Monday 29th December 2014 Good morning and welcome back to the currency markets after the Christmas break. Given the market holidays there has not been much movement in exchange rates, so today’s report is a reminder how you can take advantage of the commercial exchange rates that we can offer. Pound/Euro rate near a 6 year high
2014 has been a good year for the Pound/Euro exchange rate, and we are currently enjoying exchange rates within a few percent of the best they have been in 6 years. In real terms this means a €250,000.00 property overseas now costs a staggering £20,000.00 less than last summer, purely due to exchange rate movements. The Strong Pound is really driving the overseas property market and there has rarely been a better time in recent years to purchase a property abroad. Despite the good Pound/Euro exchange rate however, it has failed to go any higher in recent months. In light of this, it’s an opportune moment to look at the tools and contract types a specialist currency broker can provide, to help save you money when buying overseas. If you need the best exchange rates, click here to get a quote a find out more about the services we can offer. The tools available to help you take advantage of the best exchange rates
Using a currency broker as opposed to your bank can save you thousands of Pounds simply by achieving better exchange rates. This is only part of the story however, as a specialist broker has various tools available that can help you take advantage of the current rates even if you don’t need your currency for some time. There are also ways to protect you against adverse exchange rate movements. Spot Contract - The Spot Contract is the most basic and commonly used foreign exchange product. It is an agreement to buy or sell one currency in exchange for another. You have 2 days to settle the contract, at a price based on the prevailing "spot exchange rate" (the current value of one currency compared to another.) Although a Spot contract lets you buy or sell currency as you need it, exchange rate movements are highly unpredictable, even during a single trading day. Upon receipt of cleared funds currency is available for onward transmission. This type of contract is typically used for paying an initial deposit for a property, or to top up your account overseas to pay bills. Forward Contract - A Forward Contract lets you buy or sell one currency against another, for settlement up to 2 years into the future. Unlike spot contracts, a forward contract eliminates the risk of fluctuating exchange rates by locking in a price today for a transaction that will take place in the future. Most importantly it protects you from unfavourable movements in the market, however, be aware that it will not allow for gains to be made should the exchange rate move in your favour during the period between entering the contract and final settlement for the currency. This type of contract is very popular when buying overseas, as usually there is a time period of a few months between paying your deposit and completing your final balance. It allows you to budget as you will know the total GBP cost of your purchase, and protects you against rates falling. For example, you could fix an exchange rate today for £200,000.00 to Euros, and only lodge 10% of the total funds to be converted (£20,000.00) while the majority of your funds remain earning you interest. You wouldn’t buy a property in the UK without knowing the final price, and the same should hold true when buying overseas. Stop Loss Order - A Stop Loss order protects you against adverse exchange rate movements and secures your currency if it falls below a pre-agreed level. This gives you a safety net and ‘worst case scenario’ and doesn’t leave you exposed to a falling market. This is useful when the exchange rate is rising. For example, the current trading level is 1.25. You place a ‘Stop Loss’ to convert your funds should the rate drop below 1.22. In this way you to take advantage of any gains, without leaving yourself open to unnecessary loss should the market move against you, and you know the absolute minimum you will have to spend. Limit Order - A Limit order, which is placed at the top end of the market to secure currency at a specific price that may not be currently available. This type of contract is particularly useful when the markets are moving in a positive direction for you. This type of contract can be using if you are targeting a specific rate, and can be used in conjunction with a Stop Loss order. This week’s Market Data
Monday 29th December – The only data today is Retail Sales from Germany, which are a good overall barometer of the economic health of the EU’s largest economy, so could affect GBP/EUR rates. Tuesday 30th December - Very queit, with the only release US Consumer Confidence. Wednesday 31st December – Again all US based today, with Jobless Claims, Home Sales, and Inflation numbers. Thursday 1st January 2015 – Markets Closed. Friday 2nd January 2015 – The first round of economic figures for 2015 include UK Mortgage Approvals and Manufacturing PMI. The EU & US also releases Manufacturing PMI, and we also see construction data from the States.
Thursday 18th December 2014 The Pound has had a good day today, particularly against the Euro. This morning we saw figures that showed UK retail sales rose at their fastest annual rate in more than 10 years last month. We were expected the number to show +4.5%, and it actually came in at 6.9%. This is partly due to the effects of Black Friday. Retail Sales are a good overall barometer of economic health, and so strengthens a currency when the numbers are better than expected. This caused Pound/Euro to rise from €1.26 yesterday, to €1.2752 at the time of writing. The other reason for the strong performance for GBP/EUR today is seasonal end of year demand for Sterling, and further speculation that the European Central Bank will have to conduct easing measures to prop up the EU economy. It should be noted that this trend has repeated itself several times in recent months, with the Pound/Euro rate getting to these sort of levels, before dropping back to the €1.26 mark again. For this reason, those that need to buy Euros in the next 3 months should consider fixing the current rate with a Forward contract. This works by lodging 10% of what you want to convert, and you can lock in the current rates for up to 2 years. This protects against the rate dropping, and allows you to budget effectively for what you need to buy with your currency, be it a property abroad, a car import, or goods and services from the Eurozone. Getting the best exchange rates
If you have a currency transaction to perform, would like to discuss which way the market is moving, or get a quote to compare with your bank or existing currency broker, click here to send me a free no obligation enquiry.
