Friday 28th June 2012 Good afternoon. The last week has seen the Pound/Euro exchange rate fall away as I have been predicting could happen for a few weeks. Sterling also fell against other currencies, due to data showing the UK economy is not quite as healthy as thought. In today’s post I will look over what has caused rates to move recently, what data is coming this week that might affect rates, and look at ways you can protect against the exchange rate moving against you.- Pound weakens following revised growth forecasts
- New Bank of England governor takes over this week
- Announcement due Thursday on QE and interest rates
- Where GBP/EUR and GBP/USD could go in coming months
- Getting the best exchange rates
Pound weakens following revised growth forecasts 
There was a revision to UK GDP this week, which is an overall measure of growth in the economy. The numbers were both good and bad news. Let me explain. The ONS periodically updates its previous measures of growth, and they have said that growth was flat in the first quarter of 2012, revised from an earlier estimate of a 0.1% contraction. This means that the UK economy did not experience a double-dip recession at the beginning of 2012. That was the good news. However the revised figures showed that the economy is now estimated to have dropped by 7.2% from peak to trough, against a 6.3% fall previously recorded. That means that GDP in the first quarter of 2013 was 3.9% lower than its peak in the first quarter of 2008 - previously it was estimated to be 2.6% below. So in a nutshell this means that the UK had fallen deeper into recession than previously thought, meaning we therefore have further to go to recover lost ground. So what does all this mean for exchange rates? Well after the numbers were released, Sterling fell quite sharply against other currencies. This is due to the fact the economy is not as healthy as previously thought, and increases the chance of robust action from the Bank of England to combat the slump. I will go into more detail about what the BoE might do, and the effect this could have on exchange rates… Are you looking for the best exchange rates? Click here. New Bank of England governor takes over this week 
This week the new governor Mark Carney takes of the helm of the Bank of England. So what does he have to look forward to? The economy remains trapped in the longest downturn for a century, the banking system is still broken, and the financial markets are in a febrile state. Interest rates have been at a rock bottom 0.5 per cent since March 2009 and £375billion has been pumped into the economy through quantitative easing to drive growth despite inflation remaining stubbornly above the 2 per cent target. A nice welcome then!He knows the challenges he is facing, and he has already hinted that he will take robust action to return the economy to growth. This could mean, amongst other things, a re-start of Quantitative Easing. If he does decide to add more to the £375bn already pumped into the economy, then the likelihood is that the Pound may weaken significantly, pulling exchange rates down. Of course he may decide instead to start raising interest rates, which may strengthen the Pound due to the better return on offer. Click here to have a free no obligation consultation on exchange rates. First meeting for new Governor this week On Thursday, Carney will make take his first meeting at the BoE’s rate setting Monetary Policy Committee, and it will be interesting to see how many of the 9 members vote for an increase in QE. We’ll have to wait 2 weeks to see who voted for what, but it will be interesting to see what Carney does in his first week in the job. I personally don’t expect QE, but it remains a possibility.Protecting against adverse exchange rate movements 
With so much volatility and uncertainty surrounding the UK and global economy, it’s impossible to predict where exchange rates will move. Let’s look at Pound/Dollar rates as an example: In the last month alone we have seen rates as low as 1.50 and as high as 1.57 – a fluctuation of nearly 5% in just a few weeks, meaning a typical purchase of $350,000.00 has differed in cost by over £10,000, clearly illustrating how quickly exchange rates can move, and the impact of these fluctuations on the cost of a currency purchase. Against the Euro, we have seen rates between €1.13 and €1.23 this year alone. And nobody knows which direction rates will take for the remainder of the year. Some forecasts suggest more QE could weaken Sterling by between 10% and 15% which would mean exchange rates could tumble. Other forecasts suggest an escalation of the EU debt crisis will weaken the Euro and rates will rise. One thing is for sure, rates will not remain stable and any fluctuations can have a huge impact on how much your currency costs you. There are ways to take control of the market however, and not simply leaving things to chance and hoping rates will move the way you want them too. To give you just a few examples: You could fix the rate now for up to 2 years, and only lodge 10% of the total to be converted now. This protects against the rate dropping. Alternatively you could place a ‘Stop Loss’ or ‘Limit’ Order, which automatically secures your rate if it rises above, or drops below, a pre-agreed level. Click here to discuss how we can help you protect against rates falling. So how do you go about getting the best exchange rates? I can help you achieve commercial exchange rates up to 5% better than the banks, and you can also take advantage of my 10 years’ experience in the FX markets in help you decide when to fix a rate. 
