of London wishes to proceed.

Regardless of who takes over, the EU’s position I believe will remain clear and the withdrawal agreement will not be changed. Therefore this could put further pressure on the pound. However come the end of October, I don’t believe the UK will crash out of the EU without a deal as MPs within the House of Commons will find a way of blocking it. In fact, the most likely option I believe will be a snap General election which Boris Johnson himself calls.

For clients that are buying euros, an uncertain time ahead is on the horizon. Therefore, if you buying property in Europe or have to pay a company invoice, buying euros upfront I believe is your best option. For clients selling euros to buy pounds, you are in a fantastic position. Exchange rates have dropped 5% in 8 weeks and uncertain times lay ahead. If I was in your position I would outline your requirements by filling in the form below, this will send your message directly to me and I will keep you up to date as developments unfold.

Pound Sterling exchange rates remain flat with minimal economic data or Brexit news to feed from

GBP AUD Moves Higher with a UK GDP Boost 

So far this week we have not seen a huge amount of volatility for Pound Sterling exchange rates, if anything, against the Euro the Pound dropped ever so slightly.

News released this morning indicates that Mark Carney, Governor of the Bank of England is set to potentially take over the helm at the IMF (International Monetary Fund). This no great surprise as he is due to leave at the start of 2020. He had already agreed to remain longer than his original post was due to end to help steer the UK through the choppy Brexit waters. Hopefully whichever way that the Brexit situation ends up, something will be resolved before his departure.

Pound Sterling exchange rates: Brexit uncertainty continue to hamper the Pound

On the Brexit front we still have no new news and it is not a great surprise that the Pound is struggling as political and economic uncertainty can historically be damaging for a currency. Brexit brings both to the table. With no clear ending in sight it is hard to see any dramatic improvement in Sterling exchange rates in the near future.

Economic data for next week

Economic data is reasonably quiet for the rest of the week, on Wednesday of next week we do have a blockbuster of a day in terms of economic data, with industrial and manufacturing production, growth and trade balance figures all due in the morning, and the NIESR (National Institute of Social and Economic Research) growth estimates due out in the afternoon.

European economic data is very thin on the ground over the course of next week so it will be more likely that political news will impact the value of Euro exchange rates unless any economic surprises pop up.

On that front there is the potential for a number of economies within the Eurozone to hit the headlines as many are struggling. However, with Brexit still being the star of the media show a lot of these issues are being overlooked.

All in all it is a tricky period to predict exchange rates and it does look like rates may remain fairly range bound over the coming days. Having worked in the markets for nearly a dozen years surprises can happen so it is always key to keep an eye on the exchange rates on a regular basis.

If you are in the process of buying or selling a property overseas and you would like my assistance, then it would be a pleasure to help you with the timing of your transfer and with making the most for your money when the time arises. If you would like to discuss a potential exchange with me personally then feel free to fill in the form below and I will be happy to contact you for a no obligation discussion.

Pound vs Euro forecast: A higher probability of a no deal Brexit will result in a weaker Pound

Pound to US Dollar Exchange Rate Rebounds as Boris Heads to Brussels to Break Brexit Deadlock

Pound vs Euro forecast: Boris Johnson’s stance could weaken Sterling

The pound remains weak against the majority of major currencies due to political uncertainty and the lack of clarity surrounding Brexit. At present the UK is in Brexit limbo and we have no Prime Minister. Political and economic uncertainty are catalysts to a currency losing value.

Favourite to gain the role of Prime Minister, Boris Johnson has said he will be willing to take the UK out of the European Union if a deal cannot be reached.

He will attempt to use the threat of a no deal Brexit scenario as ammunition to get an improved deal from Brussels.

Johnson stated the following this week “We are getting ready to come out on 31st October. Come what may. Do or die.”

He has made it clear that he does not wish to go down the route of another extension.

Brussels has stated on several occasions that the deal on the table is the only deal on the table and there will be no renegotiation. This is something that is seemingly being ignored by British members of Parliament.

The general consensus amongst economists is the higher the probability of a no deal the weaker the Pound will become. This does not bode well for Sterling and should you have to sell the Pound short to medium term you may wish to take advantage of current rates.

Will UK GDP data cause Sterling exchange rates to drop

UK GDP figures are released later today and there is expected to be very little change. Year on Year figures are set to remain unchanged at 1.8% and it is a similar situation with month on month set to stay at 0.5%.

I believe the data could land below expectations which could cause Sterling weakness.

If you would like a free quote for buying or selling euros, or would like to discuss exchange rates in more details, please contact me directly using the form below. I look forward to hearing from you.

