How to get the best Pound/Euro exchange rates

Wednesday 21st August 2013 
Good afternoon everybody. Pound/Euro rates have steadied since my last post, and remain a little above the €1.17 level. Against the Dollar, Sterling sits just under $1.57. This is around 2 month highs in both cases. In today’s post I will look at how recent economic releases have affected exchange rates, and whether Pound/Euro rates are likely to go up or down in the coming weeks. In today’s report: 

• UK Public Sector borrowing worse than expected, but Pound remains strong
• Greece may need another bailout, how would this affect GBP/EUR? 
• Growth forecasts are increased for the UK, supporting Sterling 
• US Fed minutes this evening may affect exchange rates 
• Getting the best exchange rates

UK borrowing disappoints, but Pound remains strong

I’m going to start in the UK today. This morning we saw the latest Public Sector borrowing figures, and they were actually quite a bit worse than expected. Despite the numbers disappointing, Sterling has not weakened, and in fact has risen slightly against the Euro. 

This is partly due to the fact the data remains subject to revision. For example, the £823m surplus recorded in July last year was originally reported as a deficit, so the markets haven’t taken much notice of the numbers. 

Indeed financial analysts played down the importance of the figure, with many saying they still expected to see steady improvement in the government's finances over the rest of the year, as the economy continued to recover. So due to this, the data did little to take the steam out of rally that has seen sterling rise 3% against the dollar and 2.3% against the euro this month, driven by improving UK economic data that has suggested interest rates may rise sooner than the Bank of England has indicated. 

Britain is doing quite well. The economy grew 0.6% in the second quarter of this year, up from a 0.3% rate during the previous three months, with the faster pace expected by economists to continue into the autumn. Also helping the Pound is he CBI business lobby group, which has increased its forecast for UK economic growth for 2013 from 1% to 1.2%. 

It also increased its forecast growth for 2014, from 2% to 2.3%, saying that the forward guidance on interest rates recently given by new Bank of England governor Mark Carney should add to positive sentiment. 

"The economy has started to gain momentum and confidence is picking up, but it's still early days," said CBI director-general John Cridland. 

Recent figures and surveys have shown activity in manufacturing, services, construction and the housing sectors all gathering pace. The most recent official figures for the UK economy from the Office for National Statistics showed it grew by 0.6% in the three months to June. The figure means that the economy has now recouped more than half the 7.2% of output lost in the 2008-09 recession. 

So all in all, things are looking much better for Sterling than they have of late. If you look at the chart showing GBP/EUR rates over the last 3 months, you can see the decline has been reversed, and exchange rates are looking much better for those that need to buy Euros. 

Looking for the best exchange rates for Euros? Click here. 

Another Greek Bailout on the cards?

Over in the Eurozone, debate about whether Greece will need another bailout has intensified, after the EU's economic and monetary commissioner declined to rule it out. Greece has received two bailouts totalling about 240bn euros (£205bn). A condition of the current bailout deal is that Greece makes cutbacks and restructures its economy. 

Yesterday Germany's Finance Minister, Wolfgang Schaeuble, said: "There will have to be another programme in Greece." The Euro weakened a little, but not too much because the news is not a surprise. Economists have long predicted a third rescue package for Greece, which is struggling to control its mounting debt burden as the economy shrinks under tough austerity measures. 

US FOMC minutes this evening 

The next main data release that will affect exchange rates is the latest FOMC minutes which are released this evening. Investors braced for a U.S. Federal Reserve report which may shed light on when it will trim its QE stimulus policy. 

Confirmation that the Federal Open Market Committee is veering towards slowing its bond buying programme in September could see strengthen the Dollar, which would probably cause GBP/USD rates to drop, however if we see a more cautious approach by the Fed, I would expect to see the US Dollar weaken, pushing GBP/USD rates higher. 

It will likely affect other currencies such as GBP/EUR, as sentiment towards the US Dollar often drives other currency pairs due to its safe haven status.

Do you want to get the best exchange rates? 

Hopefully my blog is a useful resource for those that are keen to know what moves exchange rates, in order to help decide when to fix an exchange rate. I have been a commercial foreign exchange broker for 8 years, and have a very detailed knowledge of the currency markets. 

I currently work for one of the UK’s leading foreign exchange brokerages, and the rates I can source are up to 5% better than banks of other brokers can offer. 

• So, are you looking for the best exchange rates?
• Keen to know when to buy your currency? 
• Worried about rates moving against you? 
• Want to know what your options are? 
• Unsure how data releases may affect your exchange rate? 

If you have considered any of the above, then I think you would find a free consultation with me very useful indeed. It’s free and carries no obligation at all, and simply means you can discuss your requirements with an expert. In this way you can learn about all the options available to you and make an informed choice on when to fix your rate. 

And of course when you decide to do this, the rates you can achieve using my services could save you thousands of Pounds. 

Make your free enquiry with me now by clicking here. 

I look forward to hearing from you.

