Pound remains above €1.20 vs the Euro

Friday 29th November 2013
Good afternoon everyone. A quick update before the weekend to outline what's been happening with exchange rates, and in particular the Pound/Euro exchange rate forecast.

BoE Governor causes Pound to rise above €1.20

Yesterday the governor of the Bank of England, Mark Carney, gave a speech. You can read a report here on the BBC website that outlines what he talked about. Most of the press has been reporting on the move of the 'Funding for Lending' scheme which has been moved from individuals to small business. 

What we're interested in however is what effect his words had on exchange rates. Mr Carney's predecessor Mervyn King had a habit of 'talking down' the Pound to such an extent that usually as soon as he opened his mouth, Sterling fell before he had actually said anything!

Mr Carney in contrast seems to do exactly the opposite. In recent speeches his comments have been very UK positive and have therefore caused the Pound to rise. This is what we saw yesterday, and the Pound rose to over €1.20 again against the Euro, but this time rates remained just above this level all day on Thursday. 

What's happened today to Sterling exchange rates?

Today, Sterling slipped from a 11-month high against the dollar and fell against the single currency as investors digested the Bank of England's surprise move to scale back stimulus for the housing sector.

Initially, investors had concluded the Bank might be taking the first step towards tightening its ultra-loose monetary policy, and the pound rose. But some analysts said not using conventional monetary policy to curb housing prices meant interest rates could remain low for longer.

However in the last few minutes, Pound/Euro has shot up to €1.2022 and Pound/Dollar has risen to $1.6364. I put this down to profit taking: as the European markets closed at 4pm a few minutes ago, investors wound up their positions ahead of the weekend, causing a spike in the value of the Pound:

  

"Boom!"

• So will these levels now be sustained against the Euro? 
• Will rates drop back away as they have been doing over several weeks?

I'll be back in action on Monday with a full analysis and round up of the future forecasts for exchange rates. 

In the meantime, if you're looking for the best exchange rates, or would simply like to discuss the current market to help you decide when to convert your funds, then send me a free enquiry. 

The rates I can help you achieve can be up to 5% better than banks and other financial institutions, so by getting in touch you can save yourself a considerable sum. 

Click here to send me a free enquiry now. 

I look forward to hearing from you. Have a great weekend.

Alastair Archbold

Pound/Euro & Pound/Dollar exchange rate forecast

Wednesday 27th November 2013
There has been some volatility on the currency markets this week, with the Pound initially losing value causing exchange rates to drop. This trend however was reversed today after some strong UK data has given strength back to Sterling, pushing exchange rates up against other currencies. In today’s report, I’ll take a look at what’s been happening and the forecast for Pound/Euro and Pound/Dollar...

• Bank of England takes dovish tone on UK economy 
• UK GDP growth confirmed at 0.8% 
• Pound/Euro forecast 
• Pound/Dollar forecast
• Best Exchange Rates

Bank of England takes dovish tone on UK economy  

On Tuesday the Bank of England Governor Mark Carney delivered his latest Inflation report. It’s important because the BoE control interest rates, which have a big effect on the value of Sterling, and therefore exchange rates. 

The Bank has said it will not consider an interest rate rise until UK unemployment falls below 7%, a rate that many economists now believe could happen sooner rather than later. However Mr Carney poured a little cold water on this yesterday, when he said that the 7% is a "threshold, not a trigger". 

He said: "The exact timing of when that 7% threshold will be achieved is subject to uncertainty. We do our best to give our estimates of that uncertainty... One month's unemployment figures does not have a material change on those likelihoods." 

So while overall he was quite positive about the economy, these comments caused the Pound to fall to €1.19 vs. the Euro and $1.61 against the Dollar. We’ll look at each currency pair in more detail in a moment. 

UK GDP growth confirmed at 0.8% 

Before we look at the rate forecast, let’s review today’s data. This morning figures confirmed that UK growth is at 0.8%, according to figures released by the Office for National Statistics. The figure of 0.8% confirms the economy is growing at the fastest pace for three years. Read more about this on the BBC website here.

As the figure was as forecast, the immediate reaction was that the Pound fell. This was only momentary however, as clearly analysts quickly realised that while the number was as expected, it’s actually a very good number indeed! The UK is the fastest growing western economy at the moment, and so investors started to buy the Pound. 

This caused the Pound to rise, and recover its losses from earlier in the week. As I write this post, Pound/Euro is back at €1.20 and Pound/Dollar is at $1.63. So let’s take a detailed look at each currency pair. 

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Pound/Euro forecast

As you can see from the chart showing this year’s movements, the rate is looking good. 