Whatever currency you need to buy or sell, why not take advantage of a free consultation with an expert currency broker. I can discuss your requirement, the forecasts and possible direction of your exchange rate, and explain the options you can consider. In this way you can make an informed choice on when and how to fix a rate, and not simply leaving things to chance. As I have said before, hope is not a reliable economic tool. Take action now, click below to send a free no obligation enquiry and take the first step to making the most of your currency. Find out how good our rates are - click here. Economic Data 
Every day economic data is released across the world, and is often the most common thing that affects exchange rates. Below I list the main data releases for the coming week that I think could affect exchange rates. For a free consultation on how these released could affect your particular currency requirement, send me a free enquiry now by clicking here. Monday – Today we have various inflationary measures from Europe, which could dictate future interest rate movements. Staying in Europe, we have Unemployment numbers. In the UK we have Inflation data, and the new Bank of England governor Mark Carney takes over today. Over in the USA we will see Inflation and Construction data that may affect GBP/USD rates. Tuesday – There are only 2 UK releases today Construction data and Retail Sales data. In Europe we have further inflation numbers. Further afield we have an Interest rate decision from Australia. The only other data of note is Factory Orders from the United States. Wednesday – Starting in Australia today, we have Retail Sales and Trade Balance data. In the UK we have House Prices and Inflation data, along with a BoE report on Credit Conditions. Over in Europe its Retail Sales and more inflation numbers. In the USA today we have some unemployment numbers and Trade Balance figures. Thursday – A very important day, as we have the BoE decision on Quantitative Easing and interest rates, and it will be the first meeting with the new governor at the helm. Whether he will make changes to interest rates or QE we will have to wait and see. Shortly after, the ECB make their decision on rates. Friday – Sterling gets a day off today as there are no releases of note. It’s quiet in the EU also, with German Factory orders the only data of note. It’s all about the USA today – Unemployment, Non-Farm Payrolls and average earnings. Expect a volatile day for Pound/Dollar.
Wednesday 19th June 2013 Good afternoon. Sterling exchange rates have fallen back away from recent highs, after high UK inflation numbers and a strengthening Euro. In today’s post I’ll have a look at recent market movements in more detail, and also look at how Quantitative Easing (QE) in the UK and abroad is still driving exchange rate movements. In this weeks report: - Bank of England still split on QE
- UK Inflation higher than expected
- Euro gathers strength after Mario Draghi comments
- FED to make QE announcement this evening.
- Data for rest of the week that might affect rates
- How to get the best exchange rates
Bank of England still split on Quantitative Easing 
Earlier today the Bank of England (BoE) released its latest minutes on its decision to keep the QE programme and interest rates on hold. It showed that for the fifth month in a row, the monetary policy committee (MPC) voted 6-3 in June against increasing the programme of quantitative easing (QE). Sir Mervyn, along with Paul Fisher and David Miles, voted to increase QE by £25bn, as they have done in recent months. Sir Mervyn steps down from his role as BoE governor next month, to be replaced by the former governor of the Canadian central bank, Mark Carney, as I outlined in a recent post. While recent surveys of the economy had indicated an improvement in conditions, they said the outlook was no stronger than projections in the Bank's latest inflation report. They also said that the risks from the Eurozone remained "substantial". As you can see from the graph of today's movements, initially Sterling fell as a result, however it recovered all of it’s losses and just after lunchtime, rates were back where they started, with the Euro at €1.1690 and the US Dollar at $1.5660. As outlined in detail in my last post, there are concerns the new Governor will push for more aggressive QE and this is what is holding the Pound back at the moment. Looking for the best exchange rates? UK Inflation 
Yesterday we saw some surprising inflation numbers for the UK. The rate of consumer price index (CPI) inflation increased to 2.7% in May, up from 2.4% in April, the Office for National Statistics (ONS) said. The Bank of England has said it expects inflation to exceed 3% this year. May's rise in inflation was higher than analysts predicted. Usually high inflation would strengthen a currency, as it means that interest rates could rise to combat the rise in inflation. However with interest rates expected to remain at their record lows for some time to come, this isn’t an option. My view is it really means that investors are very nervous about the BoE's ability to keep inflation in check, and that’s why the Pound dropped immediately after the release.
Euro gains strength, pushing GBP/EUR rates lower.
Just a week or two ago GBP/EUR rates were in the €1.18’s. We have now seen rates drop by a few points, and part of this is due to a strengthening Euro. The reason it has risen in value and become more expensive to purchase was due to comments by the European Central Bank (ECB) President Mario Draghi. In a speech he said that the ECB have numerous standard interest rate policy and other non-standard measures that they can use if necessary.
