Why has Pound/Euro risen to €1.38?

Pound/Euro surges on ECB comments 

In my last post on Tuesday, I said that today’s ECB press conference would be key to GBP/EUR rates, and that if there were hints they would extend their stimulus programme, the Euro could weaken and GBP/EUR rates would rise. This is exactly what we have seen happen today as they said that their Quantitative Easing programme would need to be re-examined. Look at the effect it has had on GBP/EUR and GBP/USD in the charts below: 

Pound/Euro rises by 2 cents: 

 Pound/Dollar drops by 1 cent:

ECB to re-examine its stimulus programme 

Inflation is low in the EU, but they can’t cut interest rates as they are already at 0.05%. As I’ve been saying recently, the only clear solution is to increase their QE programme. Today, the ECB president said that "The asset-purchase plans are proceeding smoothly and continue to have a favourable impact," adding that "The degree of monetary policy accommodation will need to be re-examined at our December meeting." 

What does this mean? In a nutshell this means more Euros will be pumped into the economy later this year, and as such the Euro has weakened significantly and is cheaper to buy. 

The news has also affected GBP/USD rates, as investors dumping the Euro have instead purchased the US Dollar, causing it to gain strength and become more expensive pushing GBP/USD rate lower by 1 cent. You can clearly see the 'inverse correlation' in the charts above, as at 13:30pm when the news broke, the graphs move in opposite directions. 

Do you have currency to convert? 

Those needing to buy Euro should consider taking advantage of this spike in rates we have seen today. It could go higher of course, but usually a large spike such as this is short lived, and recent gains haven't lasted very long, so while impossible to forecast, I expect rates to drop back away by the end of the week. 

Do you need the best exchange rates? 

If you would like to discuss the currency markets to help you decide when to fix an exchange rate, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today. 

I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it's certainly worth getting in touch to see what I can do for you. 

Click here to get your quote and find out how much you could save.

Pound/Euro exchange rate forecast

Sterling/Euro rates fall ahead of ECB meeting this week 

Pound/Euro rates have recovered in the last week, partly due to some positive UK employment data, but also due to speculation the European Central Bank (ECB) may announce further stimulus this week. Interest rates there are as low as they can go (0.05%), and in order to ward of the threat of deflation, they may have to increase their stimulus measures. I don’t think they’ll announce anything on Thursday, but it’s important to listen out for any hints the ECB president Mario Draghi may give in his press conference. 

To me it’s quite obvious that their QE programme will need extending, and that’s why the Euro has been weakening off in recent days as this eventuality gets priced into the market. However today the market starting correcting itself, pulling GBP/EUR back down to around the €1.36 level as you can see from the chart below. If he does hint at further measures, there may be a short term spike in GBP/EUR rates. 

If you need to buy Euros, then it’s worth looking into placing a ‘Limit Order’ to take advantage of any spike we may see. This works by placing a target level with me that may be above the current rate. If the market does spike and your level becomes available, your trade is executed automatically and your currency is purchased. 

What else could affect exchange rates this week? 

Wednesday 21st October 2015 – Today the UK government releases its Public Sector Borrowing figures, which show the amount of debt they hold. The last release showed a deficit of £11.3bn, and today I expect this number to be around £9bn. If it’s higher than this, then Sterling exchange rates could fall, and vice versa. Later in the day there is another Speech by BoE Governor Mark Carney, and any hints about UK interest rates could also affect the Pound. Elsewhere, those with an eye on GBP/CAD rates should look out for the Bank of Canada’s (BoC) rate decision and policy statement. 

Thursday 22nd October 2015 – It’s quiet in the UK today, but over in the Eurozone we have the European Central Bank (ECB) decision on interest rates. As I mentioned at the top of this report, while it’s highly unlikely interest rates will change, the press conference at 13:30pm is very important for Sterling/Euro buyers, because there may be hints at further stimulus in the EU. If that proves to be the case, expect the Euro to weaken pushing GBP/EUR higher. Elsewhere, the USA has Jobless data and House Price info. 

