Thursday 31st July 2014 As I said may happen in my recent post, the Pound has fallen further against the Euro and Dollar this week. Let’s take a look at what has been happening… Pound/Euro drops into the €1.25’s
Looking back, the GBP/EUR rate has risen by more than 10% in the last year, however it now looks like the Pound’s year-long rise may have come as far as it can, at least in the short term. On the one hand many remain positive on Britain’s economic prospects however the feeling is growing that Sterling is “overvalued” and this may hamper efforts to re-balance the British economy. The IMF agree - this, the International Monetary Fund has warned the Chancellor that the pound is 5% to 10% overvalued. Wages are growing very slowly and although output is beginning to pick up, the recovery is still at an early stage and there is still a lot of slack in the economy. Another risk for the Pound is Scotland’s September vote on independence might pose to sterling. Morgan Stanley analysts said that a “yes” vote could cause sterling to slip by up to 10% on a trade-weighted basis, retracing its gains over the past year. 
This week, poor UK consumer confidence and better economic figures from the Eurozone have pushed Pound/Euro lower. It’s impossible to know which way exchange rates will move of course, but if you need to buy or sell Euros, click here to have a free consultation on how I can help you get the best exchange rates, and protect you against the market moving the wrong way. Pound/Dollar drops into the $1.68’s
We recently saw this currency pair hit a 5 year high well above $1.70. I’ve been expecting it to come down for some time once the US economy starts looking better. This has now happened with this week’s US GDP numbers coming in better than expected, showing their economy is starting to recover. As it does, they will wind up their Quantitative Easing programme, raise interest rates, and this may pull rates lower towards the $1.60’s. 
The turmoil in Ukraine isn’t helping GBP/USD rates either. As global economic uncertainty gathers in the markets, international investors move funds to the safety of the US Dollar, and this also pulls rates lower. Get in touch for a free quote on our exchange rates
Whatever your currency needs, large or small, my service can help you achieve the best exchange rates and utilise contracts that can protect your bottom line. Click here to make a free enquiry today and find out how I can help.
Tuesday 29th July 2014 Good morning. It’s been a very quiet start to the week for the currency markets, with no data of note being released yesterday. Today is also quiet, so in today’s post I will give a quick round up of where exchange rates stand, and list the rest of the week’s economic data releases that I think could affect exchange rates. Pound/Euro
The GBP/EUR rate cannot seem to sustain its highs. We have seen the rate climb into the €1.26’s before dropping back off. That’s exactly what we’ve seen happen again this morning. So why is the rate to buy Euros peaking and failing to climb higher? It’s because all the recent good news regarding the UK economy is no longer surprising the markets, and is now largely priced into the value of the Pound. I think in the short to medium term it’s unlikely we’ll see any more significant gains. In the medium to longer term however, if the EU needs to try and pump money into the economy then the Euro could weaken further and push rates higher. Also the closer we get to interest rates going up then the Pound could start climbing, but that’s probably some way off. Those looking to buy Euros should consider fixing the rate while it’s at a 2 year high, given that the rate seems to have peaked. Those that need to convert Euros to Pounds over the next year should consider fixing the rate on a Forward contract. While I don’t expect the rate to go higher in the short term, I do expect it up around €1.30 into next year. Get a Pound/Euro quote
Pound/Dollar
With this exchange rate, we keep seeing it break above $1.70 before dropping back off again. This morning rates have dipped back into the $1.70’s.The reasons for this are the same as outlined in the Euro section above – the impressive UK economic figures are now largely priced into the Pound. Unlike Pound/Euro however, I expect Pound/Dollar rates to drop back away. There are 2 reasons I think this. Firstly, the US economy is starting to recover, and as this continues the Dollar will gain strength and become more expensive to buy. Secondly, as the Euro gets weaker, generally the Dollar gets stronger, so I expect this currency cross to drop off in the coming months.Get a Pound/Dollar quote
