3 stumbling blocks ahead for Sterling vs the Euro

Sterling has had an interesting week vs the Euro but started to drop during Friday afternoon’s trading session as speculators sold off the Pound in advance of this weekend’s Conservative Party Conference.

In recent weeks the Tories have been rather divided and if we have more evidence of it this weekend I think this could cause a problem for Sterling exchange rates during the early part of next week.

Indeed, when Theresa May gave her statement last week she announced that she was committed to following the decision made back in June 2016 when the UK voted to leave the European Union.  She went on to confirm that whilst she is leader there will be no second referendum.

This has led to some pro-Remainers in the Tory party to consider plans of how to remove her from power and if there are further rumours during the conference then I think this will also lead to Sterling weakness as it will cause a huge amount of political stability.

Looking forwards as far as I see it there are 3 stumbling blocks in the way for Sterling to get through over the next few weeks. The first is the Tory conference followed by the EU summit due to be held on October 18th. This date will be key as to how Sterling may perform over the next few weeks as at the moment the UK and the EU are at a stalemate with the talks.

The Chequers plan was rejected last week and as yet the EU have not come up with an alternative. Therefore, there is potential for a huge amount of volatility during the EU summit depending on how the talks go.

This will be followed by a potential emergency Brexit meeting in November with a date yet to be agreed. What is clear is that there is a lot of uncertainty during the course of this month so many of my clients who are buying a house in Europe are opting for a forward contract which allows you to fix your exchange rate for a date in the future.

If you have a currency transfer to make and would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote.

I have worked for one of the UK’s leading currency brokers and I’m confident that I can offer you bank beating exchange rates as well as trying to help you with the timing of your transfer.

Email me directly with a brief description of your requirement and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Pound falls against the Euro after Bank of England rate hike

Negative Retails Sales Figures put further pressure on GBPEUR

The Pound came under renewed pressure against the Euro towards the end of the week even after the Bank of England chose to increase interest rates from 0.5% to 0.75% on Thursday.

The Pound briefly touched toward 1.13 in the thirty minutes following the announcement but then the press conference confirmed what a lot of people have been thinking in that it will be some time before we see another interest rate hike.

Part of the reason for Thursday’s decision was to allow the Bank of England room to cut rates next year if things continue to falter concerning the Brexit talks.

On a currency transfer of £200,000 the difference was as much as €1,8000 from the high to the low which highlights the importance of being well prepared for movements on the currency markets.

The rate decision saw the first hike since last November and the base rate is now back to where it was in 2009. However, Bank of England governor Mark Carney reinforced the doubters by saying that the risk of a no Brexit deal was ‘uncomfortably high.’

As we go into next week there are a number of data releases due out which could affect Sterling vs Euro exchange rates.

Next week on Friday the UK will release the latest UK GDP data and this is expected to see a growth from 0.2% to 0.4%. The first quarter was relatively low but that was blamed by the ‘Beast of the East’ weather so it should come as no surprise that the data will see an improvement.

Therefore, in terms of much movement I think next week will be rather limited so if you’re comfortable with where rates are at the moment and want to save money compared to using your own bank then contact me directly for further information and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Bank of England the focus for sterling this week!

BOE Interest Rate Decision

The Bank of England will take the focus this week with their meeting on Thursday which could see some volatility for the pound. Expectations are centered around a weaker sterling if the Bank of England fail to hint at any future rate hikes and I personally would not be surprised to see sterling lower. Any change in the value of sterling could be short-lived so if you have a transaction to consider and wish to capitalise on any sudden improvements, please email me on jmw@currencies.co.uk to highlight your position.

A key reason for the Bank of England not raising interest rates back in May was the lack of growth in the UK economy. Blamed largely on the ‘beast of the east’ weather conditions, economic growth in Q1 was poor. What could prove very interesting for the Bank of England to consider will be the recent GDP (Gross Domestic Product) data which showed a fall in GDP over the course of Q2.

The general impression had been the Bank of England will link raising interest rates to growth having used this as a reason not to raise in May. With GDP so important to the Bank of England’s calculations, the likelihood for me will be a weaker pound as the market scrambles to review the prospect of any interest rate hike in 2018, which for me now, looks much less likely.

Clients buying or selling the pound are now faced with a key piece of news which could move exchange rates, preparation is key to maximising any deal as it gives you the opportunity to lock in any sudden improvement. If you have a position that you will need to consider in the future, please feel free to contact me Jonathan to run through the market, your options and what strategies might suit you best.

Please use jmw@currencies.co.uk and ideally, please include a number. Any information provided is completely free of charge and at no obligation.

Thank you for reading and I look forward to discussing the market and your situation soon!

Sterling Exchange Rates Volatile on Brexit Detail This Week (James Lovick)

The pound continues to hold the upper ground against the Euro after the developments last week from the European Central Bank. Rates for GBP EUR are sitting at 1.14 after the Euro dropped sharply when the ECB confirmed it will finally complete its asset purchasing scheme in the final quarter of this year. The Euro weakened further after the ECB stated that it will not look to raise interest rates until beyond December 2019. The markets had assumed that the central bank would follow more closely in the footsteps of the US and UK but that has been completely put back under a very strong dose of forward guidance.