Tuesday 16th December 2014 It’s been a pretty choppy day in the currency markets, with news from Central Banks and oil prices causing quite a bit of exchange rate volatility. Today I’ll look at what has been happening with some of the main currency pairs. If you need to buy or sell any major international currency, I can source exchange rates up to 4% better than banks can offer. Contact me today to find out how I can help. Sterling/Euro
Pound/Euro rates seem to have been sliding lower over the last few months, and currently stuck between €1.25 and €1.26 which is several cents below the 6 year high of €1.29 we saw in the summer. It’s about the Bank of England and interest rates. In the summer analysts expected a rate hike before the end of the year, and this had caused the Pound to rise in value. It now looks like a rate hike is now some way off, and this has caused the Pound to drop off. Today we saw inflation fall even lower, down to a 12 year low caused by lower fuel prices. This could also slow the UK's economy which may cause Sterling to fall further in the short term. The Bank of England, which targets an inflation rate of 2%, warned last month that the rate could drop below 1% in the next six months, and this poor outlook means that the Bank is unlikely to raise interest rates from the historic low of 0.5% for some time. If you need to buy or sell Euros, click here to get a free quote or discuss the GBPEUR forecast. Sterling/US Dollar & Canadian Dollar
In the last 6 months GBP/USD has dropped from $1.72 down to around $1.56/$1.57. Part of this is due to the weakening of the Pound, but also the US Dollar has been gaining strength recently as their economy continues to impress. It’s likely the US central bank will raise interest rates before the UK, and that’s likely to keep the rate in check. Another reason is the low oil prices. The US imports lots of oil so when the price drops, the USD generally gets stronger and more expensive to buy. The opposite is true of the Canadian Dollar – GBPCAD rates have gone up by 4% in the last month, as the Canadian Dollar has weakened due to the low oil prices. They export lots of oil so their currency has weakened. If you need to buy or sell USD or CAD, click here for a quote or simply to have a chat about what’s moving the exchange rate. Sterling/Australian Dollar
We are currently seeing very good rates to buy the AUD. The current rate is the highest it’s been all year. This is down to a very weak Aussie Dollar. Australia’s main export is Iron ore, which is at a very low price. China buys most of it, and their factory and manufacturing sectors are slowing, meaning less demand for these raw materials. This has caused the AUD to weaken and become cheaper to buy. Due to the slowdown in the Australian economy, they may have to cut interest rates next year and that is also pushing the GBP/AUD rate higher. If you need to buy Australian Dollars, click here for a quote or simply to have a chat about what’s moving the exchange rate.
Russian Rouble
We don’t trade the Russian Rouble, but it’s certainly worth a mention. The Rouble has lost about half of its value this year, and today alone has fallen another 10%. Russia’s central bank last month raised interest rates by 1% to 10.5%. Last night, they hiked the rate to 17% in an effort to stave off the fall in value of the currency. While we don’t trade this currency, I’m mentioning it as it demonstrates how central banks try to use interest rates to alter the value of a currency. On this occasion it hasn’t worked, and fears of fresh sanctions could drag the rouble lower, although it’s mainly due to oil prices. 50% of their GDP comes from oil, so the 5 year low in prices is reflected in their currency. Getting the best exchange rates
If you have a currency transaction to perform, would like to discuss which way the market is moving, or get a quote to compare with your bank or existing currency broker, click here to send me a free no obligation enquiry.
Tuesday 9th December 2014 Yesterday's gains for the Pound and Sterling/Euro in particular were again short lived, with the GBP/EUR exchange rate today dropping back towards €1.26: UK Industrial and Manufacturing production disappoints
The reason for the drop today is due to worse than expected UK Industrial and Manufacturing. As the figures were lower than expected it weakened the Pound pulling exchange rates lower. This is because expectations of when interest rates may start rising will most likely be pushed back in the light of the poor figures. The Bank of England has signalled it will keep interest rates low well into 2015 as earnings struggle to grow more than inflation. The UK GDP estimate released at 3pm today was as expected, so didn’t have any effect on exchange rates. Pound/Dollar up
This afternoon, we saw some Euro strength which pushed GBP/EUR lower, and caused flows out of the US Dollar. This caused the GBP/USD rate to recover to the $1.57 levels. Getting the best exchange rates
If you have a currency transaction to perform, would like to discuss which way the market is moving, or get a quote to compare with your bank or existing currency broker, click here to send me a free no obligation enquiry.
Monday 8th December The Pound has had a good start to the week, rising by nearly a cent against the Euro to 1.2720 and also up against the US Dollar, from 1.5550 this morning to 1.5630 this afternoon: What has cause the Pound to gain against EUR & USD?
