GBP/EUR and GBP/USD forecast outlook

Tuesday 30th September 2014 
Good afternoon. It’s been a busy day in the currency markets, with Pound/Euro rising to €1.2850 but Pound/Dollar dropping to $1.62. in today’s post I will take a detailed look at both these currency pairs, what is causing the rate to move, and where I think rates could head in the coming months. 

Pound/Euro 

As you can see from the chart below, we have seen this exchange rate rise by a point in the last 24 hours. On the one hand the upwardly revised UK growth forecast has given Sterling a slight boost, but it was mostly to do with a weakening Euro. 

Eurozone inflation slipped again in September, with prices rising at their slowest rate in nearly five years. It is the lowest level for eurozone inflation since October 2009, adding to fears of a deflationary spiral. Earlier this month, the European Central Bank cut its benchmark interest rate to 0.05%, and introduced new stimulus measures in an attempt to kick-start the eurozone economy. 

Due to this poor Eurozone data the Euro has weakened and become cheaper to purchase. 

Which way could GBP/EUR head now? 

In light of the latest economic data from Europe, I think it’s quite likely they will have to now pursue a Quantitative Easing programme to stimulate the EU economy. If this happens then the Euro will weaken further. Also, as we get closer to UK interest rates going up, this could strengthen the Pound. So looking at these 2 events on their own would suggest Pound/Euro rates will go higher, although I think this will be into 2015. 

If you need to buy Euros, you could either fix the rate now while it’s close to a 6 year high. Alternatively if you wanted to gamble on rates going higher due to the reasons above, then you should place a ‘Stop Loss’ order to protect you in case the rates drops back away. This has happened several times this year, and with UK political uncertainty likely to affect the Pound next year, could this limit any gains for the Pound? 

Click here to discuss your Pound/Euro or Euro/Pound requirement and get a free quote 

Pound/Dollar 

This currency pair has fallen by a point today to $1.62. Part of this is due to the weak Euro, and investors dumping the single currency to buy the Dollar, strengthening the greenback. Rates have now dropped from $1.72 to $1.62 in the last few months. 

Which was could GBP/USD head now? 

The US economy is now performing very well, as is the UK economy. As the US winds up its stimulus programme, the greenback will likely gain further strength, so I wouldn’t be surprised to see it drop below $1.60 in the coming months. 

Summary 

It’s impossible to know which way rates will go, and I think interest rates and when they will go up in the UK will determine whether exchange rates rise or fall in the next few months. Regardless of which currency you need to buy or sell, having a good currency broker that can guide you through the process and secure you very good exchange rates can save you thousands of Pounds. 

Click here to send me a free enquiry today. I can provide you a quote, explain the options you have depending on your particular requirement and timeframe, and explain what is moving the currency markets. In this way you can make an informed decision on when to fix your rate, and get a quote to compare with your bank or existing currency broker. 

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Pound/Euro hits new 2 year high €1.28+

Thursday 25th September 2014 
The Pound/Euro rate has surged today, smashing through the €1.28 level to a fresh 2 year high. In fact this is now very close to the best Euro buying rates we’ve seen in 6 years. 

Pound/Euro level breaks €1.28, why has this happened? 

There are 2 reasons for the rise, and both involve the heads of Central banks. Early this morning we saw the European Central Bank president Mario Draghi give a speech, in which he said that they were willing to instigate further stimulus measures if necessary. In other words, it’s likely they will pump money into the economy to try and spur it along, and this has weakened the Euro making it much cheaper to buy. 

He said that "We stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation". He also forecast only modest growth in the second half of this year, due to "weaker than expected" preliminary economic data over the summer. 

This afternoon, it was the turn of the Bank of England governor Mark Carney. In his speech which you can read in full here, he said that “with many of the conditions for the economy to normalise now met, the point at which interest rates also begin to normalise is getting closer. In recent months the judgement about precisely when to raise rates has become more balanced.” Adding that “While there is always uncertainty about the future, you can expect interest rates to begin to increase.” 

This has really given the Pound a push higher, and you can see the results of these comments from the ECB and BoE in today’s GBP/EUR chart: 

 

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Will rates keep going up? 

Nobody can predict where rates will go, but I think all the good news about the UK economy is now priced into the market, and I personally can’t see much more gains to be had. 2 years ago we were in a similar position, with many thinking the rate would break €1.30, but within 6 months it was down at €1.15. 