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Are you buying selling property abroad and need to convert funds? Do you have accounts overseas you need to keep topped up? Perhaps you are a business that buys and sells goods in the Eurozone and need to convert between Pounds and Euros? Whatever your currency needs, I can help you source excellent exchange rates, fast international transfers, and various contract types to protect against markets moving against you. Send me a free enquiry today to get a quote and see how we can help you. This week’s economic data that could affect exchange rates
Tuesday 29th July 2014 - The only data of note today was released earlier this morning, with UK mortgage approvals coming in slightly better than expected but lending figures slightly below the forecast. They effectively cancelled each other out so no change for the Pound. Later this afternoon we have US Consumer confidence numbers, which could affect Pound/Dollar rates. Wednesday 30th July 2014 - There is nothing of note from the UK today other than consumer confidence figures at midnight. We do however have lots from the EU and US so it could be a volatile day on the currency markets. Starting in Europe, we have Industrial Confidence, Economic Sentiment measures, in addition to inflation numbers from Germany. So lots here that could give an indication how the EU economy is faring, and this could affect Pound/Euro rates. It’s a very busy day in the states. We have Gross Domestic Product (GDP) figures which often affect exchange rates. There is also an interest rate decision, and although I expect rates to stay on hold, any comments or hints at future policy could affect GBP/USD. Thursday 31st July 2014 - Pound/Euro could be affected today by German Retail Sales and Unemployment numbers, and EU wide inflation figures. Canada releases its latest GDP figures, and over in the USA we have measures of unemployment. Friday 1st August 2014 - Inflation figures from Europe and the UK will be watched closely today by Sterling/Euro buyers. Other than that all data is from the states: Earnings, Unemployment, Inflation, Sentiment, and the all-important Non-Farm Payrolls that often causes large swings in the GBP/USD rate. To discuss your currency requirements or get a free quote, click here to send a free enquiry.
Wednesday 23rd July 2014 Since my last post on Monday, the Pound/Euro rate had been slowly creeping up until today, due to weakness in the Euro. In fact this morning rates touched a new high of €1.27, but as has been the case of late the gains were not to last… Bank of England minutes causes Pound to fall
This morning at 09:30am the Bank of England released its recent minutes showing what was discussed and how they voted when interest rates were recently kept on hold. As you can see from the chart below, GBP/EUR edged up to €1.27 just before the announcement. This was because there might have been some of the 9 member committee that had voted for rates to rise. 
As it happened, all 9 members voted to keep rates on hold, signalling that rates are likely to remain at 0.5% for some time to come. Even though unemployment is dropping and the economy is growing, I think rates will not go up anytime soon until wage growth catches up. If they raise rates too quickly it could destabilise the recovery. You can read a detailed report on what happened today here on the BBC website.Will Pound go up or down against Euro?
For the reasons outlined above, I can’t see the Pound gaining much more strength in the short term, so those that are looking for the best exchange rates should consider fixing now while it’s so favourable. By holding out hoping for more gains, you will probably find there is more to lose than there is to gain. For those converting currency back to Sterling, get in touch for a free consultation on your options. The Pound will get stronger eventually as we get closer to a rate rise, but there are ways to protect against the market moving against you such as Forward contracts, Stop and Limit orders. To find out more about the excellent exchange rates I offer, the contract types available, or simply to have a chat about which way the currency markets are going then click below to send me a free enquiry today. Click here to send a no obligation enquiry now.