 

It’s the best it’s been since January, and settled at around the €1.20 level. Over the last few weeks we’ve seen rates reach this level only to drop back away, for reasons I explained in a recent post. 

I expect this trend to continue for the rest of the year, and while it’s impossible to forecast, I don’t expect rates to breach this level this year. They will eventually, when the UK ecostats convince investors and the BoE that interest rates may have to rise. So if you need to buy Euros, consider taking advantage of the current level. Euro sellers may wish to consider a Stop Loss Order and hope the market retracts down. 

Want the best rates to buy or sell Euros? Click here. 

Pound/Dollar forecast

Again the chart clearly illustrates how good the Pound/Dollar rate is at the moment.

 

This is a 1 year chart, but rates haven’t been significantly above this for nearly 3 years! 

So again worth considering taking advantage of the current rates while they’re above $1.60. For Dollar sellers the direction is less clear, as we don’t know if or when the FED will start tapering their QE programme. 

Want the best rates to buy or sell Dollars? Click here.

Best exchange rates

If you are looking for the best rates for Euros, Dollars, or indeed any major world currency, then send me a free enquiry today.

I am an expert foreign exchange, integrating market knowledge with a range of foreign currency contracts. I have great pride in the excellent rates of exchange I achieve for my clients, combined with exceptional customer service. 

Because I buy currency at wholesale prices, directly from the market, it enables me to pass on significant savings, often achieving up to a 5% better exchange rate than the banks. There are also no fees or commissions. 

So if the best exchange rates is something that is of interest, click below to find out more about what I can do for you. 

Click here to send me a free enquiry.

Alastair Archbold

Pound/Euro rates and the weeks economic data

Monday 25th November 2013
It's been a quiet start to the week in the currency markets. The only data of note today was the latest UK Mortgage Approval numbers. These were slightly lower than expected, and so Sterling has fallen a little against the Euro and US Dollar.

Why haven't rates broken the €1.20 mark?

As I predicted in my last post, Pound/Euro rates have again failed to break through the €1.20 level. As has been the case of late, it flirts around that level, before dropping back away. This is because at that level, it triggers lots of orders to buy. In turn this demand to buy Euros gives the single currency strength, and ultimately causes the rate to drop back away.

Moving forwards, I expect this to continue to be the case, dependant on how UK and EU economic data fares (see below). Should we get some further unexpected good news for the UK, we could see the €1.20 level breached. If we do, I'd expect it to keep pushing above this level. There is the risk however that if this were to happen, the Bank of England could move to weaken the Pound and bring rates lower. It's not in the UK's interest for exchange rates to be too high, so this is a risk you need to consider if you need to buy Euros. 

Pound/Euro remains very close to €1.20, and Pound/Dollar is between $1.61 and $1.62 - these levels are close to an all year high, so certainly worth discussing your requirements with me if you need to achieve the best exchange rates. 

Looking for the best exchange rates?

If you are looking to achieve the best possible exchange rates, want to discuss what might happen with exchange rates, or would like to discuss the different options available to you, then take the time to send me a free enquiry.

It's free to make an enquiry, and you can then take advantage of a free consultation on what's happening with the currency you are concerned with. In doing so you can make an informed decision on when to fix your rate, and the rates I can source for you are significantly better than banks can offer.

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This weeks economic data releases.

As regular readers will be aware, economic data releases are the main cause of exchange rate movements. 

Below I list this weeks releases that I think will have an effect on exchange rates this week. To discuss how this could affect you in more detail, contact me here.

Monday – Today has been relatively quiet, with UK mortgage approvals the only data of note. The numbers were slightly worse than forecast, pulling Sterling a little lower against other currencies. 

Tuesday – Again not very busy in terms of things that could affect GBP/EUR rates. The only UK data of interest is an Inflation report at 10am. All the other data today is from the United States: Building and Housing data, Consumer Confidence numbers, and some manufacturing data, all of which could affect GBP/USD exchange rates. 

Wednesday – In my opinion today is the one most likely to cause some volatility with exchange rates, as we have an important release from Britain in the latest GDP estimate. This will show the estimate for growth, which is expected to be 0.8%. Any lower than this and the Pound may fall, and vice versa. We also have lots of US data today: Unemployment, Consumer Sentiment, and inflation data. So expect today to cause a few changes in exchange rates. 

Thursday – Today could again be important for exchange rates, as we have a report on Financial Stability from the Bank of England, and also a speech from the BoE Governor Mark Carny. In recent times when he has spoken, the Pound has gained in value so it will be interesting to see if that’s the case again. 

In Europe, we have Import Prices and Unemployment data from Germany. As Germany is the EU’s largest economy, the numbers could affect Pound/Euro rates. It’s Thanksgiving in the USA so things will be very quiet across the Pond. 

