Pound/Euro hits €1.35 forecast for 2015

Wednesday 28th January 2015 
In my last post at the end of last week I explained that the European Central Bank (ECB) announcement of a Quantitative Easing (QE programme) had weakened the Euro and pushed the GBP/EUR exchange rate to €1.32. 

I’ve been away from the trading floor on holiday for a few days, but the currency markets have continued to show volatility, with the Pound/Euro rate climbing and briefly touching an incredible new 7 year high of €1.3500 before dropping back away due to growing uncertainty over what the result of the Greek election means for the EU economy.

Greek election causes Euro to weaken further 

At the weekend the Greek Syriza party came to power, and this has caused significant weakness in the Eurozone. You can read a good overview on what’s been happening here on the BBC website.

As far as exchange rates are concerned, the news has caused the Euro to weaken and become cheaper to buy. At one point we briefly saw Sterling/Euro rates hit €1.35 before dropping back to around €1.33 / €1.34. 

Effectively the Syriza party have won because they succeeded in selling an illusion that Greece can stop paying the debt, and still stay in the euro. This is impossible. It’s one or the other, and either option will have further implications to the Euro economy. The Greek people don't seem desperately grateful for the €240 billion they have received in bailouts and are trying to renegotiate their debt. Unless compromise is made there is a real chance Greece could leave the Eurozone, and abandon the Euro to return to the drachma. This would cause massive disruption. There will a government default, corporate defaults and bank defaults. 

In essence it is the uncertainty over what will happen that is causing Euro weakness, and this has presented great buying opportunities for those that need Euros. Rates have climbed to their best in 7 years. To put the recent gains into perspective, this month alone a €250,000 property in Europe is nearly £9000.00 cheaper due to the rise in exchange rates.

Will rates climb higher or drop back towards 1.30? 

It’s impossible to predict exchange rates. However if you need to buy Euros, do consider taking advantage of what are the best rates in 7 years. It may go higher of course, but equally given it has risen by 5 cents already this year alone, it could easily fall back. If you want to hold our for more, then you should have a 'stop loss' in place to cover you should the market go the other way. Get in touch with me today to discuss how these type of contracts work.

I think all the bad news surrounding the Euro has now happened and is therefore reflected in the current rate of exchange. Indeed many in the market believe that a Greek exit from the Eurozone could actually be a good thing for the Euro, so should this become more likely, we may actually see GBP/EUR rates fall. 

It’s also worth noting the Pound isn’t particularly strong. Interest rates are now not l expected to go up for some time and this could hold the Pound back. Also, recently figures showed the best annual UK growth for years, however the rate of growth slowed significantly at the end of 2014, so the Pound is actually a little on the back foot. It's only weakness in the Euro that has caused the gains in the rate, and not any particular strength for Sterling.

Do you have an upcoming currency transaction? 

Whether you’re buying Euros with Sterling, or converting Dollars back to Pounds, whatever your currency needs, I can provide a very competitive quote to compare with your bank or existing broker. I also offer free consultations to discuss which way the market is moving, to help you decide when to fix your exchange rate. In addition, I can explain the various tools and options you can consider to make sure you don’t get lower exchange rate than necessary. 

So if you need to convert one currency to another and are looking for the best exchange rates, click below to make a free enquiry with me today, and take the first step to making the most of your currency. 

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Pound/Euro hits €1.32 after QE announced by ECB

Thursday 22nd January 2015 
The European Central Bank (ECB) today announced its Quantitative Easing (QE) package, outlining over €1tn of stimulus for the economy. It’s been the main driver of exchange rates in recent weeks and today it became a reality. You can read a very good outline of the measures and how they work here on the BBC website. 

What has it meant for exchange rates? 

The Euro has weakened as markets expected it would. As you can see from the chart below, Pound/Euro rates have risen to a new 7 year high of €1.32, so fantastic rates for Euro buyers: 

Will it go higher or drop back down? 

I can’t see rates going that much higher, and given the GBP/EUR cross is now comfortably above the €1.30 benchmark, I think it will stay at this level. For this reason anyone that needs to buy Euro soon should consider fixing a rate while it’s so good. If you want to gamble on the hope of higher rates, then you should place a ‘Stop Loss’ order to protect against rates going back down. 

Euro sellers don’t have much on the horizon that could improve things. This weekend’s election could cause further uncertainty for the beleaguered Eurozone, and so if you need to sell Euros, consider cutting your losses and getting something done sooner rather than later. 

Getting the best exchange rates. 

If you have a currency requirement for any major international currency, and need to have funds wired between bank accounts, I can help you achieve excellent rates of exchange. Whether you are buying or selling property abroad, or are a business that sends and receives payments in foreign currencies, I can save you up to 5% on the exchange rate, which is considerable when moving a large sum. 

Even if you already use a currency broker, it costs nothing to compare the rates that I can offer. 

Click here to send me a free enquiry today and see how much you could save.