Pound/Euro at 2 month high following unemployment figures

Wednesday 14th August 2013 
Good afternoon everyone. Since my last post, Sterling has continued to make gains, helped by strong unemployment figures this morning. In today’s report I’ll have a look at this which has caused the gains for the Pound, the latest news that the EU has emerged from recession after 18 months, and what the latest Bank of England minutes mean for exchange rates in the short to medium term. 

So in today’s report: 

• Strong Unemployment figures cause Pound to rise
• Pound/Euro at 2 month high 
• EU exits recession after 18 months, but Euro fails to strengthen 
• Latest minutes from the Bank of England’s Monetary Policy Committee 
• Data for the next 7 days that may affect exchange rates 

Strong Unemployment figures cause Pound to rise 

The latest UK unemployment figures were released this morning, they made good reading and the Pound has risen as a result. While unemployment held steady, which had been expected, the outlook was much brighter, as the number of people looking for work fell 4,000 to 2.51 million in the second quarter, according to figures from the Office for National Statistics. 

Jobless claims declined for the ninth straight month by 29,200 to 1.44 million, taking the rate to 4.3pc, the lowest since February 2009 and the number of people in employment rose by 69,000 in the three months to June to 29.78 million, compared to the three months to March. 

So what does it all mean for exchange rates? Well, today's unemployment figure has added significance after the Bank of England Governor Mark Carney last week announced that interest rates would not be raised from their record low of 0.5pc until the unemployment rate fell from its current level of 7.8pc to below 7pc. Mr Carney said it meant that more than 750,000 extra jobs would have to be created before the end of 2016 for rates to start rising again. 

As the latest numbers are heading in the right direction, it gave Sterling a decent boost, and helped push exchange rates through the €1.17 level vs. the Euro, which is the highest in 2 months.

If you're looking for the best Pound/Euro rates, send me a free enquiry now by clicking here. 

EU exits recession after 18 months, but Euro fails to strengthen 

The Eurozone has emerged from recession after a record 18 months of economic contraction. Their GDP grew by 0.3% in the second quarter of 2013, slightly ahead of forecasts, the Eurostat agency said. However, the overall figure masks the mixed economic fortunes among the countries that make up the 17-country Eurozone area. 

It didn’t have much impact on exchange rates though. To be honest they were expected to exit recession anyway, and while it’s good news, it was already priced in to the market. This meant the Euro did not strengthen any further, and the markets brushed off the data. There was no impact on Pound/Euro rates. 

Should the EU continue to post robust figures however, we could see the single currency start to gain strength. This may cause GBP/EUR rates to drop back away. 

Worried about GBP/EUR rates dropping? Send me a free enquiry to discuss your options. 

Latest minutes from the Bank of England’s Monetary Policy Committee 

Bank of England governor Mark Carney received almost complete support for his new forward guidance policy from his colleagues on the Bank's Monetary Policy Committee (MPC). The latest MPC minutes show eight out of nine of the MPC's members voted for the strategy at its August meeting. 

Meanwhile, all nine MPC members agreed that the £375bn asset purchasing programme, known as quantitative easing (QE), should remain in place and that interest rates should hold steady at 0.5%. 

Again mostly this was expected, but the unanimous support did give the Pound a boost, compounding the unemployment numbers – the net result was a good rise in Pound/Euro rates today. 

Want to take advantage of the good Pound/Euro rates? Send me a free no obligation enquiry today. 

Summary 

Pound/Euro is now at a 2 month high. There is still much uncertainty, so if I needed to buy Euros I would strongly consider fixing a rate now to take advantage of the gains, and protect against a possible downturn in rates. With the EU exiting recession, more good news could make the Euro expensive again. 
 
For those selling Euros back to Pounds, in recent weeks it was a 2 year high. We’re drifting away from that now, with the Pound gaining lots of strength in the last few weeks, and rates are now moving against you. 

 To get the best exchange rates, timing is very important. IN order to get the timing right, you need a good currency broker on your side to explain what is moving the market, your options, and different ways to approach getting the best exchange rate. 

If you need the best rates of exchange, send me a free enquiry now by clicking here. I can discuss your requirements and help you get rates that are up to 5% better than banks offer. 

Are you looking for the best exchange rates? Send me a free enquiry now.

Data for the next 7 days that may affect exchange rates 

Below I list the main data releases for the next 7 days which I think could have an effect on exchange rates. If you would like to know the specific data releases that might affect the currency you need to buy or sell, send me a free enquiry now. 

Thursday 15th – Quite quiet today as EU markets are closed for Assumption day. In the UK we have some Retail Sales figures which are a pretty good barometer of overall economic activity. Other than that all data is stateside: inflation data, Jobless Claims and Industrial Production. 

Friday 16th – Nothing of note from the UK today. We do have Trade Balance numbers and CPI data from the Eurozone, so we may see some movement in GBP/EUR rates despite no UK data. In the USA we have Building permits and a consumer sentiment survey. 