Friday – Today in the UK we will see Consumer Confidence measures along with house prices data and mortgage approvals. In the EU it’s also busy with German Retail Sales, French and Italian unemployment figures, and EU wide unemployment, so Pound/Euro rates will be the one to watch today. 

Click here to send me a free enquiry today. 

Pound/Euro rises to €1.20 on ECB rate cut hint

Wednesday 20th November 2013 
So the Bank of England news this morning was a bit of a damp squib, with all 9 members voting to hold QE and interest rates, so didn’t have much effect on exchange rates. 

However, the Pound/Euro rate has shot back up to €1.20 this afternoon, after a surprise indication that the European Central Bank may cut the deposit rate to negative. So in today’s post I’m going to explain why this has caused the rate to go up, and analyse whether it will keep rising or drop back away. 

Pound/Euro rates shoot up to €1.20 

A report from Bloomberg this afternoon hinted that the European Central Bank may reduce the deposit rate to negative. 

This effectively means that commercial lenders that deposit funds with the ECB getting less return, or even potentially have to pay to lodge funds with them. These rumours caused investors to sell the Euro, and this has caused it to weaken and become cheaper to buy. 

As you can see from the chart above, there was an immediate reaction to the news, and Pound/Euro rates climbed to €1.20, a cent higher than we started the day. What is interesting is that this is not a scheduled release, which is usually what causes exchange rates to move, as I outlined in my last post.

This shows that while it's usually scheduled data releases that move the rate, surprises like this can also have an immediate effect.

For those that need to buy Euros, this is great news as the rate is now back to the highest it has been since January. Of course the key question is whether the rate will continue to climb, or drop back away. 

Will rates keep rising or drop back away?

This is impossible to forecast of course, but in my view these gains will not be sustained. We have seen the rate hit €1.20 several times in recent weeks, however each and every time this happens, the gains are short lived, the Euro fights back and the exchange rate drops again. 

This is partly due to the fact this is a key technical level, at which many automatic orders to buy Euros are triggered. As the market is then buying Euros again, it gives it strength and the rate drops away. 

Another reason I think rates could drop back is that the Bank of England don’t want a high exchange rate – it makes exports more expensive and so should rates hold firm above this level, we may see the BoE move to weaken the Pound to bring rates back in check. 

Indeed since we hit €1.20 at about 4pm this afternoon, rates have remained there and have failed to rise further. 

Click here to send me a free enquiry on exchange rates

If you are buying Euros 

Consider taking advantage of the best rates all year. Even if you don’t need your funds for some time, you can fix today’s rates for up to 2 years, and only lodge 10% of the total you want to convert. 

This protects you against rates falling, and allows you to budget effectively. Especially useful if you need Euros to buy property abroad or to pay for goods from the Eurozone.

Get a GBP/EUR quote.

If you have Euros to move back to Pounds 

For those selling Euros, the rate has moved against you. As we may see rates drop back away, I would place a ‘Stop Loss’ order that protects you should the market keep rising, but allow you to take advantage if the rate moves back down.

This gives you a worst case scenario and again allows effective budgeting without leaving things to chance.

Get a EUR/GBP quote.

If you need great exchange rates make a free enquiry today. 

Regardless which currency you need to convert, I can help you achieve excellent exchange rates that can be significantly better than your bank or existing broker may offer. Make a free enquiry with me by following the link below, and find out more about the service and rates I can offer. 

Click here to send me a free enquiry 

Alastair Archbold

This week's economic data releases

Monday 18th November 2013
It's been a quiet start to the week, with no major economic data releases. Despite this, Sterling has fallen a little throughout trading today to around €1.1900 vs the Euro and $1.6100 vs the US Dollar, however the Pound does remain strong overall relative to where it has been of late.

So, in today's report I'm going to list all of this weeks economic data that can affect exchange rates. Regular readers will know I often give my opinion on major releases, and the effect that I think they will have on exchange rates. Knowing things like this are invaluable when deciding to fix your exchange rate.

Want to discuss your requirements with a currency expert? Click here. 

This weeks economic data releases and how they may affect exchange rates

Monday - Today has been very quiet, with only EU Trade Balance figures that were as forecast, so had no real impact on exchange rates. 

Tuesday - The most important number today is Germany's ZEW Economic Sentiment survey at 10am. This is a leading indicator of the German economy, and as Germany is the largest economic in the EU it can have a big impact. 

The forecast result is 54.6 - any higher than this would make GBP/EUR rates fall and vice versa. Elsewhere we have Speeches by FED members that could affect GBP/USD rates. 

