Pound vs Euro, Pound vs US Dollar

Friday 30th December 2011
Good morning. Welcome back to the blog after the Christmas break. Today we'll take a quick look at where rates have moved against the Euro and US Dollar, and when markets open again on Tuesday, I'll post a detailed update on market movements over the last week. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1938
• GBP/USD 1.5421
• GBP/AUD 1.5196
• GBP/NZD 1.9988
• GBP/CHF 1.4517
• GBP/CAD 1.5752
• GBP/ZAR 12.523
• GBP/JPY 119.63
• GBP/DKK 8.8733
• GBP/NOK 9.2823
• EUR/USD 1.2913

Pound falls to a near 3 month low vs US Dollar

Sterling has fallen to the lowest against the US Dollar in over 2 and a half months. The USD has attracted broad safe-haven flows after weak demand at an Italian bond auction highlighted risks the euro zone debt crisis will worsen next year.

Analysts expect the pound to suffer versus the dollar in 2012 as worsening European debt problems could wreak havoc on London's financial sector, while speculation about more Bank of England quantitative easing may also sting sterling in the new year.

Pound remains supported against the Euro

Sterling is quite well supported against the weak Euro, following Italian bond auctions that saw yields of 7%, seen as unsustainable and weakening the Euro slightly Rates remain in the €1.19's.

Concerns over the fragility of the British economy are seen extending well into 2012 with BoE policymakers leaving the door open for more quantitative easing in February.

"Whilst some further tranches of QE from the BoE are likely, the fact that the ECB are very likely to keep adding liquidity throughout the new year will keep the euro on the back foot and euro/sterling could see a test lower," said Richard Wiltshire, chief FX broker at ETX Capital.

Have a very Happy New Year, and regular blog posts will resume every working day when the markets re-open on the 3rd of January.

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Blog shutdown for Christmas

Tuesday 20th December 2011
Good morning. The blog will now close for a short time while I take a much needed Christmas break! Blog updates will resume on the 30th of December.

The live rates in the sidebar will continue to be updated every 30 seconds. You can also keep abreast of rate movements in the following way:

Click here for the most recent market Report

Click here to follow rate updates on Twitter

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 19th December 2011
Good morning. So, it's the usual Monday morning take on the previous weeks movements in the currency markets.

In this week’s Report:

• Pound/Euro rates peak at 10 month high
• Euro depreciates due to lack of resolution to debt crisis
• UK unemployment at 17 year high
• Round up of the week’s data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

The markets verdict on last week’s EU summit became clear as the week saw investors move towards safe-haven currencies like the USD. Sterling was well supported with Cameron’s decision to exclude the UK from the new Eurozone treaty as we saw the GBP/EUR rate reach a new high of 1.1949 (Interbank).













Tuesday saw Germanys Chancellor Angela Merkel declare that no further money will be made available for the European Stability Mechanism and that the ECB will not become a lender of last resort. This immediately affected the value of the Euro pushing it up towards the 1.19 level. In the UK, Consumer Price Index (CPI) fell from 5% to 4.8%, but events in the Eurozone overshadowed this.

The Euro weakened further on Wednesday with the GBP/EUR rate reaching a ten month high. UK jobless figures were released and had increased by 128k reaching over 2.64 million, the highest number of unemployed since 1994. With poor data being released from both the UK and Euro zone you might expect that the pairing would stay relatively stable. The reason why this didn’t and hasn’t happened is due to the uncertainty to what is going to happen with the single currency.

Credit ratings of the world’s biggest lenders have come under pressure as weak economic growth and concerns about whether European politicians have done enough to end the Eurozone debt crisis. Some of the world’s most powerful investment banks were downgraded by ratings agency Fitch.

France was warned by credit ratings agencies that it could be downgraded over the Eurozone crisis. Some in France suggest that any downgrade should instead start with the UK, however Downing Street brushed off the remarks stating “we have put in place a credible plan for dealing with our deficit”. This statement is key to why Sterling is performing well at the moment; the markets like the fact a plan is place to reduce our deficit, and this is why Sterling is supported despite poor economic data.

So in summary rates are currently at a 10 month high and rates do look to be stabilising as EU leaders carry on discussing how to combat the debt crisis. Rate forecasts in a recent Sunday Times article for 2012 varied between 1.14 and 1.25 showing the lack of consensus and the fact it could go either way depending on how the single currency reacts.

If you need to buy or sell Euros, send me an enquiry now.

Sterling vs. US Dollar;


Sterling’s fortune against the Greenback last week was in vast contrast to its performance against the Euro despite Europe’s crisis being the main driver as explained in the Euro report above.

Sterling fell to its lowest level in three weeks on Monday as investors questioned the progress made at last week's EU summit, driving demand for the safe-haven U.S. currency as analysts played down the impact on Sterling of UK Prime Minister David Cameron's veto of any EU budgetary rules, despite concerns that he risks isolating Britain in the 27-nation bloc.













Europe issues aside, the US economic outlook showed signs of improvement and further bolstered the Dollar as unemployment figures month on month returned better than expected, manufacturing output was up from the preceding month, inflation held steady and the FOMC (Federal Open Market Committee) left their monetary policy unchanged and highlighted the turmoil in Europe as a big risk to the U.S. economy.

Coupled with the positive week the US had in terms of economic indicators, cable would continue to take its lead from the Euro crisis, eventually forcing Sterling to a two month low moving towards the close of the week.

As the Euro zone crisis deepens there is every chance we could see the Dollar strengthen further unless of course the European treaty can somehow restore confidence to the markets in which case we may see a renewal of risk appetite as investors begin to test the water once more.

As the levels of uncertainty in the markets and volatility increase and as we near the Christmas holiday season it may be a prudent decision if you have an impending transfer to keep in close contact with your FCG account manager to ensure your maximising your return on your funds.

If you need to buy or sell US Dollars, send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – New Zealand has business confidence data that might affect GBP/NZD rates. Closer to home Rightmove has it’s house Price index, reflecting the health of this sector. In Euro, there is construction data, but of course continued developments in the Eurozone will likely have the biggest effect on rates.

Tuesday – Today the UK will see Nationwide and Gfk Consumer Confidence figures which may affect Sterling. In Australia the minutes to the recent interest rate decision are released. There is lots of data from Germany also today; Confidence measures, Inflation numbers, Business climate and current account assessments, all of which could affect the Euro. Across the pond, the USA released housing and building data, and Canada has a host of inflation data.

Wednesday – The main UK data today is Public Sector borrowing. A deficit would weaken Sterling. There are no key releases from the Eurozone. In the states there are Homes Sales numbers, Canada releases Retail Sales, and in New Zealand GDP figures are released at 21:45pm.

Thursday – A busy day for the UK and US. Starting at home, we have GDP data, Business Investment numbers, and Current Account data. In the USA there are also GDP releases, in addition to Jobless Claims and personal expenditure.