Economic data is light this week for the UK although focus will move to Thursday’s interest rate decision at the Bank of England. Although there is not expected to be any change in rates any suggestion that there could still be a hike in August is likely to help see the pound rally. Retail sales bounced higher last week which was a much needed boost for the British economy. One set of data though is unlikely to persuade the Bank of England to take action now. In my view though the uncertainty on how Brexit will ultimately look will create a more cautious mood within the Monetary Policy Committee.

Before the meeting on Thursday though the ongoing ping pong of the Brexit withdrawal bill is likely to direct the price of sterling. The House of Lords have discussed the bill today and it will go back to the House of Commons for another vote on Wednesday. This could be a big market mover ahead of the EU summit at the end of the month.

For more information on sterling exchange rates and how to make the most of any spikes in the markets when making transfers then please email me at jll@currencies.co.uk

Pound makes gains vs the Euro and could we see further gains when the Bank of England meets on Thursday?

Canadian Dollar Strength following Bank of Canada Rate Hike

The Pound has had a good end to the week vs the Euro after much better than expected UK Retail Sales data which were published on Thursday morning.

The better weather caused Retail Sales to jump higher than the estimated figure and this in part caused the Pound to have the biggest improvement against the Euro in one day all year.

The good news was further exacerbated by the European Central Bank’s announcement to end their QE programme in December.

The previous expectation was to end it in September so to carry it on until December caused the Euro to weaken.

The further losses for the Euro came when the central bank suggested that any interest rate hike may not be coming for a very long time and this also panicked investors which caused the Euro to come under pressure against a number of different currencies including vs the Pound and the US Dollar.

With the US having raised rates twice this year and seven times since December 2015 this caused a big sell off from the Euro and into the US Dollar.

As we go into next week the big day in terms of movement is likely to come on Thursday when the Bank of England hold their latest interest rate meeting.

Previously the Bank of England kept interest rates on hold with a 7-2 split but with Retail Sales showing a massive improvement this could potentially provide some evidence in favour of hiking interest rates in the future.

I personally still think a rate hike is a long way away but if there are any hints that one may be coming then this could potentially send GBPEUR exchange rates up towards 1.15 if the news is positive next Thursday.

If you have a currency transfer to make in the future and would like to save money on exchange rates compared to using your own bank then contact me directly for further information or a free quote.

Email me Tom Holian teh@currencies.co.uk

Mixed day for GBP exchange rates as UK Retail Sales figures improve

GBP/EUR exchange rates - What to look out for this week

After a busy day for economic data releases the Pound had a mixed day of trading yesterday, gaining against some currencies whilst dropping against others.

The good weather along with the Royal wedding last month appears to have buoyed shoppers after Retail Sales figures jumped by 1.3% after initial expectations of just 0.5%. This gave the Pound a boost against all major currency pairs early in the morning but the tide soon changed against the likes of the US Dollar which appears to be back on the front foot after another interest rate hike in the US this week.

The Euro had a bad day and the Pound to Euro exchange rate had its biggest one day gain since March. After the European Central Bank announced that it’s Asset Purchasing Programme (APP) will end towards the end of the year and that there will be no interest rate hikes until the end of next year, the Euro weakened.

At the moment the Pound to Euro rate is trading in the 1.14’s and over the last year its highest levels have been in the 1.15’s, so it’s a good time to be making that conversion considering recent historical levels.

Next week there could be movement for GBP pairs, especially on Thursday when the Bank of England will be updated us with their monetary polcicy plans. If you wish to be updated in the event of a major market movement do feel free to register your interest with us.

If you have a large 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 (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Pound makes biggest single daily gain against the Euro this year after ECB meeting

The Pound has made some huge gains vs the Euro during today’s trading session after the latest European Central Bank meeting.

The central bank has announced that it will be ending its QE programme in December and reducing the currently monthly spend of €30bn in September to €15bn until the end of the year.

The central bank has also said that it is likely that they will be keeping interest rates on hold as the growth in the first quarter is at 0.4% and they have also downgraded growth for this year and this is why we have seen the Euro have its worst day of the year against the Pound so far.

ECB President Mario Draghi also said that the bank have not decided when they may look to raise rates owing to the rise in geopolitical tensions. However, some have suggested that a rate hike could potentially occur in a year’s time which is hardly anything to get excited about.

The Pound started the day on the front foot after a big surprise with UK Retail Sales which came out much better than expected. Figures for the year showed 3.9% year on year compared to the estimate of 2.4% and this gave the Pound an unexpected boost against a number of different currencies including vs the Euro.

Tomorrow morning the Eurozone will announce the latest set of inflation data and I think we could see further weakness for the Euro as it is likely that the ECB already have these figures.

If you are looking to buy Euros at the moment it may be worth taking advantage of these current levels as the Bank of England are due to meet next Thursday and therefore these gains for the Pound vs the Euro could be short lived.