Wednesday - The most important day for GBP/EUR rates in my opinion. Firstly at 09:30am we have the Bank of England minutes. These show how members voted 2 weeks ago when they decided to leave Quantitative Easing and Interest Rates on hold. 

It's important as it also shows the discussions and differences of view, and so give an idea which way future decisions may go. Pound/Dollar could move around today also, as we have some key Inflation data from the States in addition to Retail Sales. 

Thursday - An important day for the value of the Euro. we have inflation, consumer confidence, manufacturing and borrowing data for France, Germany and the EU as a whole. As usual, higher than expected numbers will strengthen the Euro and pull GBP?EUR rates lower. Lower than expected figures would have the opposite effect. 

Elsewhere, the UK has Public Sector Borrowing figures, and the USA has a host of Unemployment numbers and Inflation data.

Friday - A quiet end to the week, with nothing of note from the UK. We have Germany Business Climate numbers at 9am, followed by Italian Retail Sales (A good barometer of their economy as a whole).

So there we have it, all of the above will be the main events that drive exchange rates this week. 

What does this actually mean for the currency you need to buy or sell?

This of course depends on which currency you are buying or selling, and the timescales you are working to. 

• Would you like to discuss which way exchange rates are going?
• Do you need the very best exchange rates?
• Need help deciding when to fix your rate?
• Sick of poor rates and charges from your bank or existing broker?

Then make a free enquiry with me today. It's free, it doesn't put you under any obligation, and simply means you can find our more about the rates and service that I offer. 

I can source exchange rates that are commercial, and up to 5% better than banks can offer. In addition to the rates and service I provide, I have over 10 years experience in the Foreign Exchange markets, so why not take advantage of my knowledge and expertise and click below to send me a free enquiry today.

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I look forward to hearing from you.

Alastair Archbold

Pound/Euro exchange rate forecast Nov '13

Friday 15th November 2013 
Pound/Euro rates continue to be pulled in both directions, however the levels remain just under €1.20 which is around the best it’s been since January. So what has been happening since my last post that has caused the rate to fluctuate? 

Well in my last post I showed that the Unemployment and Bank of England data releases on Wednesday had caused the Pound to strengthen and pushed rates higher. To illustrate how volatile the rates are at the moment, these gains were short lived and on Thursday morning we saw the Pound fall back away due to lower than expected UK Retail Sales. 

This slump itself was short lived however, as also yesterday we saw some disappointing EU growth figures that weakened the Euro and pushed the GBP/EUR rate back up again. 

 

Eurozone growth slows, pushing GBP/EUR higher

Yesterday official figures showed that the Eurozone economy grew by just 0.1% in the July-to-September period, down from 0.3% growth in the previous quarter. The European Central Bank (ECB) last week cut its benchmark interest rate to 0.25% in an attempt to give some impetus to the fragile recovery. 

The worse than expected numbers caused the Euro to weaken, become cheaper to purchase, and therefore the Pound/Euro rate rose. 

This week has really shown how susceptible exchange rates are to economic data releases, and the immediate effect these releases can have on the price of a foreign currency.

Make a free enquiry and find out more about how I can help you.

What is likely to happen to exchange rates in the coming weeks? 

This will depend on the next round of economic numbers. On Monday I will post a full review of all of next week’s data releases, to keep you informed on what is happening and how the data could affect exchange rates.  
 Over the last week I have correctly predicted that the EU inflation numbers, Bank of England report and UK Retail Sales would be the main movers of currency rates, and that is exactly what we saw. 

Of course nobody can predict exchange rate movements or forecast which way a currency will go, however what I can do is explain the factors that will move the exchange rate you’re interested in, and also provide you with the options you can consider, so that you can make an informed choice on what to do and when to do it. 

In addition the market knowledge I have, the exchange rates I can source are commercial levels that are usually much better than you can achieve elsewhere. So if you need to buy or sell currency, and getting the best exchange rate is something that interests you, then send me a free enquiry today.

It costs nothing to make an enquiry, carries no obligation, and you may well be very surprised how much you could save. 

Click here to send me a free enquiry now. 

I look forward to hearing from you. Have a great weekend.

 Alastair Archbold

Sterling up after BoE Report and Unemployment Data

Wednesday 13th November 2013 
The Pound has had a topsy turvy week so far. Yesterday we had some inflation data that weakened the Sterling, pulling exchange rates down from the highs we saw at the end of last week. The dip was temporary however, as today we have had some better than expected Unemployment figures, along with a positive report from the Bank of England that has pushed the Pound higher. 

UK Unemployment & The Bank of England Report

Figures released this morning by the Office for National Statistics show that the number of unemployed people in the UK fell by 48,000 to 2.47 million between July and September. The unemployment rate fell to 7.6%, the lowest rate in more than three years. 