Friday – The Japanese Emperors Birthday, although this is unlikely to affect the currency markets. Of more importance will be UK mortgage approvals. In the states there are quite a few releases; Personal Consumption, Durable Goods Orders and New Home Sales.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Will the Pound/Euro rate go up or down?

Friday 16th December 2011
Good morning. It was a slightly calmer day in the markets yesterday, with the Pound remaining around the 10 month high against the Euro hit on Wednesday. The Pound also recovered slightly against the US Dollar. UK retail sales helped boost the Pound a little, as analysts said the underlying trend was surprisingly robust as previous months were revised higher. Below you can see how the Pound fared against the Euro and US Dollar during trading yesterday:

~Currency movements on Thursday 15/12/11~











Taking stock of the recent Pound vs Euro gains

So as we know, Sterling/Euro rates have risen this week to their highest in 10 months. But will rates continue to rise? Should you buy your Euros now or wait?

It's crucial to remember that this weeks gains for the Pound have been driven by negative sentiment towards the euro due to the escalating debt crisis. There has been no real good economic news from the UK.

Analysts said sterling's recent gains versus the euro mostly reflected euro zone debt worries after a European Union summit last week offered no hope the crisis will be resolved soon. This lack of a resolution has meant investors worried about further depreciation of the single currency moving funds out of the Euro, weakening it further.

Indeed, many of my clients this week have been converting Euros to the safe haven Swiss Franc or to Sterling. If you are considering doing the same, contact me now to find out about our commercial exchange rates.

I've been asked many times this week whether rates will continue to rise. While it's impossible to predict this, my view and indeed many analysts view is that it may struggle to get much higher, as GBP/EUR rates will face resistance at this level. This is where limit orders usually by large corporate firms are filled at certain levels, flooding the market and bringing rates back down.

"The 1.20 level in sterling/euro is a big level of resistance. A lot of orders from UK importers come in around there," said Lee McDarby, head of dealing for corporate and institutional treasury at Investec.

What else are the analysts saying? Will Pound/Euro go up or down?

There are widley contrasting forecasts coming out at the moment. Some have predicted more gains for sterling versus the euro in the coming weeks due to the safety of government bonds. However others think otherwise.

But Jane Foley who is a senior currency strategist at Rabobank, said although sterling was benefiting from some safe haven flows out of the euro zone, investors were likely to be unsettled by poor UK fundamentals, meaning any upside could be limited. Also political events in the UK could play their part. If there is any sign of dissent in the coalition after last weeks EU veto by David Cameron, this could pull the Pound back down. Political uncertainty is not good for a currency.

What you should do if you want to achieve the best exchange rates

Everybody’s requirement is different, as are peoples attitude to risk. Therefore the best course of action may differ depending on your requirements and risk appetite. Why not take the time to have a free consultation on your requirement. I can explain all the different options available to you in order for you to make an informed decision on what to do.

And don't forget, whatever course of action you take, our exchange rates are up to 5% better than banks and other financial institutions, and on large volumes this difference could save you a fortune.

Click Here to send me a free enquiry and book your free 10 minute consultation.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound hits 10 month high vs Euro

Thursday 15th December 2011
Good morning. Investors continued to shun the Euro yesterday, weakening it further pushing GBP/EUR rates to a 10 month high, best since February. Sterling remained largely driven by negative sentiment towards the euro, leaving the Pound vulnerable as it fell to two-month lows versus the US Dollar. Later in the day, GBP/EUR rates fell back away, and the charts below show how exchange rates fared yesterday.

~Currency movements on Wednesday 14/12/11~











Pound vs Euro hits 10 month high

As the charts above show, the Euro weakened yet again yesterday and pushed the exchange rate up to a 10 month high. The euro was pressured as Italy had to accept higher borrowing costs, and the currency markets are also pricing in possible downgrades of euro zone countries after last week's European Union summit offered no hope of an immediate resolution to the debt crisis.

This weakened the Euro making it even cheaper to buy, and this is the reason for the gains. Later in the afternoon rates fell back away slightly but remain supported at very good buying levels.

The fact remains that the Pounds gains are really just a reflection of euro zone debt worries rather than any particular strength for Sterling. Also the EU veto by Cameron last week could be negative for the pound in the longer term. The key to whether rates will rise further will be whether the Bank of England opt for any more Quantitative Easing.

You can read more about yesterdays decline in Pound/Euro rates in, of all places, the Daily Mail. (apologies, it's not the type of newspaper I would normally link to!)

Sterling falls against the US Dollar

As the charts above show, Pound/Dollar rates fell yesterday. Same reason as usual! Euro weakness causing Dollar strength, making it more expensive to buy.

Pound rises against Australian Dollar















Sterling made good gains against the Aussie yesterday, and the Pound gathered strength in the light of the EU debt problems. Despite the UK economy suffering, it's seen as a safer bet than the Euro, helping push rates up. Rates gained by 1% yesterday.

Today's Data

A very busy day for the UK and EU. Starting in Europe, we have German Inflation data, and EU wide inflation data. There is also a monthly report from the ECB that could affect the Euros value. We then see further EU inflation numbers and unemployment data. On to the UK, there are Retail Sales to watch for in addition to Construction data. Stateside, Jobless measures and inflation data will be watched closely.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound surges to new 9 month high vs Euro

Wednesday 14th December 2011
Good morning. Sterling/Euro rates rose again yesterday, gaining quite a bit during afternoon trading after reports that German Chancellor Angela Merkel rejected raising the upper limit of funding for the euro zone bailout mechanism, broadly weakened the single currency.

It was a fresh 9 month high, and in addition to the comments from Merkel, markets are disappointed by the outcome of last week's EU summit, and the threat of a credit downgrade is also looming over the EU. Sterling fell a little against the US Dollar, but remains fairly range bound at the $1.5500 to $1.5600 mark. The charts below show how exchange rates moved during trading yesterday (Tuesday) and you can see the surge in GBP/EUR in the afternoon after the comments from Merkel:

~Currency Movements Yesterday (13/12/11)~











Pound hits new 9 month high against the Euro

The fact that Angela Merkel rejected raising the upper limit of funding for the euro zone bailout fund had an immediate effect on the Euros value, weakening significantly and pushing GBP/EUR rates to fresh 9 month highs, approaching €1.19.

Also affecting rates, as mentioned in previous posts this week, the EU summit last week failed to reach any sort of agreement, or measures that would see the European Central Bank step up purchases of bonds. If they did it would relieve pressure on the struggling euro zone, and aso boost confidence in the markets. However the lack of this has meant investors selling off the Euro and it has weakened accordingly.

There is also the threat of a downgrade in the EU. Standard & Poor's warned last week that they could downgrade many Eurozone countries. Another credit agency Moody's said earlier this week it would also review the ratings of all 27 European Union states early next year. They are worried that last week's EU summit created no solution.