What these measures are he didn’t expand on, but many think that he will do whatever it takes to protect the Euro, and this could mean negative interest rates. Markets responded positively to the news and the Euro gained strength, pushing GBP/EUR rates lower.Looking to convert Pounds to Euros, or Euros to Pounds? Click here to send me a free no obligation enquiry and find out more about the rates I can provide.
US FED decision on interest rates and QE
At 7pm this evening it’s the turn of the US Federal Reserve to announce its latest decision on interest rates and Quantitative Easing. I don’t expect any movement in interest rates. There has been speculation that the FED would be reducing its QE programme, so should this be the case I would expect the USD to gather strength and pull GBP/USD rates back down.
Only a few weeks ago rates were close to $1.50, but after the biggest 1 day gain in 4 years the rate shot up, and currently sits in the mid $1.56’s. Most forecasts are still suggesting that rates will fall back below $1.50, mainly due to an improving US economy and the threat of further QE in the UK.If you need the best USD rates, click here.
So, will Pound/Euro exchange rates rise or fall?
I’m asked this question many times each day, and the truth of the matter is I don’t know, nobody knows, and it’s impossible to predict. If anyone could then they would become very rich very quickly! What I can do is explain what is driving the market to help you make an informed decision on what to do.
On the one hand, better UK data and continued problems in the Eurozone suggest Pound/Euro rates will rise. Indeed a forecast I read this morning from Barclays suggested just that, and they are predicting that rates will soar above €1.20 this year.
On the other hand, you have robust policy from the ECB that is keeping the Euro strong, and the risk of a devaluing Pound through Quantitative Easing as outlined in my last post. So rates continue to be pulled in both directions, with no indication as to which way it will go in the medium term.Want to discuss market movements? Send me a free enquiry.
How to protect against rates moving against you
Despite the uncertain direction of rates, there are various ways you can protect against adverse rate movements and get the best possible rate.
You could place a Stop Loss order which give you a worst case scenario while still allowing you to aim for a higher rate.
A limit order is the opposite; you place an order to buy at a higher level than the market is currently at, and should rates rise even briefly, your currency is automatically bought.
You could fix today’s rates on a Forward contract for up to 2 years, and only lodge 10 % of the total, thus guaranteeing your rate, protecting against a decline and allowing you to budget.
To discuss your particular requirements, send me a free enquiry by clicking here. I can discuss your needs, run over your options and when you decide to convert your funds, the rates we can source on your behalf are exceptional – up to 5% better than the banks. You could be surprised on how much you can save.Have a free consultation and find out about the rates I can provide.
Economic Data
Tomorrow we have UK Retail Sales in addition to a speech by one of the Bank of England’s monetary policy committee. This could be interesting should include anything to do with Quantitative Easing and the markets will be listening closely to what he has to say.
On Friday we have some minor Public Sector Borrowing figures, but they could still affect the value of the Pound.
Monday 10th June 2013 Good afternoon. It’s been relatively stable in the world of exchange rates over the last week or two. Both the Bank of England and European Central bank have kept interest rates on hold again, as expected. We now look towards the new Governor taking over in a few weeks, and I’ll go in to detail below on how this could potentially weaken the Pound considerably. We also saw a surge in the GBP/USD exchange rate last week, rising more than 2 cents in just a few hours. So what do we have in store in today’s report? - New Bank of England governor could weaken Sterling
- Pound/Dollar rates surge by 2 cents
- Positive comments from ECB increase risk appetite
- Economic data releases this week that might affect exchange rates
New Bank of England governor could weaken Sterling 
The Bank of England has kept its stimulus programme of quantitative easing (QE) unchanged and also held interest rates at 0.5% at its recent meeting last week, as expected. However there could be a change in policy when the new Bank governor, Mark Carney, arrives in July. The BoE has been split in recent months over whether to increase QE from its current level of £375bn. Recent economic data has painted a mixed picture of the UK economy. Official figures showed retail sales fell in April, while unemployment rose in the three months to March. Last month the Bank upgraded its own forecast for growth, and recent data confirmed that the UK has avoided a triple-dip recession, growing by 0.3% in the first quarter of the year. Due to the mixed data, 3 of the 9 MPC members have voted for more QE at recent meetings. There is now speculation the new Governor Mr Carney will pursue more QE which could weaken the Pound significantly. Pound could fall by up to 15% 
Mr. Carney, the current Bank of Canada governor who takes over from Sir Mervyn King in July, said central bankers should consider “changing the policy framework” to stimulate a desperately weak economy. His words were directed at the Bank of Canada but will be seen as a hint that he will push for radical QE action in the UK, where the economy has been stagnant for two years. Some reports have suggested Mr. Carney will try to devalue the pound by as much as 15% in a last ditch attempt to cement the UK recovery. This of course would mean the cost of buying overseas could increase. It seems likely that Mr Carney is going to try and use Quantitative Easing to weaken the Pound. This is because while a high exchange rate is attractive for overseas property buyers, it’s not helpful for returning the UK’s economy to growth. It makes our exports more expensive, and 50% of UK exports go to the Eurozone. A weaker Pound would make exports more attractive and aid economic growth. Looking for the best Pound/Euro exchange rate? Click here to send a free enquiry.Pound/Dollar rates surge by 2 cents 