Monday 21st July 2014 The Pound fell a little towards the end of last week, as worries about the tensions between Russia and the West in Ukraine meant that investors sought out safe haven currencies. When there is global uncertainty, it often causes ‘safe-haven’ currencies like the US Dollar to strengthen as international investors move out of riskier currencies, like the Pound. This is the main reason for the slip from the recent highs we have recently seen. Sterling has surged over the past year as Britain's economy has shown signs of a strengthening recovery, fuelling expectations that the BoE will hike interest rates before the year's end. In contrast the EU economy is faltering and they are likely to pursue stimulus measures which have weakened the Euro. Despite this, in recent months the Pound gets to levels in the €1.26’s against the Euro and the $1.71’s against the Dollar before dropping back away. Given Sterling can’t seem to sustain its gains, now is a good time to take stock of your currency needs. To discuss how I can help you get the best exchange rates, or to simply have a chat with a currency expert to talk about which way the rate may move, get in touch with me for a free consultation. I can discuss the currency you need to buy or sell, explain what could move the rate and help you to decide when to fix your exchange rates. When the time comes, I can provide you a quote to compare with your bank or existing broker, and even a small improvement could save you thousands when converting a large sum. Click here to send me a free no obligation enquiry today This week’s economic data releases
What causes exchange rates to move? There are 4 main things – economic data releases, political events, natural disasters and uncertainty caused by war. Most of things are impossible to foresee, such as the current crisis in Gaza and Ukraine which could cause investors to seek safe haven currencies such as the US Dollar. What is known in advance are economic data releases. I have listed below the coming weeks scheduled releases that could affect exchange rates. For more detailed information on how these could affect the exchange rate you are interested in, contact me for a free consultation. Tuesday 22nd July 2014 There are no UK releases today. In Australia we have a speech by the RBA governor so there may be some volatility for GBP/AUD rates. Other than that all data is from the USA – Inflation numbers and Home Sales. Wednesday 23rd July 2014 Today could be interesting for the Pound, as we have the latest Bank of England minutes, showing what was discussed and how they voted in their recent decision to hold interest rates. There could be clues as to when UK interest rates may rise which could affect Sterling. In the Eurozone we see Consumer confidence figures and over in New Zealand we have their latest interest rate decision and Trade Balance figures. I think they may raise interest rates which would cause GBP/NZD to fall. Thursday 24th July 2014 UK Retail Sales numbers are released this morning, which are a good barometer of overall economic activity and so could affect the Pound. In the EU we have some inflation numbers. In the USA the latest jobless numbers and home sales figures are released, in addition to manufacturing PMI figures. Friday 25th July 2014 UK Gross Domestic Product (GDP) numbers are released this morning. The expected figure is 3.1% - any higher and the Pound could rise, any lower and it could fall. In the USA we have Durable goods orders which often involve large investments which are sensitive to the US economic situation, so this release could cause some volatility in GBP/USD rates. If you are seeking the best exchange rates, send me a free enquiry today.
Tuesday 15th July 2015 Good morning. The Pound has surged higher this morning after figures showed that the rate of UK inflation rose sharply in June. The numbers were more than the market had forecast, and the inflation rate is now close to the Bank of England's 2% target. As you can see from this morning’s GBP/EUR graph, this caused rates to rise from 1.2530 up to 1.26 where it has levelled off. Why did inflation numbers cause the Pound to rise?
As regular readers will know, it’s to do with interest rates. In fact that’s the reason behind the Pound’s gains in the last few months. The high inflation figures mean there is now more chance of a rise in UK interest rates, which have been held at a record low of 0.5% for a long time. "The news will further fuel expectations that the Bank of England will start raising interest rates sooner rather than later, with November looking the most likely month for the first hike," said Chris Williamson, chief economist at research firm Markit. Why do higher interest rates strengthen a currency?
Investors get more return, so the rumour of rates going up means international investors buy the Pound causing it to gain strength, and this pushes exchange rates up. Pound/Euro now back close to 2 year high
The current level is very attractive indeed; however rates have reached this level several times without managing to break higher. Recent trends show that when the rate gets to this level, it drops back away again. Of course there is no way to know if this will happen again, but those with a Euro requirement should consider taking advantage of the rate while it’s so good.For a free consultation on the rates I can offer you, click below to make a free no obligation enquiry. I can source rates up to 5% better than banks or other currency brokers may offer, so you could save a considerable sum. Click here to send me a free enquiry today.