Weak Euro, but no fundamental strength in Sterling

The Prime Minister last week vetoed proposed treaty changes at the EU gathering. Analysts said that while this might create problems in the future, for now markets like the safety of UK assets, as they feel that at least in the UK there is a credible fiscal strategy in place to tackle debt, unlike the EU. So while we have our economic problems in the UK, the Pound remains supported against the single currency.

Yesterday we saw some inflation data which was pretty much as forecast, leading some to question whether more stimulus in the UK would be needed in the form of Quantitative Easing. The Bank of England's chief economist said yesterday that inflation would probably drop to just over 3 % early next year.

However many in the market are forecasting UK economic data like low jobs, high unemployment, slow retail sales and falling output could drive the BoE to resort to more asset purchases in coming months. As I've been saying in recent posts, more QE would flood the market with Pounds and push exchange rates lower. Last time QE was announced, GBP/EUR rates fell by 3 points in 2 days.

Will the Pound go higher against the Euro?

Impossible to say. Of course further issues in the Eurozone could weaken the Euro even more, but what other poor data could you hope for?! They have cut interest rates, many EU countries are in crisis and investors are dumping the Euro - this is what has caused it to weaken.

Some clients that need to buy Euros may want to see if it will go higher still, but in my opinion you would be holding out for an inch, and risking losing a yard. While of course it could keep rising, I believe there is much more to lose than there is to gain. Just over a month ago rates were around €1.13 - today buying €150k is £6000 cheaper due to the higher rates.

What would I do?

If I had Euros to buy, I probably wouldn't want to risk losing the gains seen in recent weeks. You could either buy your currency now, or if you are adamant you want to aim for more, then I would place a Stop Loss order - this is where you can place an order to buy should rates fall below a pre-agreed level. In this way you can still hope for the market to rise further, but have a safety net in place should rates drop. this is a good strategy to employ to make sure you don't lose out on the recent gains.

To discuss this type of order, or indeed anything to do with getting the best exchange rates, click here to send me a no obligation enquiry. I can provide a free consultation as to your options, and of course our exchange rates are significantly better than you can achieve at the bank, so the savings you make could be considerable.

When getting in touch, ask for Alastair Archbold and quote 'BLOG' to receive free transfers.

Best GBP/EUR rates in 9 months

Tuesday 13th December 2011
Good morning. The Pound surged against the Euro during trading yesterday afternoon, hitting a fresh 9 month high - the best exchange rates to buy Euros since March this year. Why did the Pound go up against the Euro? It's due to the single currency being sold off. As there was no real progress made at the summit last week, the Euro has weakened and become cheaper to purchase.

This also caused investors to flock to the safe haven US Dollar yet again, pushing Pound/Dollar rates lower. Below you can see how GBP/EUR & GBP/USD rates fluctuated during trading yesterday (Monday).

~Currency movements yesterday (12/12/11)~











Lack of progress in Europe weakens Euro; GBP/EUR up

European Union leaders last week struck a historic agreement for a new treaty for deeper integration within the euro zone. However, analysts and policymakers have remained very sceptical indeed that a solution will be found to the crisis. This was reflected in the currency markets yesterday, with a mass sell off of Euros by investors, significantly weakening the Euro and making it cheaper to buy. This pushed the Sterling/Euro exchange rate to a 9 month high; the best it's been in 9 months, much to the delight of clients requiring Euros.

Peter Kinsella, a currency strategist at Commerzbank said yesterday that "We still don't have an effective implementation regime in the EU, so nothing has changed on a fundamental basis,". So as markets don't see that anything has changed, worries about the EU resurfaced yesterday and this was the reason for the jump in rates into the €1.18's.

Given that in October the rate was €1.13, this is a significant increase. To put this in to real terms, buying €150,000 now compared to just a month or two ago is over £5500.00 cheaper.

If you want to take advantage of the current rate, even if you don't need your Euros for up to 2 years, you can lock the rate with a Forward contract. You only lodge 10% of what you want to convert, and the remaining 90% when you want your currency. In this way you can fix your rate at the high and be protected against any potential fall.

If you need to buy Euros, click here and send us a free enquiry.

Sterling falls against US Dollar

Despite the surge in rates against the Euro yesterday, the Pound didn't fare so well against the US Dollar. Due to the EU debt crisis having no solution, as I've outlined above investors have sold the Euro for the 'safe haven' US Dollar, and this strengthened the US currency making it more expensive to purchase.

This is reflected in the charts above, where you can see the steady gain in GBP/EUR rates but the choppy trade against the USD that saw us end the day down.

Today's Data

Today we have the first UK data of the week: House Price Data, Retail Price Index, and Consumer Price Index. In the Eurozone we will see German economic sentiment measures. Stateside there are Retail Sales numbers, Economic Sentiment measures and an interest rate decision where we expect the FED to leave rates unchanged at 0.25%.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 12th December 2011
Good morning. As usual for Mondays, today I will take a look at events in the past week that have affected exchange rates, GBP/EUR & GBP/USD in particular, along with a breakdown of economic data releases that might affect exchange rates.

In this week’s Report:

• EU Summit fails to agree way forward
• Sterling/Euro rates near 8 month high
• GBP/USD rates fall as USD strengthens
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Last week was an extremely volatile one for Sterling/Euro exchange rates, with wild swings in buying levels as events in the Eurozone affected the Euros value. On Thursday, the ECB decided to cut interest rates down to 1% whilst the Bank of England kept interest rates at a record low 0.5% and announced no change to its £275 billion asset purchase programme. This was widely expected, and there was little effect on the markets, in fact the Euro gained a little strength after the decision. This was not to last however, as ECB President Mario Draghi started an aggressive sell-off across the spectrum of risky assets, stressing that the central bank would not help with financing member countries’ debts and adding that the bank doesn’t see a high risk of deflation. Mr Draghi confirmed that the decision was not made unanimously.













Summit talks took place on Friday with EU leaders agreeing stricter budget rules for the Euro zone but failing to secure changes to the EU treaty among all 27 member states. Countries also failed to reach an agreement on giving a banking license to the Euro zone's permanent bailout fund, limiting its firepower.

EU central banks will provide €200 billion to the IMF to help fight the debt crisis, with the majority of the money (€150 billion) coming from Eurozone member states. Private-Sector Involvement (PSI) in shouldering future losses on member countries’ bond holdings will follow IMF rules, rather than the haphazard approach taken with Greece, and the operation of the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM) facilities will be turned over to the ECB. Separately, the European Banking Authority said EU banks will need to raise an additional €114.7 billion in new capital to help them weather the debt crisis.

Overall, this is a hugely disappointing outcome. These seemingly weak measures do not go nearly far enough, and as a result the Euro has weakened significantly, helping GBP/EUR rates remain high.

On the other side of things, Britain said it could not accept proposed amendments to the EU treaty after failing to secure concessions for itself. Analysts said while it may be positive for Sterling if a proposal from the EU for a tax on financial transactions did not impact the UK, there were also concerns that the UK would be left isolated, with much less influence in Europe. First impressions are that EU leaders have not quite shot themselves in the foot by alienating British support (even assuming it was ever offered) but it looks as though they have considerable ground to cover.