The figures will be taken as an indication that the UK economy, which grew 0.8% in the third quarter, is continuing to recover. The news gave the Pound a boost, and caused exchange rates to rise slightly. 

This was followed at 10.30am this morning by the Bank of England Quarterly inflation report. Bank of England governor Mark Carney says the UK recovery has "taken hold" and unemployment will fall sooner than it had forecast. 

The report said: "In the United Kingdom, recovery has finally taken hold. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand." 

This compounded the strength for Sterling and pushed rates higher still. As you can see from the chart below, it’s clear the immediate effect the data releases had on exchange rates, with Pound/Euro rates now settled just below €1.19. 

If you want the best exchange rates click here.

Tomorrow is another key day for GBP/EUR rates 

After lots of UK data so far this week, tomorrow it’s Europe’s turn. We have preliminary GDP figures for Germany, France and Italy showing if their economies are growing. We also have a monthly statement from the European Central Bank. Also of importance will be the UK’s Retail Sales numbers at 09.30am, as these are a good indicator of economic activity as a whole. 

Looking for excellent exchange rates? 

You may be surprised how much you could save by making an enquiry with me. The rates I source are up to 5% better than banks can offer, and coupled with the expert knowledge I have of the currency markets, I can discuss your options and help you to decide when to fix your rate. 

Whether you need to convert Pound s to Euros or any other currency, or convert a foreign currency back to Sterling, I can help you. 

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

I look forward to hearing from you.

Alastair Archbold

Why has Pound/Euro fallen to €1.19?

Monday 11th November 2013
Last week saw the Pound surge to levels above €1.20 vs the Euro, and as I mentioned in my report on Thursday, I explained that I did not expect levels to remain at these highs for very long. Indeed that has been the case with rates falling throughout trading today.

Sterling drops back away against other major currencies 

As you can see from the chart below, throughout trading today Sterling has lost value against the Euro, steadily falling throughout the morning before settling just above €1.19. 


 

In terms of economic data releases, it's been a very quiet day today. US and some EU markets are closed for veterans day, and there have been no significant data releases. So in the absence of ecostats to drive the market, what has caused the Pound/Euro rate to drop back away?

It is simply market forces that have driven the value of the Pound today. As I explained in my last post, supply and demand drives exchange rates, much like it does in any other market. With rates hitting the highs of €1.20 plus last week, this spurred many people to take advantage of the rate and buy Euros. This demand for Euros then caused it to regain some of it's strength. 

It's often the case that when a rate hits a key benchmark level like €1.20, the spike is very short lived indeed, and rates quickly drop back away again. If you look at GBP/EUR rates over the last 5 years, you can see that this has happened several times. 

So is it worth waiting for rates to get above €1.20 again?
 
Of course this is impossible to predict, but I don't believe so. The reason behind my view that I don't believe the market will have a sustained break above €1.20 is the fact it would not be in the UK's economic interest to have an exchange rate that strong. 

Consider that 50% of our exports go to the Eurozone, and so a high exchange rate would make these exports more expensive. This in turn would affect our largely export led recovery and so could affect our recovery. Manufacturing and Industrial production have been a key driver behind the recovering economy here in the UK, and the Bank of England would not want to risk that by making our goods more expensive. 

So, even if rates had stabilised above this level, I would expect the Bank of England to step in and try to devalue the Pound in order to bring the exchange rate down. In fact we have a key speech by the Bank of England governor late this week - will he follow the previous governors habit of trying to talk the Pound down, or will his speech follow his previous pattern of being very positive and boosting Sterling higher? We will find out on Wednesday.

Do you want to take advantage of the current exchange rate?

When is the best time to buy your currency?

The best time to buy your currency is, of course, at the peak. The problem is that achieving that is more luck than judgement. By its very definition, you can't identify the 'peak' until it has been and gone. So therefore the second best time to buy your currency is just after the peak - this is exactly where we are right now. 

So if you need to buy Euros you could consider locking in the rate now while it's so good. In the last few weeks, a £250k transfer to Euros would have differed by up to €10,000, clearly illustrating the decent gains we have seen of late. Even if you don't need your currency for up to 2 years, you can reserve the currency rate by lodging 10% of what you convert, with the remainder to be paid when you want your currency transferred. 

Click here to find out more about the exchange rates I offer. 

What I think will affect exchange rates this week

I can help you achieve exchange rates that are much better than banks can offer, but that's only part of the service I offer. Exceptional exchange rates is the easy part. The hard part is for you to decide when to exchange your currency. 

For example in the last 2 weeks GBP/EUR has moved over 3.5% equating to a difference of nearly €10,000.00 on a £250k transfer. 