Monday 14th July 2014 The Pound has fallen further against both the Euro and the US Dollar today, pulling exchange rates down to €1.2530 and $1.7070 respectively. There has been no economic data of note today to explain the movements, and the reason for the fall is the market positioning itself ahead of Speeches by the heads of the 3 major central banks, the Bank of England (BoE), European Central Bank (ECB) and US Federal Reserve (FED). In today’s post I’ll take a look at why rates have fallen and what these speeches may mean for whether the Pound will go up or down against the Euro. Pound/Euro
The rate had recently hit a 2 year high of €1.2680, however in the last week has slipped back away. This is partly due to a run a worse than expected UK economic data. Today rates fell further ahead of a speech by the ECB president Mario Draghi. The Euro has been weakening recently on speculation that the ECB may pursue some sort of stimulus, perhaps in the form of Quantitative Easing. This evening’s speech is therefore very important. The Euro is actually still quite strong against other currencies, and this strength is hurting the EU recovery. So he may well hint at some easing, in which case I would expect Pound/Euro to rebound. We will also see a speech by the BoE chief Mark Carney tomorrow. In recent speeches he has given mixed signals on the future of UK interest rates, which has caused the Pound to fluctuate up and down. In short, if he hints at rates going up, the Pound will rise. If he is not forthcoming with any indication of a rate rise, the Pound could fall. Pound/Dollar
This currency pair recently enjoyed trading near 6 year highs, but has dropped off a little recently. The future movements of GBP/USD will partly depend on Mark Carney’s comments tomorrow, as I have explained in the Pound/Euro section. Of more importance in my opinion will be Federal Reserve Chair Janet Yellen's congressional testimony tomorrow, in which she may well give clues on the outlook for U.S. monetary policy, and interest rates. If she hints at an interest rate hike on the back of an improvement in U.S. data in the second quarter, Pound/Dollar could fall more. Get in touch for a free quote
If you have a currency transaction to perform, get in touch for a free consultation on what is moving rates. I can source excellent rates of exchange that could save you thousands compared to your bank or existing broker. It costs nothing to make an enquiry, so you have nothing to lose and potentially much to gain. Click here to send me a free no obligation enquiry today.
Tuesday 8th July 2014 The Pound has fallen from its recent highs this morning, after figures showed Industrial and manufacturing production in the UK was much less than expected. Manufacturing output in the UK recorded a surprise fall of 1.3% in May, the biggest decline since January 2013. The figure from the Office for National Statistics (ONS) was much weaker than economists' forecasts of an increase of 0.4%, and as a result the Pound fell by around 0.5% against other currencies including the Euro. You can see the drop in the chart below when the figures were released at 09:30am; however rates have recovered back to €1.26 against the Euro, and $1.7120 vs the US Dollar. So why exactly did the Pound fall?