Sterling stayed close to an 8 month high versus the Euro on Friday, with a choppy morning session reflecting uncertainty over the outcome of a European summit that did little to impress markets overnight. The Pound looked on track to test its strongest level against the Euro since March as it benefited from investors seeking alternatives to the Euro. Even after all of this, investors still remain concerned about the risks facing the UK economy and its vulnerability in the event of a severe downturn in the Euro zone.

Do you need to buy or sell Euros? Send us a free enquiry now.

Sterling vs. US Dollar;

It has been a pretty flat week in the U.S with markets waiting to see what happens at the latest Eurozone summit.

The American economy has been experiencing a period of positivity recently with a raft of good data being released last week. The unemployment rate is at its lowest level in two and a half years, manufacturing appears to be picking up and early reports suggest that the holiday shopping season is off to a strong start. Slowly but surely the U.S seems to be heading in the right direction, which has been represented in the markets with rates holding at a relative low.













But any further gains for the Dollar have been held in check by the threat of major issues in the Eurozone. The U.S economic recovery could be derailed seeing as America's finances are so closely tied to what happens across the Atlantic and the picture is not rosy. The Eurozone is the single biggest customer for American goods, so if they're not buying, U.S. businesses suffer. "The situation in the euro area is rapidly deteriorating and contagion is spreading," said Pier Carlo Padoan, the chief economist of the Organisation for Economic Co-operation and Development (OECD).

Last week leaders holding all-night talks in Brussels added 200 billion euros ($267 billion) to their crisis-fighting war chest and tightened anti-deficit rules, which was hailed by European Central Bank President Mario Draghi as a “very good outcome.”

It is a waiting game to see what happens in the Eurozone but what we do know is that when Europe has problems they become everyone’s problems. A complete European meltdown could kick off a chain reaction that might lead to a global credit crisis. On the other hand we could see some sort of resolution that increases confidence in the Euro.

In a nutshell, it is events in the Eurozone that are driving GBP/USD rates. When there is uncertainty, investors flock to the perceived safety of the Dollar, and this in turn strengthens it, making it more expensive and pushing exchange rates down. If there is a resolution in the EU, it could reverse this flight to safety and we could see the USD weaken again, however it’s impossible to predict what affect global events will have on GBP/USD rates.

The fact of the matter is, things are on the edge whichever way you look at it. It is vital to keep in touch with your account manager at the Foremost Currency Group to make sure you keep abreast of the goings-on in the market. We can ensure that if you are buying or selling currency in the next 12 months you have all the information available and we can help you make an informed decision to making the most of your currency.

If you need to buy or sell US Dollars, send us a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – There is no UK data today. Australia released Trade Balance figures, and Germany releases price index data. The main even is a monthly budget statement from the USA which could affect GBP/USD rates.

Tuesday – Today we have the first UK data of the week: House Price Data, Retail Price Index, and Consumer Price Index. In the Eurozone we will see German economic sentiment measures. Stateside there are Retail Sales numbers, Economic Sentiment measures and an interest rate decision where we expect the FED to leave rates unchanged at 0.25%.

Wednesday – Unemployment figures are released for the UK today in addition to earnings data. In the Eurozone Industrial production figures are of note. In the USA we will see import prices. Australia releases inflation forecasts also today.

Thursday – A very busy day for the UK and EU. Starting in Europe, we have German Inflation data, and EU wide inflation data. There is also a monthly report from the ECB that could affect the Euros value. We then see further EU inflation numbers and unemployment data. On to the UK, there are Retail Sales to watch for in addition to Construction data. Stateside, Jobless measures and inflation data will be watched closely.

Friday – We end the week with Consumer Confidence numbers for the UK, Trade Balance figures are also released today. The USA and Canada both release measures of inflation.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Crucial day for exchange rates: Euro, USD, AUD

Friday 9th December 2011
Good morning. It was a very choppy day indeed in the currency markets yesterday, with an interest rate cut in the Eurozone and negative comments by the ECB president weakening the Euro and strengthening safe haven currencies. We saw Sterling/Euro rates gain however Sterling/US Dollar rates dropped significantly, as the charts below show:

~Currency movements yesterday~











Bank of England leave rates and QE on hold

Yesterday the Bank of England's (BoE) Monetary Policy Committee (MPC) voted to keep interest rates on hold at 0.5%, and announced no change to its Quantitative Easing (QE) programme. There was little reaction in the currency markets to the rate decision given many investors had already positioned for it to be unchanged. As the decisions were as predicted, there was no real change for the Pound, however there probably will be more QE in the coming months, putting Sterling at risk.

"There will be more asset purchases at some point next year, the UK economy is definitely fragile and needs easing," said Ankita Dudani, G10 currency strategist at RBS.

QE is seen as negative for sterling because it involves flooding the market with pounds and reducing demand, thus lowering exchange rates.

European Central Bank (ECB) cut interest rates

The ECB yesterday decided to cut interest rates down to 1%. This was widely expected, and there was little effect on the markets, and in fact the Euro gained a little strength after the decision. This was not to last however, as the ECB presient Mario Draghi ruled out any substantial aid for any ailing and indebted eurozone states, and this had quite an impact on exchange rates. Mr Draghi confirmed that the decision was not made unanimously.

ECB President's comments significantly weaken the Euro, strengthen the US Dollar

There had been speculation amongst analysts that the ECB may be preparing to bail out Italy, however Mr Draghi ruled this out during the post interest rate decision press conference: "We have a treaty that says no monetary financing to governments."

The euro weakened significantly as soon as he made the comments, and fell more than a cent against the dollar, while Sterling/Euro rates rose on the news. Looking at the charts above, you can clearly see the effect of his comments around 1pm. Sterling/Euro rose as the single currency weakened, and this also drove investors to the safe haven US Dollar. When there is uncertainty, investors buy the US Dollar, and this in turn strengthens it becoming more expensive to purchase. The charts reflect this and this also explains why GBP/EUR rose while GBP/USD fell.

EU summit ends today

The moves from the ECB yesterday come ahead of a "do-or-die" Brussels summit of European Union heads to hammer out a deal on how to tackle the eurozone debt crisis, including a potential new treaty. The 2 day EU summit ending is expected to agree tough new rules and automatic fines to ensure that eurozone governments cut their borrowing to below 3% of their GDP.

There is a very good and detailed article here on the BBC website that explains the ins and outs of the summit.

So what effect will the EU summit have on exchange rates?

The short answer is nobody knows. If the summit agrees on measures that the markets think will put an end to speculation on the future of the Euro, then we could see the Euro strengthen and GBP/EUR rates falling. If however there is no consensus reached, this could leave the markets wondering what will happen with countries like Greece and Italy.

