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.
“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,”. 