I’m not suggesting it will plummet again, but with the future of the rate impossible to forecast, if you needed to buy Euros is it worth risking these amazing levels currently available? I think those that do have much more to lose than to gain. In my view, you are holding out for an inch and risking losing a yard! 

How to get the best rates of exchange

Whether you are buying or selling Euros, Dollars, Swiss Francs, Aussie Dollars or any international currency, I can help you achieve commercial exchange rates very close to the mid-market level. I also provide various contract types to help protect against the market moving against you. Using my service exchange rates can be fixed for anywhere up to two years into the future, removing uncertainty, fixing a sterling price for your overseas property or imported goods or services. 

To find out more and to get a quote, click here to send me a free enquiry today.

Will Pound go up or down for rest of 2014?

Tuesday 23rd September 2014 
As I write today’s post Ed Miliband is giving a party conference speech. I’m choosing this time to write my report as I don’t think his words will have any effect on exchange rates whatsoever, and the currency markets will also be taking little interest in his comments. It is likely however that with the Scottish referendum now out of the way, political uncertainty ahead of next year’s General Election will start to affect the Pound. In today's post I'll give my views on what could move exchange rates for the rest of the year.

The currency markets don’t like uncertainty, and I think that is keeping the Pound in check from going any higher. Following last week’s spike in the Pound, exchange rates now seem settled at around €1.27 vs the Euro and $1.6350 against the US Dollar. 

One example of the uncertainty relating to the UK economy, is possible constitutional changes in the United Kingdom following the Scottish referendum. This could affect investment into the UK and so weaken the Pound off slightly. This combined with the upcoming election is likely to keep the Pound from gaining significantly. 

What could affect exchange rates this week?

The only thing I can see this week that could affect the Pound is a speech by the Bank of England (BoE) governor Mark Carney on Thursday. He hasn’t exactly been consistent in his comments on when interest rates will go up in the UK, so the markets will be watching for any comments he may make. Any hint of a rate rise then the Pound could strengthen, if he is dovish however and hints rates are set to remain on hold for some time, we could well see Sterling exchange rates drop away. 

All in all, I think those that need to convert Pounds to another currency should consider taking the rate while it’s close to a multi-year high. Even if you don’t need your currency for some time, you can fix today’s rates for up to 2 years by lodging 10% of the total you need to convert. 

What if I'm converting Euros back to Pounds?

One thing that could affect things if you are converting Euros to Pounds however, is the chance of further stimulus by Europe. If the European Central Bank decide on further drastic measures to try and boost the economy, the Euro could weaken pushing Pound/Euro rates up. 

Below I will list the other things I think could change exchange rates this week. Remember that if you need to convert currency, perhaps for a property abroad for example, you can get in touch with me for a quote by clicking here. I can source excellent exchange rates very close to the ‘mid-market’ level and you could save thousands of Pounds by getting a slightly better rate. 

Click here to send me a free enquiry and obtain a quote 

This week’s remaining economic data that could affect exchange rates 

Wednesday 24th September – Quite today in terms of economic data releases. We have some Business Climate and sentiment measures from Germany that could affect Pound/Euro. In the states we have information on mortgage approvals and home sales that could affect Pound/US Dollar. 

Thursday 25th September – The only real UK data of note today is a speech by Bank of England (BoE) governor Mark Carney. He hasn’t exactly been consistent in his comments on when interest rates will go up in the UK, so the markets will be watching for any comments he may make. Any hint of a rate rise then the Pound could strengthen, if he is dovish however and hints rates are set to remain on hold for some time, we could well see Sterling exchange rates drop away. 

Friday 25th September – Another quiet day with the only thing likely to move Pound/Euro rates being a consumer confidence survey from Germany. All other data is from the USA – GDP figures, consumption and expenditure, and a consumer sentiment index. All of this could affect GBP/USD rates. 

If you want the best exchange rates, send me a free enquiry by clicking here.

Pound rallies after no vote, but spike is short lived

Friday 19th September 2014 
Well that was certainly an interesting week in the currency markets. Not since the crash of 2008 have I seen such large volatility and huge amounts of my clients securing currency to protect against adverse exchange rate movements. Having been on the trading floor for over 24 hours in the last 2 days I'm about ready for the weekend!

So now we know, Scotland will remain part of the United Kingdom. I thought it was likely the No vote would win the day, and that is what we have seen. 

What effect did the No vote have on exchange rates? 