If Greece were to default and exit the eurozone the consequences could be dire; a run on Greek banks, contagion spreading to other eurozone banks and Greeks facing even worse hardship than now, with the cost of imports rocketing. The priority is to reassure investors enough to halt the rise in eurozone bond yields. The leaders believe they can do that, so long as heavily indebted countries like Greece stick with deep cuts in spending and other austerity measures.

With regards to exchange rates, tomorrows developments will likely have an effect one way or the other. Put simply, if problems are solved, GBP/EUR could fall and GBP/USD could rise. If there is continued uncertainty, GBP/EUR could remain supported and GBP/USD could fall further.

What you should do to ensure you get the best exchange rates

You've already taken the first step by finding my blog and doing a little research on what may happen with exchange rates. I have worked in the Foreign Exchange markets for 10 years, and have a detailed knowledge of the currency markets. I also work for one of the UK's leading FSA registered foreign exchange brokerages, and the rates we can achieve for our clients are up to 5% better than banks and other financial institutions.

So, take the second step to making the most of your currency:

Click here to send us a free enquiry.

There is no cost or obligation involved, and you can take advantage of a free consultation on your particular requirements, helping you to make an informed decision on when to buy. As long as you are looking to convert £5000 or more, and can have an account for us to wire your currency to, we can help. Get in touch today.

Sterling Euro rates surge on renewed EU concerns

Thursday 8th December 2011
Good morning. So why did the exchange rates go up so suddenly yesterday? There was a significant increase in Sterling exchange rates, with Sterling/Euro rising by over 1% before falling back away slightly. The Euro was knocked by comments from a German government official which tempered optimism over a comprehensive solution to the euro zone's debt crisis at this week's EU summit. This weakened the Euro significantly, and also strengthened riskier currencies such as Sterling.

The below charts show how the Pound fared against the Euro and US Dollar yesterday, showing the significant jump in rates after the comments:











Pound/Euro rates gain significantly on EU summit concerns

The current exchange rate movements are being driven by swings in sentiment ahead of the EU summit which begins this evening, with EU leaders trying to agree on a solution to the debt crisis that has been affecting exchange rates for some time now.

The comments yesterday cast doubt whether a solution will be found, and it shows that Germany is increasingly pessimistic about the chances of a deal to solve the euro zone debt crisis at the summit this week. The official said that because some governments don't seem to grasp the gravity of the situation, a solution is unlikely to be found.

This caused weakness in the single currency, and Sterling exchange rates gained by over 1% - a big gain in just one day. To put this into perspective, buying €200k at yesterdays high compared to yesterdays low would save you £2000.00.

"For sterling it's all about the headlines coming out regarding the EU summit at the moment which are proving very difficult to trade," said Kathleen Brooks, research director at FOREX.com.

Sterlings gains are despite continuing concerns over the UK economy

British industrial output fell more than expected and at its fastest pace in six months in October, according to data released yesterday. This has increased concerns that the economy may drop back into recession after a run of weak economic data.

"October's official UK industrial production figures are even weaker than we or the consensus had expected and suggest that the risk that the overall economy re-enters recession in the fourth quarter remains high," said Samuel Tombs, economist at Capital Economics.

So as has been the case for some time, the Pounds value is being driven by events in the Eurozone. With a solution to the crisis now seeming unlikely, riskier currencies such as Sterling are benefiting as investors do not want to hold funds in Euros, and the demand for the Pound is the reason for the increase in exchange rates.

Today's Data

Earlier in the week we saw interest rate decisions for New Zealand, Canada and Australia – today is the turn of the UK and EU. They will announce any change in interest rates, and whether they will pursue any Quantitative Easing. It could be a volatile day for GBP/EUR rates. Later in the day, the USA released various jobless and employment numbers.

Summary

The gains seen yesterday have pushed GBP/EUR rates back to a near 9 month high. This has happened several times in the last few months, and each time it doesn't last at these levels for very long, as any negative data regarding the UK economy can quickly pull rates back down again.

If you need to buy Euros, consider taking advantage of the spike while it is here. We have various types of currency contract that let you fix the current rate, even if it will be some time before you need your currency.

Contact me today by clicking here, and take advantage of a free consultation on the options available to help you achieve the best exchange rates.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Pound Sterling Forecast vs Euro 2012

Wednesday 7th December 2011
Good morning. It was a bit of a mixed day in the currency markets yesterday. Initially Sterling rose against both the Euro and US Dollar as Standard & Poor's warned about a mass downgrade if EU leaders fail to act decisively. However good EU data and poor UK data reversed this trend, and Sterling exchange rates slipped throughout the afternoon. After the rate/chart snapshot, today we'll look in detail at developments regarding the EU debt crisis, and what the future may hold for GBP/EUR rates.











• GBP/EUR 1.1616
• GBP/USD 1.5620
• GBP/AUD 1.5176
• GBP/NZD 1.9967
• GBP/CHF 1.4417
• GBP/CAD 1.5741
• GBP/ZAR 12.432
• GBP/JPY 121.27
• GBP/DKK 8.6335
• GBP/NOK 8.9512
• EUR/USD 1.3443

Standard and Poor's in EU downgrade threat; weakens Euro

Initially yesterday, Sterling/Euro rates rose after Standard & Poor's said it may carry out a mass credit downgrade of euro zone countries if EU leaders fail to move decisively on solving the region's debt woes at this week's summit. The ratings agency said the decision was prompted "by our belief that systemic stresses in the eurozone have risen in recent weeks to the extent that they now put downward pressure on the credit standing of the eurozone as a whole".

Markets took this as Euro negative, and as a result GBP/EUR rates rose as the single currency became cheaper to purchase. The gains were very shortlived however, as the above charts illustrate. As we'll see in a moment, poor UK data combined with better than expected figures from the EU caused Sterling rates to fall through the afternoon.

Sterling exchange rates fall on fundamental data

So why did exchange rates fall through the afternoon? It was due to much better than expected German industrial orders data, which was then compounded by weak UK retail sales and housing market surveys which highlighted the fragility of the UK economy.

German industrial orders rose by 5.2% in October, which was more than twice the amount forecast by analysts. As the figures were so good, it painted a better economic picture in the EU, and this is why the Euro gained strength throughout the afternoon.

It has eased concerns about the euro zone economy, and so yesterday mornings gains were very short lived indeed.

UK economic data also disappointed yesterday, pulling Sterling exchange rates lower as a survey showed the biggest drop in Retail Sales since May. This indicates a lack of consumer confidence and as a result Sterling fell against other currencies.

So what is the Pound/Euro forecast for December and for 2012?

In recent months, Sterling has been supported versus the euro in recent weeks by investors that are concerned about the EU, moving their funds out of Euros and into UK gilts, however this is unlikely to continue should the UK economic picture worsen.

Many currency analysts think that ongoing signs of weakness in the UK economy will put a dampener on the pound as a fragile economy will require the Bank of England to continue buying assets from the market, which involves flooding the market with the currency. If it were not for the problems in the EU, GBP/EUR rates would be significantly lower than they are.