Economic data releases are the main mover of exchange rates. Today has been very quiet, but the rest of the week does have some key economic releases that I think will have an impact on exchange rates. Let's have a look at what the rest of the week has in store:

Tuesday - Lots of UK inflation data today, that can dictate future interest rate movements, and it's all released at 09:30am. Key will be the consumer price index which is forecast to come in at 2.5%. More than this, expect the Pound to gain, and vice versa.

Wednesday - Another key day for the UK and the Pound. Firstly we have some unemployment numbers at 09:30am which is expected to be 7.7%. Again a bigger number will cause rates to rise, a lower number could cause them to fall. At 10.30am the BoE release it's inflation report, and the governor Mark Carney gives a speech; his comments may well alter the value of the Pound. Of lesser importance will be EU Industrial production figures, but the UK news will probably overshadow this.

Thursday - Quieter in the UK today with Retail Sales the only release of note. the EU releases lots of inflationary measures, and over in the USA we have Trade Balance and Unemployment figures, so I expect GBP/USD to be a little choppy today. 

Friday - A quiet end to the week with nothing from the UK, some minor EU trade balance and inflation numbers. I think markets will still be reacting to the UK economic news from earlier in the week. 

To discuss how your currency requirement may be affected by data releases, or just to have a chat about the exchange rates that I can offer, make a free no obligation enquiry today.

By taking advantage of having a brief consultation, I can discuss your requirements, explain the options available to you, talk about what is happening in the market, and in doing so help you to make an informed choice on when to fix your exchange rate. 

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

I look forward to hearing from you.


Alastair Archbold.

Pound/Euro rises above €1.20 after ECB cut interest rates

Thursday 7th November 2013
Good afternoon. A short while ago, the European Central Bank (ECB) has surprised the markets, and cut the interest rate to 0.25%. This has caused significant weakness in the Euro, pushing GBP/EUR rates above €1.20 which is now the highest we’ve seen all year.

ECB cuts interest rates – Pound/Euro rates best all year

There were rumours that the rate would be cut, but most analysts didn’t expect it to happen this month – me included! The result is that the single currency has weakened significantly, and become cheaper to purchase.

As you can see form the chart above, the moment the announcement was made, the GBP/EUR rate shot up from €1.19 to €1.2025, before settling down at the benchmark level of €1.20.

You can read more about the cut, and the comments made by the ECB president here on the BBC website. The reason the rate has risen, is that a lower rate of interest means less return for investors. These investors have therefore sold the Euro off in huge volumes, and simply supply and demand means that more of something means it’s cheaper – the Pound/Euro rate has risen as a result. 

The gains were short lived however, as is often the case. The market did not last above €1.20 for very long, and already rates have dipped just below this level.

As €1.20 is a key benchmark rate, when the markets hit this level it triggered many orders to buy, which temporarily drove it higher. The market has now stabilised just below this level, and I don't expect rates to get back above this level again in the short term.

Do you need to buy Euros?

Take note that this is around the best levels we have seen all year. If you need to buy Euros in the next 6 months, it’s worth considering fixing the rate now with a ‘Forward Contract’. This means you can fix today’s rates for up to 2 years into the future, and only lodge 10% of the total you want to convert. You retain the other 90% until you want the Euro to be transferred.

In this way, you are protected against the rate dropping back away, and allows you to take advantage of the current levels even if you don’t need your currency for some time.

Click here to make a free enquiry now. 

Pound/Dollar rates drop away.

In contrast, the news from Europe has caused Pound/Dollar rates to drop.



As you can see from the chart above, the movement is directly inverse to the GBP/EUR rate. Why is this? It’s because the investors that have been dumping the Euro, have moved to the safety of the US Dollar, which often happens when there is uncertainty in Europe. It’s then the simple supply and demand I mentioned above – as so many are now buying Dollars, it’s becoming more expensive to buy and therefore GBP/EUR rates are dropping.

Are you looking for the best exchange rates?

I hope you have found my blog useful, in keeping people abreast of what is happening with exchange rates, and the reasons for movements.

The company I work for can source exchange rates up to 5% better than the banks can offer. This combined with the expert market knowledge I have of the currency markets, could mean savings of thousands of Pounds on your currency transfer.

Click here to make a free enquiry now, and see how much you could save.

Alastair Archbold

Pound/Euro rates €1.19, close to best all year

Tuesday 5th November 2013
Good afternoon. We have seen Sterling continue to strengthen this week, and exchange rates are now very close to the best they have been all year. The main reason for the increase is the strongest services sector growth since 1997. 