There hasn’t been any significant data today, so I’ve put the rise down to comments from the Bank of England, that say the UK economy can cope with higher interest rates. They’ve stated that the majority of people with mortgages could cope with a rise in interest rates, if levels rose to 2.5% from their current 0.5% historic low. The comments mean there is more chance of a rate hike in the first half of 2015 and the Pound strengthened accordingly. (A currency strengthens on the rumour of higher interest rates, as it attracts investment into the Pound due the potential higher return on offer). It’s worth noting however that the Pound/Euro cross seems to be range-bound between 1.25 and 1.28 at the moment, so I don’t think we’ll see rates continue to climb. If you need to buy or sell Euros, get in touch for a free quote and a brief chat on the options you can consider to help you get the best rate. Click here to send me a free no obligation enquiry today. What else could affect exchange rates this week?
Tuesday 9th December – The most important releases today are from the UK, including Industrial and Manufacturing production, along with a NIESR GDP estimate, forecast at 1.8%, 3.2% and 0.7% respectively. If the actual numbers are higher or lower, the Pound could rise or fall accordingly. Wednedsay 10th December – Another important day for Sterling as we have the latest trade balance figures. These show the difference between what we import and export so can often affect exchange rates. Elsewhere GBP/NZD could change as we have an interest rate decision from New Zealand and a press conference afterwards. Thursday 11th December – Nothing of note from the UK today, but GBP/EUR could be affected by inflation numbers from Europe, and a monthly report from the ECB. We also have Australian Employment figures that could alter GBP/AUD rates, and in the USA we have raft of jobless numbers and the latest retail sales. Friday 12th December – Nothing from the UK today, and from the EU we have Employment numbers and Industrial production figures. We end the week with US Inflation figures, and a consumer sentiment survey. Do you have an upcoming currency transaction?
If you need to convert currency then get in touch to find out more about the exchange rates I can offer. I regret we do not deal with cash or holiday money, only bank to bank transfers for amounts £5k+. You may have bought or sold a property abroad, or perhaps your business buys and sells goods from the Eurozone. Whatever your currency needs, you could save thousands by achieving a better exchange rate. Click here to find out more about the rates and currency services I can offer you.
Thursday 4th December 2014It's been a busy week, but all in all we're back to where we started with GBP/EUR rates, now sitting around the €1.26 level again. Let's take a look at what's been happening. Autumn Statement causes Sterling to rise
Wednesday was a good day for the Pound, starting with better than expected services PMI that gave the Pound a boost. This was compounded by the budget statement, which the markets took very positively for the Pound and GBP/EUR rose by over 1% on the day, getting to 1.2766 at the peak. However as is often the case, spikes to the upside can be very short lived and this proved to be the case again during trading today, when the ECB's draghi made comments that pulled the rate back towards the €1.26 level. What caused the GBP/EUR rate to fall?
It was largely comments by the European Central Bank (ECB) president Mario Draghi. As always for the 1st Thursday in the month, the UK and EU central banks announced their decision on interest rates, with both opting to keep rates on hold at record lows. This was expected, and soon afterwards the ECB president gave a press conference. 
You can read his full comments here. He basically hinted that QE is coming for the Eurozone, but the market was expecting a little more clarity. So if it sounds as though they are edging towards quantitative easing, why didn’t the Euro weaken and cause GBP/EUR to go up further? Firstly it's worth remembering that the ECB has already started something that has a lot in common with QE. It is buying financial assets based on private sector loans with newly created money. The difference between this and the US and UK QE programmes is that firstly it’s much, much smaller. Secondly the assets being purchased don’t actually include government debt. The markets were actually expecting him to be a little clearer on exactly when and how their QE programme would be expanded. What he actually said is that there had been "a very rich, ample discussion" on what unconventional instruments the bank had available to it within its mandate, adding that “We discussed broadly all sorts of measures, we... discussed various options of QE. And more work is needed and... we'll keep you informed." In the absence of any clear indication of further stimulus that had been expected, the recent weakening of the Euro had been reversed, and it is this that caused the single currency to strengthen and pull rates back towards the €1.26 level where it has felt comfortable at in recent weeks. Tomorrow's data
GBP/EUR – we have Inflation Expectation measures for the UK, which could affect the consensus of when interest rates will rise, and so could affect the Pound. Over in Europe we have the latest GDP measures which if better than the expected 0.2% could cause GBP/EUR to fall. GBP/USD – there are lots of released from the USA later this afternoon including factory orders, Jobless Claims, and NonFarm Payrolls. The consensus is for 232,000 jobs to have been created in the USA last month, however as the prediction is usually quite far off the actual number, anything higher than this would cause GBP/USD to fall, and vice versa. If you need the best exchange rates, contact me by clicking here for a free consultation on the currency markets and to discuss the tools available to help you achieve the best possible exchange rates. Have a great weekend.