If a consensus is reached this week in meetings between Germany and France, then we could see the Euro stabilise and gather strength. Coupled with a weakening pound, this could mean significantly lower exchange rates. If however problems in the EU continue, the Pound could remain supported against the Euro, but if there is more QE to come from the BoE, many question how long any support could last.

Summary

In short, much depends on any resolution to the EU debt crisis, as this has been driving exchange rates globally, and not just between Sterling and Euros. Whatever currency you need to buy or sell, this could have significant impacts on the exchange rate you're able to achieve.

If you are looking to achieve the best possible exchange rates, then I can provide you with a free consultation on what direction rates may move in, and strategies you can employ to ensure you don't lose out should rates move against you.

Click here to send me an enquiry, and take the first step to achieving the best possible exchange rates and make the most of your currency.

Sterling Euro forecast for December 2011

Tuesday 6th December 2011
Good morning. Sterling rose against the US Dollar yesterday and was up ever so slightly against the Euro, as the Pound tracked a rally in the euro after an agreement between France and Germany on proposals to help solve the euro zone crisis raised confidence in currencies perceived to be higher risk. The pound was also supported by better-than-expected services PMI data. Below you can see how exchange rates moved throughout trading yesterday, and a snapshot of rates as at 08:30m this morning.











• GBP/EUR 1.1685
• GBP/USD 1.5632
• GBP/AUD 1.5300
• GBP/NZD 2.0094
• GBP/CHF 1.4475
• GBP/CAD 1.5890
• GBP/ZAR 12.593
• GBP/JPY 121.52
• GBP/DKK 8.6877
• GBP/NOK 9.0262
• EUR/USD 1.3373

Pound makes slight gains against US Dollar and Euro

As you can see from the above charts, the Pound rose a little against the Euro and US Dollar yesterday, although not by much and the market was generally flat for most of the day. The reasons for the slight gains were the talks in the EU, where France and Germany agreed a series of reforms with regards to the EU debt crisis.

Many in the market think this could be the start to finding a solution to the debt crisis, and this in turn supported riskier currencies. As Sterling is seen as a riskier investment, the increased confidence caused the Pound to rise slightly against the Euro and Dollar, but fell slightly against the Australian Dollar as the antipodean currency is riskier, and so gained more and became more expensive to purchase.

UK Growth falters, giving uncertainty to the direction of Sterling

There were also better than expected PMI figures released yesterday, however despite the improved headline PMI reading, the survey also showed employers shed jobs at the fastest pace in a year, and the majority of market analysts that UK economic growth is faltering. The UK economy looks likely to by either flat or show minimal growth in the last few months of the year.

Further Quantitative Easing could push exchange rates lower

The problem is that signs of weakness in the UK economy will put a damper on the pound as a fragile economy will require the Bank of England to continue buying assets from the market, which would flood the market with the currency. The last time Quantitative Easing was announced Sterling/Euro fell by nearly 3 points, and it's likely the BoE will need to pursue more QE in the coming months, and have hinted as much in recent publications.

Investors and currency speculators of late have been selling the pound for the US Dollar, whenever headlines suggesting policymakers are struggling to make progress in resolving the debt crisis hit risk appetite. This in turn has strengthened the US Dollar and brought GBP/USD rates down in recent weeks

Today's Data

A very quiet today for the UK, with only Retail Sales being released. Canada and Australia have an interest rate decision. Germany releases Factory Order data, and the USA has measures of economic optimism.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 5th December 2011
Good morning. So, the start of another week and as usual today I will give a detailed outlook of recent movements in Sterling/Euro, Sterling/US Dollar, and a round up of the weeks economic data that could affect exchange rates.

In this week’s Report:

• Global Central Banks in Co-Ordinated move
• Chancellors budget statement gives Sterling strength
• Riskier currencies benefit from Central Bank move
• Round up of the week’s data that may affect rates

(For currencies other then GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Last week saw the volatility of the currency markets continue. At the start of the week we saw Sterling lose ground against the Euro, with markets waiting in anticipation for George Osborne to update the country on the state on the UK economy and the government’s future plans in his autumn statement. Despite Mr Osborne’s announcement of slower growth and tough austerity measures the markets reacted positively and the GBP/EUR was pushing back toward the €1.17 level.













However the gains did not last long, with the sudden announcement that six central banks led by the Federal Reserve made it cheaper for banks to borrow dollars in emergencies in a global effort to ease Europe’s sovereign-debt crisis. This was in response to increased tension in global financial markets. Almost immediately the GBP/EUR rate fell by 1%.

The cost for European banks to borrow dollars dropped from the highest in three years, amid continued concerns about the euro’s worsening debt crisis. Two hours before the Fed announcement, China cut the amount of cash that the nation’s banks must set aside as reserves for the first time since 2008.

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the Fed statement said.

As rates stabilised towards the end of the week, there still seems to be no end in sight for the troubled Eurozone. Friday saw German Chancellor Angela Merkel make a keynote speech and said Europe is working towards setting up a "fiscal union", in an effort to resolve the Eurozone’s debt crisis. She went on to say an EU treaty was needed to set up such a union and impose financial discipline.

So in summary, rates have continued to trade in a €1.16 to €1.1730 range, as global economic uncertainty continues. It’s worth noting however that rates are still significantly higher than just a few months ago, and not far from a 9 month high.

With so much uncertainty surrounding the currency markets, if you need to buy Euros in the next 6 months, consider a Forward contract. This is where you can fix the current exchange rate, even if you don’t need your currency for up to 2 years. You simply fix your rate with us, and lodge a 10% deposit of the total you need to convert. You settle the remaining 90% when you want your currency to be transferred. In this way you can budget effectively, safe in the knowledge you have secured rates at a high while being protected against any adverse exchange rates movements.

If you are looking for the best exchange rates, click here and send us a free enquiry.

Sterling vs. US Dollar;

The start of last week saw disappointing data released from the UK , with CBI reported sales figures for November showing a sharp decline and net consumer credit figures also dropping sharply. Conversely, we had a few positive batches of data released across the pond, with a huge increase in US consumer confidence for November and a slight rise in new home sales in October.

Despite this, the Pound actually made gains against the Dollar over Monday and Tuesday. As is often the case, strong US data influenced investor’s risk sentiment, encouraging a move away from the safe-haven of the US dollar and into riskier assets, weakening the greenback in the process.













Midweek saw the market make sharp moves upon the announcement that the Federal Reserve along with the European Central Bank, the Bank of England and the central banks of Japan, Switzerland and Canada would make it cheaper for the banks to borrow dollars, providing further liquidity in the market and easing the mounting pressure in the Eurozone. Consequently, the GBP/USD showed a good advance with mid-market rates moving up from 1.5567 to close Wednesday at 1.5706. To put this into perspective, a typical purchase of $200,000 would have seen a £1137 variation in price.