If you would like a free quote when converting currency and would like to save money on exchange rates then contact me directly and I look forward to hearing from you. Alternatively, call me directly on 01494787478 and ask for Tom Holian when calling.

Tom Holian teh@currencies.co.uk 

 

Big movement ahead for the US Dollar

GBPUSD rates back below 1.30

We could be in for a very busy next 24 hours for GBPUSD exchange rates as the House of Commons begin their second day of debating the EU Withdrawal Bill as well as the latest interest rate decision by the US Federal Reserve later on this evening.

The debate in the House of Commons has already caused one minister to hand in their resignation and so far we have seen a 26 majority to reject an amendment made by the House of Lords at their previous meeting.

The result was seen as a positive but there is still a long day ahead and the uncertainty is causing the Pound to struggle particularly vs the US Dollar.

It is almost a certainty that the US Federal Reserve will increase interest rates tonight which will be the second time this year and the seventh time since December 2015.

We have seen GBPUSD rates hit 1.33 during the course of the week and a further rate hike, although fully expected, could see GBPUSD rates fall below these levels so make sure you’re well prepared to take advantage of these rates if you’re looking to sell US Dollars to buy Pounds or even Euros.

Ultimately though I think the EU Withdrawal Bill will be the biggest market mover so depending on the outcome this is likely to result in a lot of movement overnight for US Dollar exchange rates.

Tomorrow morning once the dust has settled we could see further problems ahead for the UK with the latest UK Retail Sales data.

We have already seen a number of high street stores close recently and with jobs cuts ahead I think this sector could show real problems resulting in Sterling weakness.

If you have a currency transfer to make involving US Dollars or any other major currency pair then feel free to contact me and I look forward to hearing from you.

Having worked for one of the UK’s leading currency brokers for 15 years I am confident that I can save you money when exchanging currency compared to using your bank.

Email me directly with a brief description of your requirement.

Tom Holian teh@currencies.co.uk

Brexit Talks and ECB Meeting to dominate Sterling vs the Euro next week

The Pound has had a relatively quite week vs the Euro and ended the week lower against the US Dollar as politics and the Brexit issue has started to rear up again.

Brexit secretary David Davis had a disagreement with PM Theresa May but they have now come to an arrangement with the backstop deal and a final date has been agreed and this has helped to stabilise Sterling.

However, as we go into next week there are a number of key economic data releases due out which could impact the Pound but for me the biggest event next week will come on Tuesday and Wednesday when the EU withdrawal bill will be debated in the House of Commons.

Previously, the House of Lords had rejected some of the terms and this is why it will be debated next week. The bill is primarily aimed at repealing the European Communities Act of 1972 and will involve the UK adopting EU law once we officially leave the European Union.

The government will be keen to get things resolved prior to the EU summit due to take place in the next fortnight so if we get a positive result then this could end up with the Pound making some gains but if things remain unresolved this could cause a big problem for the Pound.

Then on Thursday the European Central Bank will be announcing their latest monetary policy decision.

At the moment the European Central Bank are contemplating what they will do with their current QE programme so if there are any hints that this may be coming to a close then this could strengthen the Euro as it will mean the next step for the ECB in the future will be to look at increasing interest rates at some point next year.

Therefore, with two very important days next week it is important to keep a close eye out on rates and if you have a currency transfer to make then feel free to contact me directly for a free quote and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

Brexit talks put pressure on the pound

Will today's UK data provide another boost for the Pound?

Today Theresa May held crunch Brexit talks with Conservative MPs as Brexit Secretary David Davis led a revolt due to the terms of the ‘backstop’ plan. The Brexit secretary yesterday evening made threats that he would resign if the PM did not add a deadline to the ‘backstop’ proposal. With the relationship between the two appearing to be deteriorating by the day, sterling exchange rates struggled against the US Dollar throughout the mornings trading session until reports were released suggesting a final leave date has now been added to the proposal.

The ‘backstop’ proposal is a fallback agreement which will state that the UK will remain part of the customs union for an extended period of time if the UK and EU cannot come to an agreement by March next year.  No surprises Brexiteers are not happy with the arrangement as the UK will remain closely linked to the EU and this could have an influence on future trade deals that the UK try to put in place.

The EU summit at the end of the month had the potential to have a major impact on sterling exchange rates and with the recent commentary coming from the Conservative party I believe this has amplified the situation. Unfortunately I don’t believe its good news for clients buying a foreign currency, as its only a matter of time until the PM confirms that the UK and EU cannot come to an agreement in regards to the Irish Border.

Quite simply if I were buying a foreign currency I wouldn’t taken any risks and would look to make arrangements sooner rather than later.

When buying or selling the Pound its important to analyse both currencies that you will be trading. If you would like to save as much money as possible feel free to email me with the currency pair you are looking to trade and the time-scales you are working too and I will email you with my forecast and the process of using our company drl@currencies.co.uk.

As a company we pride ourselves in the ability to get you a better exchange rate than your current currency provider or your bank. In addition we can outline your options and the potential future events, which will impact your exchange rate. This will help you to make informed and educated decisions.

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