Tuesday 2nd December 2014There are 4 things that generally affect exchange rates like Sterling/Euro, Sterling/Dollar etc. These are: Economic figures such as unemployment numbers, interest rates, Retail sales etc. Then we have natural disasters such as floods, famine and droughts that can affect the economic output of a country and in turn the value of its currency. Thirdly acts of war have an effect as it can drive investment in or out of a country. Lastly there are political events that can affect an economy. A good example of this would be this years Scottish referendum, that caused large fluctuations in the exchange rate. Political instability is the theme of today's post... UK Autumn Budget Statement
At 12.30pm tomorrow afternoon (Wed 3rd December 2014) the chancellor George Osborne will deliver his Autumn budget statement, and this has the potential to affect the currency markets and the value of the Pound. In turn, we could see volatility in exchange rates should there be any surprises. I expect him to outline the various ways in which his economic plan has been working. The rapid growth rate is certain to feature, and he will be keen to highlight the UK's performance over the past 18 months compared with our neighbours in the Eurozone. He is also likely to talk about borrowing, taxes, spending and growth. In years gone by the statement has had little to real effect on the currency markets. This is because for the most part it is simply political theatre, more so tomorrow with a general election just around the corner. This year however could be different... Could the Pound fall following the statement?
Regular readers will know that the Pound rose well through most of 2014, gaining strength on the expectation that interest rates would rise. (Higher interest rates strengthen a currency due to the higher return on offer for investors). In recent months however the Pound has fallen back slightly, due to inflation numbers dictating interest rates will likely remain at record lows well into 2015. Another thing that has kept the Pound in check recently is the threat of deflation in the Eurozone. The EU is our largest trading partner, and any slowdown there would also dent the UK economy. Indeed, it’s not in the UK’s interest for the Pound to get too strong, as our exports become more expensive for EU buyers. If Mr. Osborne gives any surprise revisions to UK growth in tomorrow’s statement it could well weaken the Pound and cause exchange rates to fall. He could also use the opportunity to purposefully devalue the Pound, by highlighting the risks of an EU slowdown affecting the UK economy. We could of course see no effect of the statement at all, however there is more potential than normal for his word to affect the Pound. What else could move rates this week?
After tomorrow, all eyes will turn to Thursday when the UK and EU central banks are both expected to keep interest rates on hold, however statements accompanying the decisions could hint at further stimulus, so I expect a choppy day for Pound/Euro. Mario Draghi, the ECB president could hint at easing which could weaken the Euro. Mark Carney, the UK governor, has been very inconsistent in his views on interest rates, so there is some potential for Thursday to shake up exchange rates. Are you looking for the best exchange rates?
Click here to send me a free no obligation enquiry to see what rates I can offer for your currency transaction. Even if you already use a currency broker, comparing rates can often save you a significant sum when converting large amounts. In addition to excellent rates of exchange, I offer free consultations to anyone that needs to convert currency, to explain the options and contract types available and explain what is moving exchange rates. Click here to send me an enquiry now.
Monday 1st December 2014 
Good afternoon and welcome to a new month. The currency markets have been relatively stable over the last week, with GBP/EUR remaining around the €1.26 mark, and GBP/USD in the $1.57’s. In today’s post I will list the economic data releases for the coming week that I think could affect exchange rates. This week’s economic data releases
Tuesday 2nd December – Today is quite light for UK data, with Construction PMI the only release of note. We’re expecting the number to be 61.2 so anything above this could give the Pound some strength. In Europe, Spanish employment numbers are released. Australia has its latest building numbers, along with an Interest Rate statement from the RBA. Over in the United States there are 2 speeches by FED members, and also the chair Janet Yellen, so GBP/USD could be affected. Wednesday 3rd December – This could be an important one for Sterling, as we have Services PMI and the Autumn forecast Statement. GBP/EUR could also be affected by today’s EU Retail Sales figures and some EU inflation numbers. Most data is from the states today though; Manufacturing, Employment and speeches by FED members. Thursday 4th December – We have the latest interest rate decisions from the UK and EU today. While I expect no movement in the actual rate, speeches by the Banks governors afterwards could well affect Sterling/Euro exchange rates. We also have further US employment numbers this afternoon Friday 5th December – We end the week with a host of US data including Trade Balance numbers and Non-Farm Payrolls. These 2 releases often cause volatility in the exchange rate for GBP/USD. Do you have an upcoming currency transaction?
If you need to convert currency then get in touch to find out more about the exchange rates I can offer. I regret we do not deal with cash or holiday money, only bank to bank transfers for amounts £5k+. You may have bought or sold a property abroad, or perhaps your business buys and sells goods from the Eurozone. Whatever your currency needs, you could save thousands by achieving a better exchange rate. Click here to find out more about the rates and currency services I can offer you.
Friday 21st November 2014 The Euro has weakened again today, pushing the Pound/Euro rate up from €1.25 to €1.26, marking the end of a topsy-turvy week in which was saw GBP/EUR climb 2 cents, recovering half of last week’s losses. In today's post, I'll explain the jump in the rate, and also have a look at a forecast that Pound/Euro will hit €1.54. Or €1.12, depending who you believe. Let's start with today's movements :Why has the Pound/Euro rate gone up?
It’s nothing to do with Sterling, and all to do with the Euro. This morning the ECB president gave a speech and his comments caused the Euro to weaken and become cheaper to buy. So what exactly did he say? 