Monday 19th – Unusually there is no data of note today. At all. 

Tuesday 20th – Again quiet in the UK, in fact the only interesting data is Import and Export numbers from Germany along with some minor German inflation data. 

Wednesday 21st – UK Public sector borrowing figures are released today. Also we have the FOMC minutes that could affect GBP/USD exchange rates. 

Click here to send me a free no obligation enquiry today. 

Sterling surges higher as Mark Carney issues Forward Guidance

Wednesday 7th August 2013 
Good afternoon. Today has been extremely volatile on the currency markets with Sterling surging higher against other currencies. The new Bank of England governor Mark Carney addressed Parliament and delivered his Quarterly inflation report. 

After months of decline for Sterling, the Pound has surged against other currencies today, so in my post this afternoon I will analyse what he said, the impact on the economy, why it caused exchange rates to rise, and what this means for exchange rates going forwards. 

‘Forward Guidance’ from the Bank of England 

The new Bank of England (BoE) governor Mark Carney today addressed parliament, giving his quarterly inflation report, his first since taking over the helm last month. It was already widely expected he would outline his new policy of ‘Forward Guidance’ and indicate that interest rates would remain low for some time. 

How did it affect exchange rates? 

 

As you can clearly see from the chart, when the speech started at 10:30am, Sterling immediately dropped quite significantly, as had been expected. You can see the dip at 10:30am this morning when Pound/Euro rates fell from 1.1530 to 1.1440.

The dip was not to last however, and very quickly the Pound recovered its losses, and kept on going. Again looking at the chart you can see the exchange rate rocketing higher, above where it started the day, and eventually levelled out around 1.1645 against the Euro. 

Click here to get a quote on our commercial exchange rates. 

So why did the rate drop, and then make a huge recovery? 

Firstly the reason it dropped was speculation that he would indeed say interest rates would remain low for some time. Market analysts, myself included, have been saying for some time that if he did indeed say interest rates would remain low, expect Sterling to drop, and initially this is indeed what we saw. 

The reason there was such a massive bounce back was the terms that he outlined as parameters for when rates would start to rise. He pledged to keep them on hold until the official unemployment rate fell below 7%. This is his ‘forward guidance’. Under its central forecast, though, the Bank does not expect unemployment to fall to 7pc until September 2016. So in effect, he’s saying interest rates will remain low for another 3 years. 

So you would have expected the Pound to fall further on this news, however Economists said traders were expecting a much tougher target than 7 % unemployment, hence the reason for today’s robust performance for Sterling. The Institute of Economic Affairs said Mr. Carney's forward guidance was "the most dangerous development in UK monetary policy since the late 1980s". So experts are mixed on the effect it will have. 

So what does this mean for the economy? 

If rates do remain on hold until 2016, they will have been at their record low for nearly 8 years. The last time this happened was the 12 years that spanned the Second World War and the period of austerity that followed. 


The economy does seem to be recovering however. Recently we’ve seen good Retail Sales, good growth figures, strong manufacturing and industrial production, good growth forecasts and decent house price increases. And although welcoming the recovery, Mr. Carney stressed that it “remains weak by historical standards”. 

“There is understandable relief that the UK has begun growing again. But there should be little satisfaction. Much is at stake as we seek to secure the recovery and return inflation to target,” he said. 

The Bank expects inflation to remain at 2.9pc this year, fall to 2.4pc by the end of 2014 and hit 2pc in late 2015. The Bank stressed that it will keep the stock of quantitative easing steady at £375bn until the end of 2016 as well, and could increase it if the economy slipped backwards. 

You can read a detailed report here on the BBC website of what he said and the impact on the economy.

What does this mean for exchange rates? 

Right now this means good buying opportunities for anyone that is buying a foreign currency with Sterling. The gains are a surprise to the market, and so if you need to buy currency, consider taking advantage of the gains we have seen. We can fix your exchange rate for up to 2 years into the future, and you only lodge 10% of what you want to convert now. This protects you from the rate falling. 

Moving forwards much will depend on economic figures. If they start to disappoint, then we could still see further QE from the BoE which would cause the Pound to fall back away. 

Need Euros at the best exchange rate? Send me a free enquiry. 

For those selling converting currency back in to Sterling, rates are now moving against you. A week ago the Euro to Pound rate was close to a 2 year high, with Forward guidance in place and the economy recovering, further good figures could mean the rate gets worse for you. 

Selling property abroad and want the best Euro to Pound rate? Make a free enquiry now and find out about your options.

How to get the Best Exchange Rates

The first step is to send me a free enquiry by clicking here. I can discuss your requirements in detail, run over the options you have available, and help you decide on the optimal time to convert your funds. This means you can make an informed choice on what is best for you.

When you decide to fix a rate, the levels I can achieve are incredibly good commercial rates, that are up to 5% better than you can achieve at banks and other financial institutions. 

Send me a free enquiry now and find out how good our exchange rates are.