Although Sterling had gained against the Dollar it remained vulnerable as concerns increased about the state of the UK economy after data released on Thursday showed that the manufacturing sector contracted for a second successive month. The UK PMI reading fell to 47.6 in November, its lowest level since June 2009. This caused GBP/USD to bounce around and investors were sceptical that the rally on the back of the coordinated central bank action was sustainable.

Positive data out of the US on Friday strengthened the Dollar against Sterling, pushing GBP/USD rates lower, after it was announced that unemployment had fallen by 0.4%. All in all, it was a choppy week’s trading, with investors quick to book profits on sharp spikes for fear of the next negative headline out of Europe.

If you are looking for the best exchange rates, click here and send us a free enquiry.

Weekly Economic Data that may affect exchange rates

Monday – It’s a quiet start to the week in terms of UK data, with only Inflation data being released today. From the Eurozone we have some inflation numbers, Retail Sales figures, and measures of investor confidence. I the USA Durable Goods Orders are released, in addition to manufacturing production.

Tuesday – Again very quiet today for the UK, with only Retail Sales being released. Canada and Australia have an interest rate decision. Germany releases Factory Order data, and the USA has measures of economic optimism.

Wednesday – Australia has GDP figures released this morning. UK data comprises of Industrial and Manufacturing production. New Zealand announces their latest decision on interest rates.

Thursday – Earlier in the week we saw interest rate decisions for New Zealand, Canada and Australia – today is the turn of the UK and EU. They will announce any change in interest rates, and whether they will pursue any Quantitative Easing. It could be a volatile day for GBP/EUR rates. Later in the day, the USA released various jobless and employment numbers.
Friday – A busy end to the week for the UK, with Inflation data and Trade balance figures being released. Germany also has inflation data, and the USA releases consumer sentiment measures.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Sterling vs Euro Outlook Forecast Predictions

Friday 2nd December 2011

Good morning. Rates remained fairly flat yesterday, with no surprise announcements or adverse data, so there were no dramatic swings in rates as we have seen earlier in the week. Today after the rate snapshot we'll have a detailed look at what the next few months may hold for Sterling/Euro. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1650

• GBP/USD 1.5701

• GBP/AUD 1.5312

• GBP/NZD 2.0095

• GBP/CHF 1.4374

• GBP/CAD 1.5899

• GBP/ZAR 12.671

• GBP/JPY 122.07

• GBP/DKK 8.6603

• GBP/NOK 9.0873

• EUR/USD 1.3473



Pound/Euro rates near a 9 month high



Exchange rates for Pounds to Euros are currently very close to their best in 9 months. So why have exchange rates increased, and what is likely to happen in the next 3 months?



The main reason for rates increasing is the EU debt crisis. As I’m sure you will have seen in the news over the last few months, problems in Greece, Italy, Portugal, Ireland and Spain have caused global economic uncertainty, and this has weakened the Euro making it much cheaper to purchase. In the last 3 months, exchange rates have increased by 3.5% which may not sound like much, but when converting £10k this means you achieve over €400 Euros more. There are real fears that the crisis will spread to other countries within the EU, and it is this that is keeping the euro weak.



So will Sterling/Euro rates continue to rise?



It’s impossible to predict exchange rate movements, but it is important to remember there is no fundamental strength in the Pound. The reason it is performing so well against the Euro is the fact it’s perceived as a safer bet, so savers and investors worried about the debt crisis have been buying the Pound, which has supported it against the Euro.



Chancellor George Osborne earlier this week updated MPs on the state of the economy and the government's future plans in his Autumn Statement as the Office for Budget Responsibility (OBR) publishes its latest growth and borrowing forecasts. Despite most news outlets pitching the statement as doom and gloom amid revised growth forecasts for the UK, the markets have taken it positively as reflected in the Pound rising yesterday. He said slower than expected growth meant it would take longer to reduce the budget deficit, meaning tough austerity measures will extend beyond the next election in 2015.



That is likely to underpin the UKs AAA credit rating and encourage more flows into safe-haven UK gilts. That in turn has supported Sterling despite the prospect of more Quantitative Easing (QE) by the BoE and the risk of recession. Analysts say the fact the UK is following an austerity plan and the BOE is proactive in easing monetary policy is a positive for sterling in the coming months.



Also highlighting the volatility in global markets at the moment, was the recent move by some of the world's biggest central banks, when they announced a programme of co-ordinated action designed to support the global financial system.



The US Federal Reserve, the European Central Bank (ECB), the Bank of England and the central banks of Canada, Japan and Switzerland are all involved. They will make it cheaper for banks to buy US dollars, which they hope will ultimately help businesses and households access finance more easily.



As the eurozone debt crisis has deepened, banks have found it harder to access finance. Analysts said the central banks' move would help to relieve some of this strain within the global financial system.



It should be noted however that recent economic figures suggest that the UK will fall back into recession, and with the Bank of England likely to pursue further QE in the coming months, many analysts expect the Pound to fall. QE floods the market with Sterling which reduces demand, weakening the currency and pulling exchange rates down.



If you need to buy currency in the next 3 months, what are your options?



With the UK’s economic future uncertain, there is every chance rates could fall back away as quickly as they have risen. It’s only the EU debt crisis keeping rates where they are, and given GBP/EUR is near a 9 month high, if you need to buy Euros in the next 3 months, consider a Forward contract.



This is where you can fix the current exchange rate, even if you don’t need your currency for up to 2 years. You simply fix your rate with us, and lodge a 10% deposit of the total you need to convert. You settle the remaining 90% when you want your currency to be transferred. In this way you can budget effectively, safe in the knowledge you have secured rates at a high while being protected against any adverse exchange rates movements.



To discuss any of the above further, contact me today by clicking here. We can give you a free consultation on all the options available to you, whatever your currency requirement, helping you to make an informed decision on when to fix your rate, and make the most of your currency.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Global Central Banks in move to increase liquidity

Thursday 1st December 2011
Good morning. Risk appetite has returned to the markets after a surprise joint action by the worlds central banks. The FED, the European Central Bank and the central banks of Britain, Canada, Japan and Switzerland agreed to cut the cost of existing dollar swap lines by 0.5% in a bid to help European banks hurt as a result of the euro zone debt crisis. This pushed GBP/EUR down and GBP/USD up as riskier currencies benefited. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1651
• GBP/USD 1.5660
• GBP/AUD 1.5408
• GBP/NZD 2.0248
• GBP/CHF 1.4288
• GBP/CAD 1.5973
• GBP/ZAR 12.760
• GBP/JPY 121.44
• GBP/DKK 8.6590
• GBP/NOK 9.0595
• EUR/USD 1.3425

Worlds Central Banks in joint action

You can read a detailed report on what happened with the central bank move here on the Telegraph website, that gives a pretty good summary. The surprise announcement by the central banks yesterday is to create liquidity in financial markets, and it fuelled the market's appetite for risk and encouraged investors to sell the safe haven US Dollar. The effect on the currency markets was instant - the GBP/EUR rate dropped from €1.1720 to €1.1630 in around 10 seconds, and the GBP/USD rate rose by around 2 cents in just a few minutes.