“We will do what we must to raise inflation and inflation expectations as fast as possible, as our price-stability mandate requires,” adding that some inflation expectations “have been declining to levels that I would deem excessively low,”. With the next ECB policy meeting only a few weeks from now, and the EU economy facing a period of stagnation, he may make further comments that show the markets that he is committed to reigniting growth and inflation. This is a clear signal that the ECB may embark on unconventional methods such as Quantitative Easing to help the economy. This caused the Euro to weaken and that’s the reason for today’s upward swing.Will the Pound go up or down against the Euro ?
So what next for Pound/Euro rates? In the last few weeks we’ve seen the currency pair trading in a range from €1.24 to €1.28, and currently we’re slap bang in the middle of that range. I personally can’t see it going too much higher, but just to illustrate that nobody can predict the way exchange rates can move, consider these two differing forecasts...
The Pound is to climb relentlessly against the euro over the next three years and will reach levels last seen at the turn of the century, according to new forecasts by Goldman Sachs. They are predicting that rates will reach €1.54 within a few years. I find that hard to believe! In the 10 years I have been working as a Currency Broker, I have seen highs of €1.55 and lows of €1.01, but the current level of a little under €1.30 is a more realistic value in my opinion. Moreover, such a dramatic rise in sterling cannot easily be justified by the underlying weakness of the British economy, which already has the worst current account deficit in the developed world. It was running at 5.2pc of GDP in the second quarter. The IMF have a totally different view, stating that they think the Pound is up to 10% overvalued, which could mean a correction in the GBP/EUR rate down to €1.12. Again I think such a drop is highly unlikely. So Pound/Euro could rise to €1.54. Or fall to €1.12. Clear as mud.
What the two differing forecasts show is the total uncertainty over which way the rate will move into next year. So whether you are buying Euros, or have Euros to convert back to Pounds, it’s understandably very difficult to know when to fix a rate, given nobody really has any clear idea about the direction the currency pair will take. That’s where I can help you. While predicting the market is impossible, having a good currency broker with a sound knowledge of the markets can save you thousands of Pounds. Part of this is arming yourself with the knowledge to make an informed choice on when to fix a rate. The other part is using tools to your advantage, such as Forward contracts, Stop Loss and Limit Orders to make sure you don't lose out unnecessarily. In this way you can employ a sound strategy with regards to when to convert your funds, and take some control over what is a very unpredictable currency market. The worst thing you can do is just sit back and hope the exchange rate moves in your favour. Hope is not a reliable economic tool. If you need to convert currency, perhaps for buying or selling property abroad or for business purposes, then get in touch with me today for a free consultation on how I can help you. A can discuss your requirement, discuss the currency pair you are converting, and explain the different options you can consider to help you make the most of your currency. When you decide to fix a rate, I can source you an exchange rate up to 5% better than banks and other brokers. Click here to send me a free no obligation enquiry today.
Wednesday 19th November 2014 Sterling/Euro recovers to €1.25
Just a quick update this morning, as we have finally seen the Pound recover slightly after the last week in which we saw rates drop from €1.28 to €1.24. Earlier this morning the Bank of England released the minutes to its recent meeting where they decided to leave rates on hold. Of the 9 member committee, 7 voted to hold rates, with 2 voting to raise them, which has been the case for the last few months. You can read the full minutes here on the BoE website. Why did this cause the Pound to rise?
Given inflation numbers have been lower recently, some analysts including me thought that the 2 members that had been voting for a hike would not do so. The market had also been expecting this and it starting getting priced into rates in advance, and before the release of the minutes GBP/EUR rates were as low as €1.2440. As you can see from the chart above, as soon as the result was out Sterling exchange rates jumped to €1.25 where it now stands. This is a key technical level so I expect rates to remain at around €1.25 in the short term. Sterling/Dollar
Focus will now be on Pound/Dollar rates. Currently this sits at around $1.57, but there is some key data out in the next few days that could change this. This evening at 7pm we have the US Federal Reserve minutes, and if there are hints at an interest hike in the states we could see the exchange rate drop further. Tomorrow we have a host of inflation data and jobless claims from the states and quite simply, good economic news could strengthen the US Dollar and cause the exchange rate to drop. Do you have an upcoming currency transaction?
If you need to convert currency then get in touch to find out more about the exchange rates I can offer. I regret we do not deal with cash or holiday money, only bank to bank transfers for amounts £5k+. You may have bought or sold a property abroad, or perhaps your business buys and sells goods from the Eurozone. Whatever your currency needs, you could save thousands by achieving a better exchange rate. Click here to find out more about the rates and currency services I can offer you.
Tuesday 18th November 2014 The Pound has continued to fall against the Euro, and today has dipped into the €1.24’s. A week ago rates were €1.28+ so this is a big drop in a short period of time. The rate started to drop when the UK inflation numbers came in very low, which I touched on in a post last week. This means that the Bank of England are likely to keep rates on hold for quite a while. The reason for today’s drop was twofold. Firstly we had further UK inflation numbers that were slightly lower than expected, compounding the view the economy isn’t ready for a rate hike, and the Pound dropped a little. Soon after, we had some sentiment data from Germany, Europe’s largest economy. This showed that sentiment rose in November for the first time in almost a year, surpassing expectations and raising hopes of an improvement in their economy after it dodged recession in the third quarter. This data gave some strength to the single currency, and made it more expensive to purchase. What will happen with Sterling/Euro next?