Friday 23rd October 2015 – Nothing for the UK today, but GBP/EUR could be affected by EU and German inflation numbers. Canada and the USA also release inflation numbers today that could affect GBP/CAD and GBP/USD respectively. 

If you would like to find out more about what moves exchange rates, or would like a quote on your exchange, then send me a free enquiry by clicking below. 

Contact me to discuss your currency exchange and get a quote. 

Sterling/Euro rises from €1.3350 to €1.3550

Thursday 15th October 2015 
Sterling/Euro rates have recovered very well in the last few days, rising from the €1.33’s to €1.3550 today. In today’s post I’ll explain the reasons for the gains, and what action those with Euros to buy or sell can take to help achieve the best exchange rates. First, a quick look at this week’s GBP/EUR graph: 

Why have Sterling/Euro rates risen? 

As you can see from the chart above, early in the week Sterling/Euro fell to €1.3350, the lowest it’s been since February. As I explained in my recent post, the drop was due to very low inflation numbers that weakened the Pound. 

Since, then we’ve seen the rate gain nearly 2 cents to €1.3550, so what’s been going on? Yesterday morning it looked like the Pound would continue to drop, as UK jobs data was released at 09:30am. The Claimant count was pretty dire, and showed that there were nearly 7000 more people claiming benefits than forecast. The Pound fell to €1.3350 on the news, but quickly recovered. 

This is because when you actually look at the figures in more detail, you see that the number in work actually rose by 140,000, bringing the employment rate to 73.6% - the highest rate since records began in 1971. This caused the Pound to gain, and in addition, wage growth has gathered pace much faster than the Bank predicted earlier this year, and this may allow the Bank of England to deliver the first hike in May next year, according to the chief economist at BNP Paribas. 

This morning, European Central Bank policymaker Ewald Nowotny said that it was now "obvious" the bank must do more to stimulate the euro zone economy. This signals further Quantitative Easing may be required in Euro, and the single currency has weakened further this morning pushing rates up to the mid €1.35’s. 

Do you have Euros to buy or sell? 

Many clients that had Euros to sell that read my post on Tuesday decided to fix a rate then, and that was a prudent move given the rebound we’ve seen. If you look back at the movements in GBP/EUR this year, you can see the rate has dropped to €1.35 several times, and every time it’s bounced back. This is what we’ve seen happen again this week. 

In contrast, it’s a difficult time for Euro buyers unsure whether to wait to see if rates will recover, or just get the rate locked in now to protect against a further decline. Nobody can foresee whether rates will recover as they did earlier this year, or if the recent trend of Sterling weakness will continue causing rates to drop back away again. It’s important to remember that past performance is not indicative of future trends, however it’s the most salient data that many with a currency transaction to perform will rely on. 

But simply looking at the trend and hoping things will get better could end up costing you dearly. A more proactive approach would be to ensure you are fully informed of both what is moving the market, and the contract types at your disposal to help you take advantage of any spikes we may see in the exchange rate. 

I would welcome the opportunity to speak to any clients about the currency markets, discuss your requirements, assess your needs, and help you to make an informed decision on when to fix a rate. Click below to get in touch, and I will get in touch personally to explain the mechanics of how our service works. 

Click here to send me a free enquiry today. 

Sterling falls on poor UK inflation figures

Tuesday 13th October 2015 
Volatility has returned to the markets, and since my last post on Friday we have seen the Pound/Euro rate drop a further 2 cents, dipping into the €1.33’s this morning, and is currently settled at around €1.34 as you can see from the chart below: 

Poor UK Inflation figures weaken Sterling 

The reason for the drop of over 1 cent this morning was due to poor UK inflation figures. This morning the Consumer Price Index (CPI) fell into negative territory at -0.1%. This is worse than expected, and pours cold water on any hope the Bank of England will be raising interest rates. As the pressure is off the BoE, investors are not going to be buying Sterling in a hurry, and as such the Pound has weakened. The effect on the exchange rate is that levels have dropped off across the board. 