Over the last few weeks Sterling has dropped a little on fears that Scotland would vote Yes for independence. Last night when it became clear Scotland would vote against leaving the union, Sterling spiked to multi-year highs against the Euro, as the chart below shows: 

 

However the spike was short lived. I warned earlier in the week that in the event of a No vote, we would probably see a slightly spike in Sterling but it would then drop back off again, and as you can see from the chart above, that is exactly what has happened. 

Which way could exchange rates move now? 

It’s impossible to know, but I personally can’t see rates getting any higher. The levels we’re at right now are around a 2 year high vs the Euro, and not far from a 6 year high. I think focus will now return to fundamental economic data. 

On the one hand, Unemployment is down and interest rates are likely to rise next year. But I don’t think this will cause the Pound to go higher as any increases are going to be gradual. There is also the issue of the economic uncertainty that further devolved powers to Scotland will create, and of course in going down this road Wales and England may also wish to negotiate new terms. Currency markets hate uncertainty and this could cause the Pound to drop further. 

Its worth noting a few years ago when rates were at these levels, we quickly saw things drop so those holding out for further gains should be cautious 

Get in touch to discuss your options and get a quote 

If you need to convert currency, either buying Euros or Dollar or converting a currency back to Pounds, I can help you secure excellent commercial exchange rates. 

I can also discuss your particular requirement, talk over which way rates could move, and let you know the options you can consider to ensure you don’t get a worse rate than necessary. I have save my clients tens of thousands of Pounds in the last few days alone with some of the best commercial exchange rates available. Click below to send me a free enquiry to see how much I could save you. 

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GBP/EUR breaks €1.27 - 2 year high. Exchange Rates Forecast 2014

Thursday 18th September 2014 
Today is the day of reckoning for Scotland, and the currency markets are going to be very susceptible to the result, whichever way it goes. Let's have a look at how Pound/Euro and Pound/Dollar rates are faring ahead of tomorrow's result:

Sterling/Euro 

We’ve seen a spike in Pound/Euro rates today, and at the time of writing GBP/EUR sits at 1.2720 - this is the highest in over 2 years. in fact if you look further back at average rates, we're within around 1 cent of the highest Pound/Euro rate in 6 years. That was back in October '08 when the credit crunch hit destroying the value of Sterling.

Part of the spike is weakness in the single currency, but mostly it is the Pound that has been gathering strength as a ‘No’ vote for Scotland is being priced into the market. 

This is the highest it’s been in well over 2 years. Today alone we have secured a record amount of Euros for clients and this is for 2 reasons. Firstly it’s the best it has been in years. Secondly, the chance of a big drop in rates if Scotland vote yes mean most clients want to fix a rate now to protect against a drop. 

Even if the vote is No, it’s hard to see the Pound gaining significantly given the high it’s already at. I think the NO vote is already priced into the market for the most part, and the uncertainty which would remain even if independence is rejected will likely hold the Pound back. 

If I needed Euros, I would be keen to fix a rate while it’s the best it’s been in years. For me, the downside risks for hanging on to see what happens tomorrow would be too great. Those selling Euros should have a Stop Loss in place to protect against the Pound gaining further. 


If you would like to discuss which way exchange rates are moving, and get a quote to see how much we can save you on your currency, click here to send a free enquiry. 

Sterling/Dollar 

Rates have climbed for this currency pair, after falling overnight. The reason it dropped was due to comments by FED chair Janet Yellen last night. She indicated interest rates will be going up at some point in the USA, and that they will have wound up their QE stimulus programme within a month. 

This strengthened the Dollar and pulled rates down as the chart above shows. However the Pound has reversed these losses due to the strengthening of the Pound today. Sterling has gained as a ‘No’ vote gets priced into the market. 

As with any currency against Sterling, the risk of a big drop should they vote Yes is huge. Get in touch today to discuss your currency requirement. I can source rates up to 5% better than banks and other financial institutions can offer, and I also have various tools and contract types than can protect you against the market moving the wrong way. 

Get in touch for a quote on your exchange 

Regardless which currency you may need to buy or sell, get in touch with me here for a quote on your exchange. I usually have no problems beating rates provided by banks or other currency brokers, and a better rate could save you thousands. 

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Protect your currency requirement against Scottish Referendum

Tuesday 16th September 2014 
Good afternoon. Significant volatility remains in the currency markets, with the Pound/Euro rate continuing to fluctuate in value due to uncertainty over the Scottish referendum. 

Pound/Euro over the last week 

As the chart below shows, the last week has been very choppy for Sterling Euro. We have seen a low of €1.24, a high of €1.26, and in just the last 24 hours it’s moved up and down by nearly a cent. 