It is very hard to call. On the one hand you can look at the trend over the last 3 months. If you look at the chart above, you can see that rates have dropped to these levels quite a few times, only to then bounce back up. This could well happen again, especially as the EU may well pursue a Quantitative Easing programme which could weaken the Euro. However this is not a given; past performance is not necessarily an indicator of future performance. Tomorrow we have the minutes from the recent Bank of England interest rate decision. Last time 7 of the 9 members voted to hold rates, and 2 voted to raise them. In the light of the recent inflation numbers, if less than 2 voted to raise rates this time, expect the Pound to fall further. When should you buy or sell Euros?
Given there is no way to predict the market, the best course of action is to use tools to make sure you don’t get a lower rate than necessary. In this climate if I had Euros to buy or indeed convert back to Pounds, I would use a ‘Stop Loss’ order. This allows you to instruct me to convert your sums if the exchange rate drops below a pre-agreed level. If the rate gets better for you, great you can take advantage of a swing in your favour without leaving yourself at risk of a further drop in rates. This is just one example of the tools I offer to help you get the most out of your currency, in addition to very sharp exchange rates that are close to the mid-market level. If you have an upcoming currency requirement, why not get in touch with me by completing an enquiry form here. I can discuss your particular needs, run over your options, provide you a quote and see if we can save you money over your bank or existing broker. It’s free to make an enquiry and does not obligate you in any way.
The exchange rates I achieve for my clients can be as much as 5% better than banks offer, and when converting large sums the savings often run into thousands of pounds. Click here to send a free enquiry today.
Friday 14th November The sterling sell off continues this week, as expectations of an interest rate hike in the UK are pushed back. The chart below shows how the rate has moved over the last few days:There hasn’t been any further data to cause the drop, and the fall is purely investors continuing to dump the Pound due to the fact interest rates are not going up any time soon, as I outlined in my last post on Wednesday. The drop has been quite significant. Purchasing €250,000.00 today compared to Friday morning would cost you £4,400.00 more, purely due to exchange rate movements over 2 days. This demonstrates how quickly things can change, and how important it is to get your timing right with regards to when to fix your exchange rate. Getting the best exchange rates
If you need to buy or sell any international currency on a bank to bank transfer basis, then get in touch with today by clicking here. I can discuss what is happening with exchange rates, the forecasts where experts expect the rate to go in the coming weeks and months, and provide you a quote to compare with your bank or existing broker. It’s free to make an enquiry, and you could save thousands of Pounds by achieve a better exchange rate. Click here to make a free enquiry today.
Wednesday 12th November 2014 Good morning. Earlier this week I warned that today would be key for Pound/Euro rates, and that if the Bank of England inflation report forecasted low inflation, then Sterling could drop off. This is exactly what has happened, and despite an initial rise in rates following good UK employment figures, we soon was the rate drop by over 1 cent as you can see from the chart below: UK Employment gives the Pound a (temporary!) boost
The day actually started well for the Pound, as figures showed that UK unemployment fell for the 18th consecutive month, beating expectations. The numbers also showed that one measure of average earnings growth beat inflation for the first time in five years. As the numbers were better than the markets were expecting, the Pound rose to above €1.28, getting near 6 year highs as you can see from the graph above. But the gains were short lived, as we will see in a moment…. Bank of England inflation report brings Sterling crashing back down.
Within an hour of the spike to €1.28, GBP/EUR figure plummeted by cent to €1.27. The reason for this was inflation expectations. 
At 10:30am the Bank of England gave its inflation report. Inflation is key to when interest rates in the UK will rise. Higher inflation lends itself to higher interest rates, and the expectation of this has been driving the Pound up this year. However today the BoE governor Mark Carney stated that inflation could fall below 1% in the next six months, due to sluggish growth in the European economy, and other downward pressures. Governor Mark Carney also said he did not expect inflation to reach the targeted rate of 2% for three years. The Bank also cut its prediction for UK economic growth in 2015 to 2.9%.All of this means that an interest rate hike in the UK is a long way off, and the Pound weakened accordingly. Is a weak Pound what the BoE wants?
In recent posts I have suggested that the strong Pound is not favoured by the Bank of England. It affects our exports and could harm our recover. For this reason I have warned recently that the BoE could take the opportunity to weaken the Pound if they can, and today that’s exactly what we’ve seen. Just a few comments from the BoE governor and the Pound has fallen again, repeating it’s trend of climbing to around €1.28 before dropping back down. Getting the best exchange rates
As you can see from my market report today, there are lots of risks to Sterling, and many different things that are pulling the rate up and down. Getting the best rates is partly getting your timing right, and also having a good currency broker to inform you what is happening in the market, and to help source you a better rate of exchange than the banks. This is how I can help you with your currency exchange, so if you need to convert once currency to another, then get in touch with me for a chat about how I can assist you and the rates I can achieve. Even if you already have a broker, it can do no harm to compare our rates as even a small difference in your exchange rate can represent a saving of thousands of Pounds when converting a large sum. Click here to send me a free no obligation enquiry today.