In today’s report I’ll look at the reasons for the gains in detail, have a look at some other important data releases due this week, and also my view on the forecast for Sterling exchange rates for the remainder of 2013. So in today’s report:

• UK Services sector growth pushes Pound higher
• Eurozone continues to slow, weakening the Euro
• EU Commission however predicts Euro could gain strength
• Forecast for Pound/Euro rates for 2013
• This week’s economic data release that could affect rates

UK Services sector growth pushes Pound higher

This morning we saw figures that show activity in the UK services sector last month increased at its fastest rate in 16 years. The news has caused the Pound to surge in value against other currencies, breaking through the €1.19 level against the Euro, close to the highest it has been all year.

The numbers showed that the PMI services index rose to 62.5 in October from 60.3 in September, beating forecasts of 59.8.  The reading signals that the UK economy is firmly on track to recovery, and could lead to the Bank of England revising up its quarterly growth forecasts.

Alongside strong activity in manufacturing and construction, the results indicated quarterly economic growth of 1.3%, up from 0.8% between July and September this year.

The gains today follow a rise in rates we saw towards the end of last week after we saw poor economic numbers from the Eurozone. Last week the GBP/EUR mid-market rate was in the mid 1.16’s, so we’ve seen the exchange rate rise over 2% in just a few days. 

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Eurozone continues to slow, weakening the Euro

Another reason for the gains in the last few days is the Euro weakening. The single currency fell to a one-month low against sterling today, amid speculation the European Central Bank may signal easier monetary policy or even cut rates this Thursday.

After data last week showed a sharp drop in euro zone inflation, some in markets expect the ECB to cut borrowing costs on Thursday, or at least lay the ground for a move. I mentioned this in my last post, and further weak EU data could increase the chance of this happening. It is this speculation of a rate cut that is being priced in to exchange rates now, and caused GBP/EUR to go up.

EU Commission however predicts Euro could gain strength

Despite the facts of the last few days, according to the European Commission, the euro will appreciate at a record pace this year and continue to gain in value in 2014. If what they are predicting holds true, then it could mean the recent gains in GBP/EUR rates will be short lived, as a stronger Euro would be more expensive to buy and would therefore cause exchange rates to fall away.

The Commission cautioning that it sees the single currency making further gains should be noted however as it could reverse the current trend.

Forecast for Pound/Euro rates for 2013 

So what everyone wants to know is will the rate continue to go higher, or will it be short lived and come back down again? I should first point out that nobody can predict which way exchange rates will move. 

I have worked in the industry for over 10 years however, and while I can’t forecast rates into the future, I can explain what is moving the rate, and what I think may happen in the coming weeks and months. So below I will outline some possible scenarios for you to consider. The examples below are for Euros, but we do trade all major currencies so get in touch today to discuss your specific requirements. 

Click here to discuss your currency requirements in detail.

If you are buying Euros 

Rates are very close to an all year high. I personally would do one of 2 things: If I thought the rate was as good as it’s going to get, then I would fix the rate now with a Forward contract. This means you can lock in the current rate for up to 2 years, and only lodge 10% of what you want to convert now. 

You send the remaining 90% when you want your currency delivered. This strategy allows you to budget effectively, and protects against the rate moving against you.

If I thought the rate would go higher, then I would place a ‘Stop Loss’ order. This means if the rate falls below a pre-agreed level, your currency is secured. If the rate continues to rise however, then you can take advantage of any gains. This gives you a worst case scenario should the market drop.

Personally we might see rates rise another point or so at best, but any good news from Europe could quickly wipe out the gains. I would give serious consideration to fixing rates now while they’re so good. Remember; holding out for an inch could mean losing a yard.

Click here for for Pound/Euro quote

If you are selling Euros

You will have seen the rate move significantly against you and may be worried if this will continue. If I were selling Euros, I would also use a Stop Loss order. I would place this at a level a few points above where the market currently is. In this way you’re limiting your losses should the current trend continue.

If we see rates start to drop back again however, as the European Commission seem to think they will, then you can take advantage.


Get in touch to discuss your requirements in detail
 
The above are only a few examples to show the type of strategies you can employ by taking advantage of the type of contracts we offer. Everyone’s individual requirement will of course be very different, in terms of currencies, volumes and timescales.

Click here to send me a free no obligation enquiry today, and I can get in touch to discuss your currency needs in detail. In this way you can gather all the information necessary to decide what to do. When you decide to fix your rate, you will find that our rates are up to 5% better than banks can offer, so fill in the enquiry form now to find out more.

This week’s economic data release that could affect rates

As I pointed out in a recent post, economic data releases can have a huge impact on exchange rates, and that’s exactly what has been the case in the last few days as I’ve outlined above.

So what have we got this week?  