Do you have Euros to convert to Pounds? 

While the market movements today are bad news for those buying a foreign currency with Sterling, those that have Euros to convert back to Pounds will be rejoicing! The current EUR/GBP rate is the best it’s been since January. If you will have Euros or indeed any other currency to convert to Sterling, then it’s worth serious consideration to locking a rate in now. Even if you don’t have your funds available now, you can still use my services to guarantee today’s rate for up to 2 years in to the future, using a ‘Forward contract’. (Click here to send me an enquiry to find out more). 

Need the best exchange rates? 

If you would like to discuss the currency markets to help you decide when to fix an exchange rate, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today. 

I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it's certainly worth getting in touch to see what I can do for you. 

Click here to get your quote and find out how much you could save.

Different ways you can get the best exchange rates

Thursday 8th October 2015 
The currency markets have been calmer this week, with not as much fluctuation a we have seen in recent weeks. In the chart below, you can see that the Pound/Euro rate in particular has remained range-bound between 1.3550 and 1.3650 in recent days: 

The reason rates are relatively stable is that economic figures have been roughly as expected. UK GDP is around 0.5% which is about what the markets thought. German Exports were down but it didn’t really weaken the Euro much. The Bank of England (BoE) have kept interest rates on hold as expected, and the speeches by the central bank governors didn’t really give any surprises. It’s still the case that the BoE will likely raise rates halfway through 2016 and I don’t expect much Sterling strength until then. 

How to buy currency at the best exchange rates 

Given the relative calm in the markets, I thought today would be a good opportunity to outline the various contracts that I can offer to help you get the best exchange rates and protect you against adverse movements in currency prices. I can source you rates up to 5% better than banks and other brokers may offer, so if you have a currency transaction and would like a quote to compare, then get in touch for free here. 

Here are the main contracts I can offer for currency exchange: 

Spot Contract (Buy your today) – This is the most popular way to buy currency. You fix a rate over the telephone, settle within 2 days, and your currency is transferred by priority transfer to the account of your choice. The rate varies throughout the day as we buy live from the market, and can be up to 5% better than your bank or existing broker may offer. 

Forward Contract (Fix into the Future) –You can fix today’s rate of exchange for up to 2 years, protecting you against volatility and helping you to budget. You lodge 10% of the total to be converted within 2 days, with the remaining balance due when you want your currency transferred. This type of contract really helps budgeting for business’s and those buying or selling property abroad. 

Limit order (Hold out for a better rate) – Secure your currency when your desired rate becomes available; particularly useful if time is on your side and you think the rate may get better. This allows you to aim for a higher rate in the hope that things will get better. 

Stop loss order (Protect against rates dropping) – Your currency is exchanged if the rate goes below a pre-determined level. Combined with a limit order, you can hold out for a better rate while protecting yourself from a sudden fall in the market. This gives you a worst case scenario so you don’t end up paying more than necessary for your currency. 

So that's a brief overview of the main contracts I offer. I also provide a free consultative service for any clients who need the best exchange rates in order to explain what may move the rate, to help you decide when to fix a rate and what contract type to use. Using these types of contract give you control over your currency purchase. The alternative is simply sitting back and hoping the exchange rate will move in your favour. In my experience, hope is not a reliable economic tool. 

To discuss our contract types in more detail and take the first step to taking control of your currency needs, contact me today by sending me a free enquiry by clicking below, and I will get in touch personally to discuss your requirements. 

Click here to send me a free enquiry and get a quote.

Why has Pound/Euro fallen to €1.34?

Friday 2nd October 2015
The Pound/Euro rate has fallen sharply today, dropping from €1.36 to €1.3450 as you can see from the chart below: 

Why has the Pound fallen against the Euro? 