Monday 10th November 2014 Good afternoon. It’s been a very quiet start to the week with no economic data releases of note. The Pound/Euro rate remains in the mid €1.27’s, and Pound/Dollar rates have dipped into the $1.58’s. 
As usual for a Monday, below I’ve listed the weeks data releases that I think will affect exchange rates. It’s a very quiet week all in all, with the most interesting release being on Wednesday when we see the latest UK unemployment numbers, along with the Bank of England (BoE) inflation report. This is important as inflation forecasts will have an effect on when the UK may raise interest rates. If inflation is forecast to remain low, expect the Pound to weaken. If inflation looks like it is on the rise again, the Pound could well strengthen. I personally think GBP/EUR will remain in its recent range of 1.26 to 1.28 in the coming weeks. Those buying Euros should consider locking a rate in now while it’s close to the best in 6 years. I can’t see anything on the horizon that will push the rate higher. If you need to perform a currency transaction, converting Euros to Pound, Sterling to Euros, or indeed need to get the best exchange rates when converting any international currency, then why not get in touch to see what rate I can offer. I can source rates up to 5% better than banks of other financial institutions can offer, and this can represent a significant saving if you need to convert a large sum. Click here to make a free, no obligation enquiry. This week’s economic data releases that could affect exchange rates.
Tuesday – Another very quiet day, with the only data of note a speech by the Reserve Bank of New Zealand governor, along with a report from them about financial stability, so we could see some volatility in GBP/NZD rates. Wednesday – I think today will be the most important of the week for the Pound. We have the latest Unemployment numbers, alond with the Bank of England inflation report. This is important as the jobs numbers are a reflection of the economy, and the inflation report could give some insight into the future movements for UK interest rates. Thursday – Nothing of note from the UK, but the European Central Bank issues its monthly report, so GBP/EUR could be affected. Over in the USA we have Jobless claims numbers, and from Canada we have a BoC review. Friday – Yet again nothing of interest from the UK. The EU releases it’s latest inflation numbers and Gross Domestic Product (GDP) numbers, so GBP/EUR will be driven by these releases today. Over in the USA we have Retail Sales numbers and a consumer sentiment survey, both of which could affect GBP/USD rates. For more information on how the above could affect your currency requirement, or to get an exchange rate quote to compare with your bank or existing broker, click below to send me a free enquiry now. Click here to send a free no obligation enquiry.
Thursday 6th November 2014 The Sterling/Euro exchange rate has rocketed today, following comments by the European Central Bank (ECB) president Mario Draghi, as I predicted could well happen in my post earlier this week. Central Bank Decisions and the Pound/Euro exchange rate
Both the UK and EU central bank announced their latest decisions on interest rates today. There were no surprises, with both keeping their benchmark rates on hold. However after the EU decision, the president of the European Central Bank (ECB), Mario Draghi, said in a press conference that the bank stands ready to give the Eurozone further economic stimulus "should it become necessary". Mr Draghi said: "Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate." Markets have taken this as a negative sign for the Eurozone, and the Euro weakened accordingly. As you can see form the chart below, there was a significant spike of around 1 cent, bringing the GBP/EUR rate to within a cent or so of the highest it’s been in 6 years.
What next for Pound/Euro?
To me the trend is just repeating itself. Many times over the last few months we have seen rates reach this level, before dipping back off again. Without anything on the horizon likely to strengthen the Pound, I think there is a good chance we could see the rate drop back again. If you need to buy Euros, I would consider locking in a rate now while it’s so good. You can fix the current rate for up to 2 years and only lodge 10% of what you want to convert. Euro sellers have a tougher decision. Longer term forecasts suggest the rate getting to €1.30, but short term you could see moves in your favour. If you need to buy or sell Euros, or indeed any international currency then click below to make a free enquiry on the rates I can source for you. I can help with bank to bank transfers from amounts from £5k to £5m. I’m afraid I cannot help with cash or holiday funds. Click here to make a free no obligation enquiry today.
Monday 3rd November 2014 We have seen Pound/Euro rates reach €1.28 today, due to slightly better than expected manufacturing numbers that gave Sterling a boost. The other reason rates have climbed up from €1.27 is a weaker Euro following last week’s decision from the USA to end their QE programme. The end of QE in the states strengthened the US Dollar, pulling rates down below $1.60 where they remain today. 