Regular readers will know that it is speculation on UK interest rates that has been driving the Pound upwards recently. Today’s figures are a bit of a reality check for the UK after a few months of very positive data. The markets see today’s figures meaning there is now less chance of an interest rate rise before the end of the year. The rumour of higher interest rates has been driving investment towards the Pound due to the higher potential return. Today’s figures mean it’s less likely, and so the Pound has fallen slightly. Get in touch for a free quote
I update this blog to keep my existing and potential clients up to speed with what is happening with exchange rates. I am a senior currency broker for one of the UK’s leading foreign exchange companies, and I can help you achieve exchange rates that are up to 5% better than banks or other brokers can offer. It’s a good time to look at exchanging currency given the current rates are at multi-year highs. If you are buying or selling property abroad, topping up your Euro account, or a business that buys or sells in a foreign currency, I can help you. Click below to send me a free no obligation enquiry. If you need to move £1k to £50m on a bank to bank transfer basis, you may be surprised how much you can save. Click here to send a free enquiry now. Alastair Archbold
Friday 4th July 2014 It’s been very quiet on the markets today due to the Independence Day holiday. There were developments yesterday however when we saw the Euro weaken after the European Central Bank (ECB) president Mario Draghi make comments about interest rates. ECB comments weaken Euro pushing GBP/EUR above €1.26
European Central Bank (ECB) president Mario Draghi said yesterday that Eurozone interest rates will stay at 0.15% for an "extended period" of time. He also said that the ECB was "unanimous in its commitment" to using "unconventional instruments within its mandate". What does this mean? Well firstly low interest rates mean the EU is not an attractive place to hold funds. As a result investors sold Euros, weakening the single currency making it cheaper to buy, and as a result the Pound/Euro rate has broken the €1.26 level, and it’s now the best time to buy Euros for nearly 2 years. How to take advantage of the current rate
Rates had been stuck at €1.25 for the last month, moving within a cent of that rate. We’ve been at similar levels to this several times in the last few months, only for rates to drop back away. While it’s impossible to know if rates will fall again, or rise further, now is certainly a good time to secure Euros given it’s the best rate for 2 years. You can lock in the current rate even if you don’t need your currency now. A Forward contract allows you to reserve the current rate by lodging 10% of the total amount you want to convert. When you want your currency delivered to your account, you simply settle the remaining 90%. In this way you can guarantee your rate, protect yourself against the market dropping, and budget effectively for your currency requirement; especially useful if you are buying property abroad for example. Get in touch with me for a free consultation
To find out more about Forward contracts, get a free quote, or simply discuss your currency requirement click here to send me a free no obligation enquiry. I can source rates for over 30 currency pairs, for example GBP/EUR, GBP/USD, Euros back to Pounds etc. – the rates I can achieve are up to 5% better than your bank or existing broker may offer, so why not get a free quote. It only takes a few minutes, does not cost or obligate you in any way, and you save thousands of Pounds. Click here to send a free enquiry now.
Wednesday 2nd July 2014 The Pound has surged higher this morning, after data showing UK House prices have seen their highest rise in over 10 years. This coupled with better than expected construction data has strengthened the Pound to a 2 year high against the Euro (€1.2560) and a 6 year high against the UD Dollar ($1.7170). UK House Prices cause Sterling to rise to record levels
House prices across the UK soared by 11.8 per cent in the last year, the biggest annual rise for almost a decade. Britain's booming housing market shows little sign of cooling, with the average property hitting a new all-time high of £188,903. So why has this strengthened the Pound? It’s all to do with interest rates. Last week, the Bank of England moved to put curbs on riskier mortgage lending by announcing that loans of 4.5 times a borrower’s income or higher should account for no more than 15 per cent of new mortgages issued by lenders. The Bank also said that lenders should apply a new 'stress test' ensuring that borrowers can keep up their mortgage repayments in the event of a rise of up to 3 per cent in interest rates over the first five years of the loan. But is this enough? I’m not so sure. Usually to cool the housing market the Bank of England would raise interest rates. However as inflation and wages aren’t growing at quite the same speed as house prices, this could dampen the economic recovery, so it’s unclear whether the BoE will indeed raise rates. The markets clearly think this is now more likely however, as the Pound has risen to multi-year highs against other currencies. Construction is also growing, with this sector showing its strongest growth "for a generation" in the second quarter after a respected survey showed activity continued to surge last month. This also helped push Sterling higher. Get the best exchange rates for Euros and Dollars
If you have Pounds to convert to another currency then it’s currently a very good time to consider moving your funds. Get in with me today for a free quote, as the rates I can source are up to 5% better than the banks can offer, so if you have a currency requirement the savings by using my services can be considerable. I also have various contract types that can protect you against the market dropping, and help you achieve the best possible rates within your time-frame. Click here to send me a free no obligation enquiry today.