Many clients have asked why the Pound/Euro rate fell while other rates rose. This is due to risk sentiment. The move created more appetite for risk in the markets, so any currency seen as risky such as the Euro gained on the news, becoming more expensive to purchase. Safe haven assets like the USD and GBP fell, and so we saw the US Dollar become cheaper to buy, but the Euro more expensive.

Analysts said sentiment was lifted by the hope that the plan may limit market volatility and go some way to helping find a solution to the ongoing debt and economic problems in the eurozone. In a separate move, China also said it would free up money for its banks to lend. This move also helped soothe concerns about the speed with which its economy was slowing.

This should, according to policymakers, trickle down and make it easier for businesses and households to get access to finance, giving confidence to the market and larger economy in general. As well as cheaper US dollars, the central banks will also provide easier access for lenders to other major currencies as and when they need it.

Markets have settled down this morning, and rates stand at the levels above at around 08:30 this morning.

So what should you do if you need to buy Euros?

If you need to buy Euros in the next 3 months, consider a Forward contract. Rates yesterday were close to a 9 month high, but the developments yesterday have started to pull rates back down, and given the UK economic recovery is still uncertain, the Pound could fall further.

How do Forward contracts work? This is where you can fix the current exchange rate, even if you don’t need your currency for up to 2 years. You simply fix your rate with us, and lodge a 10% deposit of the total you need to convert. You settle the remaining 90% when you want your currency to be transferred. In this way you can budget effectively, safe in the knowledge you have secured rates at a high while being protected against any adverse exchange rates movements.

Send us an enquiry now by clicking here, and have a free consultation on the options we can offer you to help you get the best exchange rate.

Today's Data

In the UK today we see further House Price data from the Halifax, in addition to some inflation figures. Australia has some releases today including Building Permits and Retail Sales. In the Eurozone there are various inflationary measures. From the USA we have Jobless Claims and Unemployment data.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Sterling strengthens after Budget Statement

Wednesday 30th November 2011
Good morning. The Budget statement yesterday reinforced Sterling as a safe haven currency within Europe, pushing exchange rates higher against other currencies, and to a near 9 month high against the Euro as the EU debt crisis deepens. So why has the Pound risen against the Euro? Today we'll take a look at what strengthened the Pound and the forecast for GBP/EUR rates. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1710
• GBP/USD 1.5535
• GBP/AUD 1.5598
• GBP/NZD 2.0492
• GBP/CHF 1.4355
• GBP/CAD 1.6076
• GBP/ZAR 13.073
• GBP/JPY 121.04
• GBP/DKK 8.7067
• GBP/NOK 9.1185
• EUR/USD 1.3265

UK Budget Statement strengthens Sterling

Chancellor George Osborne yesterday updated MPs on the state of the economy and the government's future plans in his Autumn Statement as the Office for Budget Responsibility (OBR) publishes its latest growth and borrowing forecasts. You can read a detailed report on what happened here on the BBC site, as here we will only focus on the effect on exchanger rates.

Despite most news outlets pitching the statement as doom and gloom amid revised growth forecasts for the UK, the markets have taken it positively as reflected in the Pound rising yesterday. He said slower than expected growth meant it would take longer to reduce the budget deficit, meaning tough austerity measures will extend beyond the next election in 2015.

That is likely to underpin the UKs AAA credit rating and encourage more flows into safe-haven UK gilts. That in turn has supported Sterling despite the prospect of more QE by the BoE and the risk of recession. Analysts say the fact the UK is following an austerity plan and the BOE is proactive in easing monetary policy is a positive for sterling in the coming months.

In contrast, the euro zone debt crisis keeps getting worse with little policy action to stop the contagion. The debt crisis continues to deepen in the EU, and this has weakened the Euro further yesterday, pushing GBP/EUR rates back above €1.17.

There remains no fundamental reason to buy the pound, however amid the problems in Europe it has become a safe haven currency for savers worries about keeping Euros, and this has supported Sterling and is the reason exchange rates have risen.

So if you need to buy Euros in the next 6 months, what are the options?

• Buy Forward now – this way you know where you are, but of course can’t take advantage if the rate does get higher.

• Wait and see – it could go a little higher, but not by a huge amount. The risk here of course is rates falling away.

• Use Stop Loss/Limit Orders – with these, you can place a ‘Limit order’ to buy at a level that’s not currently available, 1.18 for example. At the same time you can place a ‘Stop Loss’ order to buy should rates fall below a pre-agreed level, for example 1.15. This way you have a ‘worst case scenario’ should rates fall, but if they don’t you can still take advantage of any gains

• Hedge your bets – Forward buy half what you need now, and take a gamble on the other half. This way you have some level of protection regardless what happens with rates.

To discuss any of the above options further, or to find out more about how much you can save by using us to secure your currency at commercial exchange rates:

Click here to send us an enquiry and have a free consultation on your options.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

UK Budget statement today

Tuesday 29th November 2011
Good morning. The Pound rose slightly against the USD yesterday, but remained range-bound against the Euro as comments from Bank of England policymakers that more asset purchases may be needed to boost UK economic growth helped to curb some of sterling's gains. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1630
• GBP/USD 1.5514
• GBP/AUD 1.5594
• GBP/NZD 2.0508
• GBP/CHF 1.4305
• GBP/CAD 1.6034
• GBP/ZAR 12.923
• GBP/JPY 120.86
• GBP/DKK 8.6499
• GBP/NOK 9.1344
• EUR/USD 1.3336

UK Budget Statement today

Chancellor George Osborne will today outline plans to boost the UK's slow economy. This is against expected gloomy forecasts for growth, after the OECD warned yesterday that the UK was likely to slip back into recession.

They predicted a 0.03% contraction in the UK economy this quarter, and a further 0.15% the next. Bank of England governor Sir Mervyn King told MPs that growth would be flat for the next six months as the eurozone crisis threatens the UK's recovery. This has kept Sterling in check against other currencies and has limited gains in exchange rates.

In his statement later he is expected to confirm that growth will be lower and borrowing much higher than planned. Many analysts have also warned that a nationwide strike of public sector workers scheduled for tomorrow may also sour sentiment for UK assets among foreign investors if they call into question the future success of dramatic austerity measures.

There is much negativity at the moment that could hurt the Pound, despite the EU debt crisis also weakening the Euro. Without the problems in Euro exchange rates would be significantly lower, so if you need to buy Euros consider taking advantage of the current rates, as negative sentiment today could lower exchange rates.

If you are looking for the best exchange rates, send us a free enquiry now. Our rates are up to 5% better than you can achieve at the bank, representing significant savings.

Today's Data

In addition to the budget statement, there is UK House Price data is released today, in addition to mortgage approvals and lending data. Germany has some Retail Sales figures, and the EU releases Industrial Confidence, Consumer Confidence and Economic confidence. From the USA we have consumer confidence and Housing Prices.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.