Wednesday - we have manufacturing numbers from the UK in addition to a GDP estimate. Both will be a crucial indicator of growth so expect it to affect the Pound. We also have a host of data from the EU, that if poor could weaken the Euro further.

Thursday – Interest rate decision from the UK and EU today. No change expected for the UK, but an outside chance of a rate cut from the ECB. Also watch for the press conference after the decision – if they don’t cut rates, they may hint they will soon, which would have the same effect. Elsewhere we have unemployment numbers from the USA.

Friday – we end the week with Trade Balance figures from the UK, France and Germany. Over in the USA we have the latest non-farm payroll numbers. These are usually very different than forecast, so expect a choppy day for GBP/USD rates. 

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I look forward to hearing from you.

Alastair Archbold

Pound/Euro rates jump to 2 week high of €1.18

Friday 1st November 2013 
Good morning.  It’s only been 2 days since my last post, but things can move very quickly in the currency markets. For most of this week exchange rates have been very stable, however yesterday was saw some significant negative data from the Eurozone that has weakened the Euro and pushed Pound/Euro rates back up. This is what we will look at in today’s report.

Why have Pound/Euro rates jumped to a 2 week high?

This week we’ve moved from a 2 month low to a 2 week high, due to poor data from the Eurozone. So what has caused the surge in rates? The single currency's weakness was caused by a number of factors, and we have seen the single currency fall pushing Pound/Euro rates to their highest in 2 weeks.

Data on Thursday showed euro zone inflation fell to the lowest in 4 years, which increases the chance of an interest rate cut in the EU.  We also saw German retail sales fall by half a percent, against a forecast of gains of half a percent. EU unemployment was also worse than expected, and all of this combined weakened the Euro significantly.

“In light of those inflation numbers, we have changed our call and are now expecting the ECB to cut its main refinance rate at next week's meeting," said Geoffrey Yu, currency strategist at UBS.

ECB about to cut interest rates?

Next Thursday both the Bank of England (BoE) and European Central Bank (ECB) announce their decision on interest rates. I expect the BoE to leave things on hold, but in light of the poor inflation numbers from the EU, there’s now a good chance the ECB could cut the rate.

This is the reason the Pound/Euro rate has risen. An interest rate cut would mean less return for savers and investors in the EU, and so these investors have been selling Euros in anticipation of the cut. This means the cut has now started to be priced into exchange rates, and Pound/Euro has climbed by over 1% as a result.

What does this mean if you are converting Euros to Pounds?

Those that took note in my last post of my suggestion to take advantage of the 2 month EUR/GBP high will be pleased, as it was short lived. Moving forwards, if the ECB do indeed cut rates, we could see the market continue to get worse for you. Some forecasts suggest rates will climb to €1.20 by the end of the year.

Looking for the best Euro to Pound rates? Click here.

What does the latest news mean for those converting Pounds to Euros?
 
It’s good news as we have seen rates rise significantly. We’re now 2 cents below the best it’s been all year. A rate cut in the EU could push things higher, however for the most part this may now be priced in. Next week’s GDP estimate for the UK will also have an impact, as it will indicate whether the UK economy is still growing.

So good GDP and a rate cut could push things higher, but as we’ve seen this week trends can change very quickly. If I needed to buy Euros, I would place a ‘Stop Loss’ order, so if rates drop below a certain level my currency is purchased. In this way, you can still take advantage of further gains should the rate rise further, however have a worst case scenario should rates start to drop again. Stop Loss orders are very useful when markets are moving in a positive direction for you.

• Need to buy Euros at the best rate? 
• Want to find out more about Stop Loss orders?   

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Pound/Dollar rates fall

In contrast to the euro zone, U.S. data was far more encouraging this week. A strong Chicago activity survey strengthened the US Dollar, and the good data means there still may be the case for the Federal Reserve scaling back its QE stimulus programme.

This has boosted the US Dollar, making it more expensive to purchase, and as a result Pound/Dollar rates have dipped back below $1.60 again.

Look for the best Pound/Dollar exchange rates? Click here.

Have a free consultation to help you get the best exchange rates
 
Regardless whether you are buying or selling a foreign currency, market movements such as we have seen this week can have a huge impact on the cost of your currency.

I can offer you a free consultation on your currency requirement, and explain the current trends and forecasts for which way rates will go. This, combined with the excellent rates of exchange I can offer can save you a significant sum on your conversion.

Therefore if you need to get the best exchange rates, why not take advantage of a free consultation with me. Click below to send me a free no obligation enquiry today, and I can get in touch to explain the options available to you. Our rates are up to 5% better than banks can offer, so find out today how much you could save.

Click here to send a free enquiry today.