Below I have listed this week’s economic numbers that I think could affect exchange rates. I personally think that Pound/Euro will slip back away again in the coming days, as has been the general trend in the last few weeks. The high GBP/EUR rate is not good for the UK economy as it makes our goods and services more expensive. In the last few weeks we’ve seen BoE members and even the Prime Minister stating their wish for interest rates to stay at record lows for a long time to come. This could well be an attempt to weaken the Pound to help our exports, and I believe this could hold the Pound back from making further gains. If you need the best exchange rates, would like a quote, or to simply find our more about the foreign exchange services I can offer, click here to send me a free no obligation enquiry today. This week’s economic data releases
Tuesday 4th November – There are various economic figures from Australia today, including an interest rate decision, Trade Balance figures, and the latest Retail Sales numbers, so GBP/AUD could face some volatility. In the UK the only data of note is construction numbers. Over in the USA we have Trade Balance numbers, and the Bank of Canada’s Governor gives a speech. New Zealand has its latest employment numbers which could affect GBP/NZD Wednesday 5th November – A very quiet day for economic data releases. The only UK release is Services PMI. The Eurozone releases Retail Sales numbers in the USA we have manufacturing figures. Thursday 6th November – Today could be interesting for the Pound. We have Industrial and Manufacturing numbers at 09:30am, followed at lunchtime by the BoE decision on Interest Rates. I expect no movement, but any accompanying statement could affect Sterling. The Eurozone also has its interest rate decision. Again rates will be left on hold in all likelihood, but any hint of stimulus in the accompanying statement could weaken the Euro, pushing up GBP/EUR. In the afternoon, a GDP estimate will also be closely watched as an indicator of how the UK economy is performing. Friday 7th November – Today’s main UK release is Trade Balance data. This is important as if exports are down, it could mean the BoE talking the Pound down to try to help this area. In the USA we have Unemployment and Non-Farm payrolls, which are very hard to forecast. As a result, the actual figures often surprise the markets and affect GBP/USD rates. For more information on how the above could affect your currency requirement, or to get an exchange rate quote to compare with your bank or existing broker, click below to send me a free enquiry now. Click here to send a free no obligation enquiry.
Thursday 30th October 2014 Sterling/Dollar has plummeted overnight, following the FED’s expected decision to end its Quantitative Easing (QE) programme. This also had the effect of weakening the Euro, pushing GBP/EUR rates higher. The charts below show the currency movements: FED announce end to QE
The US Federal Reserve has announced it is ending its quantitative easing (QE) stimulus programme, saying that it was confident the US economic recovery would continue, despite a global economic slowdown. The central bank, which also said it would not raise interest rates for a "considerable time", has gradually cut back QE since last year. While the decision was expected, it did have the effect of strengthening the US Dollar, bringing rates down below the $1.60 mark, however this morning GBP/USD recovered to around $1.60. The main reason the rate fell is their hawkish tone on interest rates.Pound/Euro rises
As investors bought the Dollar, they sold the Euro which caused the single currency to weaken, pushing rates up above €1.27. This has happened several times over the last few months, so I expect rates to dip back off again in the coming days and weeks as has been the trend of late. Getting the best exchange rates
If you need to perform a currency transaction, get in touch with me today by clicking here. The rates I can provide are up to 5% better than banks or other brokers can offer. In addition to excellent rates, I can also provide an insight into what is moving the rate, to help you to decide when to fix your rate.
Click here to send a free enquiry today.
Wednesday 29th October 2014 Pound/Euro rates have slipped slightly in the last 24 hours, bringing the mid-market rate down to €1.2647. While a little lower than the recent 6 year high, it’s still a very attractive buying level for Euros given that last summer rates were as low as €1.14. GBP/EUR gains unlikely as UK interest Rates set to remain low
Part of the reason the Pound has failed to go any higher against the Euro is the fact interest rates are no longer expected to go up any time soon. Reinforcing this view was a speech this week from the Bank of England (BoE) deputy governor Jon Cunliffe. In it he said that interest rates can be kept at their current record low level for longer than first thought, saying that weak pay and lower inflation, coupled with slower UK growth and slowdown in the global economy meant the BoE should remain "cautious". So with rates now set to remain at their record low of 0.5% for quite some time, it’s hard to see what would push Sterling exchange rates higher. Those that need to buy Euros should therefore consider locking in a rate now while it is still close to the 6 year high. Those selling Euros however should be cautious. While the Pound is unlikely to gain, a deterioration of the EU economy could weaken the Euro, meaning less Pounds for those that are converting the single currency back to Sterling. If you need to convert Pounds to Euros, or Euros to Pounds, click here to get a free quote and find out more about the foreign exchange services I offer. Rates I source are up to 5% better than banks can offer, so you could save thousands of Pounds by comparing the rates I offer. Pound/Dollar set to drop?
GBP/USD has been on the way down for a few months now, dropping from $1.72 to $1.60. Currently rates hold firm around $1.6140. However the US Federal Reserve is expected to announce the end of its quantitative easing (QE) programme later, and this could strengthen the Dollar, make it more expensive to buy and pull the GBP/USD rate down further. The FED has been gradually cutting back the scheme, which began in 2008, since late last year. The end of QE, assuming it does indeed come, will nonetheless be an important milestone in the repair of the US economy and likely strengthen the Dollar. Whether it makes a difference to the GBP/USD rate however remains to be seen. As it’s widely expected to happen, it will be priced into the rate already, but it’s impossible to know by how much. I wouldn’t be surprised to see rates drop below the $1.60 level throughout the rest of 2014. If you have a requirement to buy or sell USD, click here to send me a free enquiry to see how I can assist you in getting the best possible rates.