Last week we saw a surge in the GBP/USD rate, pushing up over 2 cents in just a few hours. This was a little unexpected, and has been put down to increased risk appetite. Generally when there is global economic uncertainty as we have seen recently, investors buy US Dollars as it is seen as a safe haven currency. Comments from Europe last week seem to have calmed the markets a little, and the more positive outlook for the EU has meant investors are more confident. As a result, all these investors that had bought US Dollars sold them off, and it was this that caused the weakening of the USD. Moving forwards, as outlined above the threat of more QE means there is a real chance we could see rates fall back to below $1.50. It all depends on how UK economic data fares in the coming weeks, which I’ll go over later in today’s post. Looking to buy or sell US Dollars at the best rate? Click here to find out more about our rates. Economic data releases this week that might affect exchange rates 
We have quite a few important releases this week that could cause exchange rate volatility. Today we had some minor EU inflation data and investor confidence measures. The numbers were little worse than forecast, and this caused the Euro to weaken off and push GBP/EUR rates close to €1.18. Tuesday - we have Industrial and Manufacturing production figures from the UK at 09:30am. These are a good indicator of UK economic activity, and so can affect Sterling. Also on Tuesday we have the NIESR UK GDP estimate. This is very important as the report is highly reliable, and could affect whether the new BoE governor will pursue more QE when he takes over. Wednesday - UK data is unemployment data. In the Eurozone we have Industrial production measures and inflation data, which could affect future interest rate movements in the EU. Also on Wednesday we have the latest decision on Interest Rates from New Zealand, so this might affect GBP/NZD rates. Thursday - Nothing of note from the UK on Thursday, but we do have a monthly report from the ECB so we could see movements in the GBP/EUR rate. Most data today though is from the United States – Jobless Claims, Retail Sales, Trade Balance figures. If these numbers are better than expected, then GBP/USD could drop away. Friday - sees a host of inflation and employment data from the EU, so expect a choppy day for the value of the Euro. We also have inflation data from the USA. Want to talk about how economic data could affect your currency requirement? Click here to send a free enquiry and have a free consultation. Getting the Best Exchange rates 
The rates I can help you achieve are up to 5% better than banks offer, so the savings you could make are significant. We are fully authorised and regulated by the Financial Conduct Authority, so you can be confident your funds are safe. Make a free no obligation enquiry today to see how much you could save.
There was a revision to UK GDP this week, which is an overall measure of growth in the economy. The numbers were both good and bad news. Let me explain. The ONS periodically updates its previous measures of growth, and they have said that growth was flat in the first quarter of 2012, revised from an earlier estimate of a 0.1% contraction. This means that the UK economy did not experience a double-dip recession at the beginning of 2012. That was the good news. 
This week the new governor Mark Carney takes of the helm of the Bank of England. So what does he have to look forward to? The economy remains trapped in the longest downturn for a century, the banking system is still broken, and the financial markets are in a febrile state. Interest rates have been at a rock bottom 0.5 per cent since March 2009 and £375billion has been pumped into the economy through quantitative easing to drive growth despite inflation remaining stubbornly above the 2 per cent target. A nice welcome then!
With so much volatility and uncertainty surrounding the UK and global economy, it’s impossible to predict where exchange rates will move. Let’s look at Pound/Dollar rates as an example: In the last month alone we have seen rates as low as 1.50 and as high as 1.57 – a fluctuation of nearly 5% in just a few weeks, meaning a typical purchase of $350,000.00 has differed in cost by over £10,000, clearly illustrating how quickly exchange rates can move, and the impact of these fluctuations on the cost of a currency purchase. 
Whatever currency you need to buy or sell, why not take advantage of a free consultation with an expert currency broker. I can discuss your requirement, the forecasts and possible direction of your exchange rate, and explain the options you can consider. In this way you can make an informed choice on when and how to fix a rate, and not simply leaving things to chance. As I have said before, hope is not a reliable economic tool. Take action now, click below to send a free no obligation enquiry and take the first step to making the most of your currency. 
Every day economic data is released across the world, and is often the most common thing that affects exchange rates. Below I list the main data releases for the coming week that I think could affect exchange rates. For a free consultation on how these released could affect your particular currency requirement, send me a free enquiry now by clicking here. 