Pound vs Euro exchange rates: Will Boris Johnson sink the pound again?

GBP EUR Could Head Lower After Growth Revisions

Boris Johnson has been a colourful figure in many ways, and this is also true of his in influence on sterling in the currency markets. The pound vs Euro exchange rates have never been too steady with Boris around, as was proved when he first came out in favour of Leave back in 2016. How will sterling perform in the weeks ahead with ‘BoJo’ looking likely to be the next UK Prime Minister?

Boris’ refusal to completely rule out a no-deal Brexit is a key factor in the behaviour of sterling with no-deal a key aspect in the market’s assessment of the performance of the British currency. Boris Johnson has proposed various measures if Britain decides to leaves the EU without a deal, with a key aspiration to not rule it out.

This means that, assuming he becomes Conservative leader and the UK PM, which is very likely, sterling could be in for further turbulence. Whilst Boris is not actively seeking a no-deal Brexit alone, and does want to renegotiate with Brussels, the lack of expectation on any lee-way from the EU leads to an increased expectation for a no-deal Brexit on October 31st 2019.

Pound vs Euro forecast: What will help the pound to rise against the Euro?

The news is not all doom and gloom for pound vs Euro rates, the recent weakness on the Euro could still assist those looking to buy Euros.

Mario Draghi, President of the European Central Bank (ECB) hinted yesterday that the Quantitative Easing (QE) program, which weakened the Euro so much in recent years, could be revisited if inflation remained low.

The Bank of England might also offer some support here too. The latest UK interest rate decision is due tomorrow at midday. Any suggestions that UK interest rates might need to be raised in the future could lead to a rise in sterling exchange rates. Although the Bank has not historically been supportive of the uncertainty caused by Brexit, is it likely to view Boris’ approach too favourably.

US Federal Reserve speech could impact EUR/USD rates

To complete the trio of central bank activity, we have the US Federal Reserve speaking tonight. This might well influence movement on EUR/USD exchange rates, which may ‘weigh’ the Euro higher or lower versus the pound.

There is so much going at present to drive pound vs Euro exchange rates as the market remains on tenterhooks to observe clarity on Brexit and central bank activity. For a personal and comprehensive review of your currency plans, please do contact myself, Jonathan, to discuss any currency transfers you might be considering up ahead. You can contact me directly using the form below:

Pound to Euro Forecast – Leadership Contest Drives GBP/EUR Rate Lower

Pound to Euro Forecast - Leadership Contest Drives GBP/EUR Rate Lower

The pound to Euro exchange rate continues to test the lower levels with rates falling to a five month low for the GBP/EUR rate.

Whilst this is welcome news for those looking to sell Euros, those that wish to buy Euros are struggling to see much hope for a rally with the ongoing Brexit and political uncertainty. The Conservative leadership contest for the next Prime Minister continues and front runner Boris Johnson will commence his campaign today.

Boris Johnson puts “no deal” Brexit on the table

Boris Johnson has promised that the UK will leave the EU by the 31st June deadline with or without a deal. The return of “no deal” to the table is what is putting pressure on GBP exchange rates.

Labour looking to prevent no deal Brexit

The Labour party will today table a cross party motion to try and prevent a no deal Brexit from ever happening which could have some bearing on the direction of travel for the pound to Euro exchange rate.

The motion appears to have cross party support from all of the other parties and if successful will likely give the Government and any future leader a headache as the options of Brexit are whittled down. The move could even force a general election adding another layer of uncertainty for the pound vs Euro exchange rate. The prospect of a no deal exit from the EU continues to be the major driver for pound to Euro rates with considerable market reaction being seen on the back of Brexit related headlines. As we await confirmation of the next British Prime Minister there is likely to be high volatility for GBP/EUR rates in the run up to the event.

Those looking to sell Euros may wish to consider taking advantage of the attractive rates although there may be more room for EUR/GBP rates to improve further. With little optimism for a deal being reached on Brexit the pound is likely to remain tested.

Will the Euro go down against the Pound?

The Euro could also be in for a rough ride ahead after the European Central Bank met last week and signalled its intent to cut interest rates if required and re-introduce another round of bond purchases to help avoid a global recession. Although ECB President Mario Draghi said that the EU will avoid a recession in 2019, he did make clear that interest rates are likely to be cut. Such a move would likely result in Euro weakness.

If you would like to ask a question about anything you have read in my pound to Euro forecast, or would like to discuss exchange rates, please feel free to contact me directly using the form below. I will respond personally.

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Where interbank exchange rates are referenced within the website these should only be used as a guide on the performance of a market. These rates are not indicative of our exchange rates – please contact us for a quote.