These movements are being driven by investor sentiment as the Pound is bought and sold on speculation on what may happen with this week’s Scottish referendum vote. 

What would happen to the Pound if the vote is Yes? 

It is of course impossible to predict which way exchange rate moves, if it were possible I would not be writing these market updates from the trading floor, I would be relaxing on my super yacht in the Mediterranean! What we can do is take a view on what may happen with exchange rates, and explain the tools available to protect against the rate moving the wrong way. This is a much better strategy than simply hoping the rate won't fall. 

My view is that should Scotland vote Yes, then the uncertainty this would create in the financial markets means that Sterling would face a huge sell-off. As investors dump the Pound many more would join the bandwagon and we could see exchange rates fall by up to 5%. 

What would happen to the Pound if the vote is No? 

This is harder to predict. Some think that the Pound is being held back by the possibility of independence, and that if the vote is No Sterling will rebound. I’m not so sure. In the event of a no vote there will still be much uncertainty surrounding the future economic realities of further devolution, and the currency markets hate uncertainty. So I think at best we might see a temporary spike in the Pound, but if so it will be short lived. 

What you should do to protect your exchange rate 

You can get in touch with me here for a free consultation on your options. I can explain the different paths you can take so you can take an informed decision on when to fix a rate. For example those buying Euros may wish to use a Forward contract to lock the rate in advance of the result, protecting against the market dropping. 

Those converting Euros to Sterling could look to place a ‘Stop Loss’ order to hedge against the rate moving the wrong way, while still being able to take advantage of any Sterling weakness. 

Whatever your currency requirement, I can help you with various contract types, over 10 years’ experience in the Foreign Exchange markets, and rates of exchange that are incredibly competitive, and up to 5% better than banks can offer. 

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Exchange Rates Forecast: Scottish Referendum/Central Banks

Wednesday 10th September 
Good afternoon, and welcome back to my regular currency updates which will resume my blog today. I’ve been in Europe for a week so apologies for the lack of news in recent days. 

Much has happened since I’ve been away however that has had a big impact on exchange rates, so I’ll run over the recent developments and what this means for the Pound against other currencies. The main topic is the Scottish independence vote, so read on to find out how this might affect Sterling. 

If you're reading this, you probably have an interest in which way the exchange rate is going, and in turn want to achieve the best exhcange rate you can, at the right time. Click here to send me an enquiry, have a free consultation, and a quote on the exchange rate I can offer you. 

The topics I’m going to cover today are as follows: 

• ECB cuts interest rates 
• Mark Carney signals no interest rate rise until 2015 
• Scottish independence vote causing big swings for the Pound 

ECB cuts interest rates 

Last week’s surprise was the European Central Bank cutting interest rates. I mentioned before I went away that I thought they would announce some sort of stimulus, but I didn’t think they would cut rates again. The Euro weakened and Pound/Euro rates went up, but not by much. 

I was quite surprised to see rates in the €1.24’s against the Euro, but that is because the Pound has also weakened which I will cover in a moment. Against other currencies, the Euro is very weak indeed. 

Mark Carney signals no interest rate rise until 2015 

The Bank of England governor said yesterday rates aren’t going up in the UK until spring 2015. The Pound has weakened on the news, as regular readers will know that in the last few months, talk of an imminent rate rise has been giving Sterling strength. 

However, Carney doesn’t seem to know what he wants, giving conflicting information, and so watch out for any other speeches or comments he makes. If he indicates interest rates may rise, the Pound could gain. If he indicates it’s some way off as he did yesterday, the Pound will fall like it did this morning. 

Scottish independence vote causing big swings for the Pound 

This is the big one. Just today, this story has caused the GBP/EUR rate to drop from 1.25 down to 1.24, and then recover all the way back to 1.25 again. This might not sound like much, but it’s a huge change in a single day, and can make an enormous difference to any currency conversion you may need to do. 

So what’s been going on? The vote for independence is only a few days away, and polls at the moment are around 50/50 as to which way it will go. 

If they vote Yes, then it has serious economic implications. For exchange rates, it could mean the Pound weakening by up to 15% which would send exchange rates plummeting. If they vote No, then the Pound would likely gain strength and rates go up. Either way, there is likely to be significant movement in the price of the Sterling. 

Shell, BP, Standard Life have all made comments today about the potential economic effects, and it is these comments that have been pulling rates all over the place today. 

My View?