It was actually due to data from the United States. At 13:30pm today the USA released their Non-Farm Payrolls data, which shows the number of new jobs created (not including agricultural jobs as they are seasonal, hence the name non-farm). The markets expected 203,000 new jobs, but the actual figure was a dismal 142,000. 

Because the number was worse than expected, investors sold the US Dollar and bought the safe haven Euro, causing it to gain strength and become more expensive to buy. This is why GBP/EUR fell sharply at 13:30pm as you can see from the graph above. You can see the inverse correlation for Sterling/Dollar, which rose as the Dollar weakened: 

 
 
Need the best exchange rates? 

If you would like to discuss the currency markets to help you decide when to fix an exchange rate, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today. 

I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it's certainly worth getting in touch to see what I can do for you. 

Click here to get your quote and find out how much you could save.

Pound/Euro has fallen 8 cents since last month

Monday 28th September 
The last week has been an interesting one for currencies, with the GBP/EUR exchange rate fluctuating between €1.39 and €1.35. Since last month, it's now fallen 8 cents. This means purchasing €350,000.00 today is costing you around £15,000.00 more than last month, which really illustrates how important it is to get your timing right, and have tools in place like 'Stop Loss' orders to protect against sharp drops in the market like we have seen recently.

Here's how the GBP/EUR rate has moved in the last 2 months:

What has been causing the volatility in currency prices? 

As I explained in my last post, the main reason for the fall in GBP/EUR rates last week was due to a strengthening of the Euro, which has now become more expensive to buy. The European Central Bank opted not to extend their stimulus programme, and have also said interest rates will not be cut. This has supported the Euro and is the main reason for rates dropping away. 

Also the global economic uncertainty has meant that the UK are no longer likely to tighten monetary policy, and this has halted the rise in the value of Sterling. I’d expect the USA to raise interest rates later this year, and the UK may follow them, but not until the latter part of 2016 in my opinion. (The rumour of an interest rate hike generally strengthens a currency due to the higher return on offer for investors).

What could happen to exchange rates this week? 

Below I’ve listed the main data releases I think will affect currency rates for the coming week. For those looking at GBP/EUR, there are lots of inflation figures from the UK and EU, and also UK GDP figures that could affect the rate. 

For GBP/USD, look for hints on interest rates from FED member speeches later today. 

If you have a currency transfer to make, would like a quote, or simply a chat about what is moving exchange rates, click here to send me a free enquiry today. 

Monday 28th September 2015 – Very quiet other that data from the USA – Inflation numbers, Home Sales and Speeches by FED members could all affect GBP/USD. So far rates have risen today, but the general trend in Pound/Dollar rates is likely to be down 

Tuesday 29th September 2015 – There is a speech by Bank of England governor Mark Carney, and he may give clues on UK interest rates that could affect the Pound. Also in the UK today we see Mortgage approval numbers and a measure of Consumer Confidence. Elsewhere, Germany has inflation figures, the USA also releases Consumer Confidence figures. 

Wednesday 30th September 2015 – We have the latest GDP figures today that could affect Sterling. European data includes Germany releases Retail Sales numbers and Unemployment figures, along with EU wide unemployment figures and inflation. The FED’s Janet Yellen gives another speech – watch for any hint on US monetary policy. 

Thursday 1st October 2015 – There is data on manufacturing today from Germany, Europe and the UK, in addition to an ECB monetary policy meeting, all of which could affect GBP/EUR rates. The USA has Manufacturing and Construction data due in the afternoon. 

Friday 2nd October 2015 – We end the week with Jobs day in the USA, with Non-Farm Payrolls one of the key releases that could affect the US Dollar this week. The EU releases inflation numbers. 

If you would like to know how any of the above data could affect exchange rates, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today. 

I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it's certainly worth getting in touch to see what I can do for you.

Click here to get your quote and find out how much you could save.