This is my personal blog, and my personal view is that many people, especially the 16 & 17 year olds, will be voting with their heart and not their head. They will be using this as a protest vote against the current government. What they don’t realise is this isn’t anything to do with politics, and if they vote Yes, there will be no going back, and a 300 year old union will be gone. I was born in England, but I’m half Scottish, most of my family live there, and I class myself as British. I hope they vote no. A Yes vote will probably bankrupt the country and create a pointless border. 

I think when it comes to the crunch the vote will be no. The alternative could send exchange rates plummeting.

Getting the best exchange rates 

I can source you exchange rates very close to the published market price, so if you need to buy or sell Euros, Dollars or any major international currency, get in touch for a quote and to find out how I can help you. 

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Pound/Euro forecast September 2014

Monday 1st September 2014 
Good morning and welcome to a new month. Pound/Euro rates have started quite strongly at €1.2650 due to a weakening Euro, but Pound/Dollar remains low at just above $1.66. In today’s report I will outline what has pushed GBP/EUR rates higher, the forecast for September, along with this week’s data releases that could affect exchange rates. 

Pound/Euro up to €1.2655 

After a few weeks of decline in the GBP/EUR rate, this morning we saw it recover back close to 2 year highs. This is partly due to the crisis in Ukraine and the risks this presents to the EU recovery. 

The main reason why the Pound has risen against the Euro is weakness in the single currency. Low inflation means that the pressure is on the European Central Bank to provide further stimulus which could take the form of Quantitative Easing. They will announce whether they will do so at a meeting on Thursday. If they do announce stimulus, expect the Euro to weaken and Pound/Euro rates to rise. 

However, Analysts at Barclays said it was too soon for the ECB to announce new policy measures, given that the two most powerful policies announced in June are not yet deployed. So there are mixed views on whether anything will be announced on Thursday. If so, exchange rates will probably go up. If they don’t say anything, then the rate will probably drop. 

If you are looking for the best GBP/EUR or EUR/GBP rate, click here to send me a free enquiry. 

Pound/Dollar remains low at $1.66 

This again is partly due to the problems in Ukraine and the middle-east. When there is global uncertainty like there is at present, the Dollar gains strength and becomes more expensive to buy. 

 The US economy is also recovering well, and they have been winding up their stimulus programme. So like the UK, the USA is recovering and this is being reflected in the strength of the respective currencies. 

Summary 

The UK and US economies are doing well; the Dollar and Pound are strong as a result. The EU economy is doing badly, and they are likely to have to take measures to boost the economy. This is weakening the Euro. 

The geopolitical situation in Ukraine and the middle-east is also causing problems for the EU economy, and causing the safe haven US Dollar to gain in strength and become more expensive. All of the above means GBP/USD is low, GBP/EUR is at a 2 year high, and there are various economic releases (detailed below) this week that could keep the currency markets quite volatile. 

I can source exchange rates up to 5% better than available at banks and other currency brokers. Click here to send me a free no obligation enquiry to find out how I can help with your currency transfers. 

 *** I'm on holiday from tomorrow so my blog will next be updated on the 10th September ***

This week’s economic data releases. 

Monday 1st September – Today has been very quiet due to a market holiday in the United States. We did have slightly worse than expected UK Mortgage Approval and inflation numbers this morning, pulling the Pound slightly lower. 

Tuesday 2nd September – Overnight Australia will have released its latest interest rate decision which I expect will stay at 2.5%. The only UK data of note today is PMI construction released at 09:30am. US Markets open again today with figures showing the latest Construction and Manufacturing. 

Wednesday 3rd September – Further UK inflation figures today could affect the Pound. GBP/EUR could also be affected by the latest UK Retail Sales figures. Elsewhere we will see Australian growth figures, an interest rate decision from Canada, and the latest US Factory Order numbers. 

Thursday 4th September – As always for the first Thursday in the month, the EU and UK release their latest decision on interest rates. They will probably leave them as they are, but there is a chance as I outlined above that the EU could announce stimulus measures. Expect exchange rates to rise if this is the case. Over in the USA we have the latest Jobless numbers and Trade Balance figures. 

Friday 5th September – The only UK data of note is a consumer inflation report. The EU releases its latest GDP figures. Canada has some unemployment numbers. Over in the states we have earnings and non-farm payroll figures. These are often very different to forecast to expect a choppy day for Pound/Dollar rates. 

If you would like to get a quote, discuss which way the market is moving, or talk about how the above data could affect your exchange rate, click here to send me a free enquiry today.