Pound/Euro exchange rates drop back below €1.30

Wednesday 21st January 2015
Today we have seen economic data that has pushed the GBP/EUR rate back below the key €1.30 level. Let’s take a look at why the Pound has fallen against the Euro, and which way the currency pair may move in the coming weeks. 

UK Unemployment and Interest Rates 

At 09:30am this morning the latest UK Unemployment figures were released, showing a drop to just less than 2 million, which is the lowest level for more than six years. However there are signals that growth in employment may be easing, as this drop is the smallest since the three months to September 2013. 

Also this morning we saw the Bank of England keep interest rates on hold, as expected, but what was surprising is that all 9 members voted to keep the status quo. Martin Weale and Ian McCafferty, who since August had called for a hike in rates, seem to have changed their mind. As all 9 members voted, it now looks like interest rates won’t be going up in the UK until mid-2016, and as a result the Pound has weakened off. 

ECB to conduct QE 

2 European Central Bank (ECB) officials today said that they will indeed pursue a Quantitative Easing programme, to the tune of €50bn per month for the next 2 years. The actual announcement is tomorrow and is widely expected to happen, but today’s comments have caused the Euro to strengthen, and coupled with the UK news I mentioned earlier, pushed GBP/EUR rates below €1.30: 

So why has the Euro strengthened if QE is going to happen? 

The market had already priced in the expectation of QE. The actual announcement however goes further than analysts had been expecting, as most thought that a 1 year programme would be announced. As today’s comments hint at a much longer QE programme, it seems that the market has taken this as a positive sign as the Euro has gained strength across the board this afternoon. It could also be the case that the expectation had been overly priced into the market and now the reality is here, there has been a correction and the 7 year GBP/EUR high seems to have been short lived. 

What next for Pound/Euro? 

We could see further movements tomorrow when the markets react to the actual announcement, however while in general I expect the Pound to keep outperforming the weakening Euro, I can’t see any further significant gains given most of Sterling’s recent strength was on the expectation of interest rates going up , which is now unlikely to happen soon. 

 So with the GBP/EUR rate at the key €1.30 level, it’s a good time for those that need to buy or sell Euros to take stock of their requirement and decide when to fix a rate. Click here to send me a free no obligation enquiry today, and I can get in touch to provide you a quote on the rates I can provide, and discuss the options you have to protect against the rate moving against you. 

Click here to send a free no obligation enquiry today.

ECB key to GBP/EUR forecast for 2015

Tuesday 20th January 2015 
Pound/Euro rates have risen by a cent today, and at the time of writing GBP/EUR remains stable around the €1.31 level, which is the highest rate to buy Euros since March 2008: 

Will Pound/Euro rates climb or fall? 

We’ve seen a significant rise in rates in the last few weeks, pushing GBP/EUR in particular to the highest we’ve seen in 7 years. Being able to trade at levels above €1.30 is excellent news. The main question now is whether rates will drop back below this level, or perhaps even go higher still. 

The next few days will be key to this. Tomorrow we have a Bank of England decision on interest rates, and the latest Unemployment figures. I think both of these will be a non-event and won’t have much of an impact. 

Of much more significance will be Thursday’s announcement by the European Central Bank (ECB), when they’ll decide whether they will start a Quantitative Easing programme where funds will be created to spur an economic recovery. 

If they do, it will likely weaken the euro. As this has been progressively priced into the market, we’ve seen the euro lose value over recent weeks which is the main reason rates are currently so high. Because it is widely expected, for the most part it is already priced into the rate. If QE is announced however it may not actually cause further gains. 

However if there’s no announcement, expect GBP/EUR to fall away as the expectation has already been partially priced into rates. Furthermore, in a week’s time, the Greek election will cause uncertainty for the Eurozone, so there is much on the horizon that could significantly harm the euro. 

If you’re buying or selling Euros, what should you do? 

In the first instance you should discuss your currency requirement with me, to talk about your specific needs and discuss what is moving the market. I can also explain the various options you have at your disposal. 

For example, euro sellers should consider buying forwards to protect against the rate getting worse. Euro buyers should consider a stop loss order, to protect against the market dropping should QE not be announced. It would be a shame to miss out on a 7 year high by holding out for a small gain. 

Whatever your currency requirement, if you’re keen on achieve the best possible rates, contact me today by clicking here to make a free enquiry.

30% Swing on exchange rates this morning! EURCHF GBPEUR

Thursday 15th January 2015 
We have seen an incredibly volatile market this morning, caused by a surprise statement by the Swiss National Bank. More on that in a moment, but to outline how choppy things have been this morning, in just 20 minutes we have seen Sterling/Euro rates go from €1.29, all the way to €1.31 before dropping back and settling below the key €1.30 level. A 2 cent move in such a short time is very unusual:

What’s even more unusual, is the Euro to Swiss Franc (EUR/CHF) rate that has crashed from 1.20, falling all the way to 0.75 before settling at around 1.04 at the time of writing. That’s a fluctuation of 35% in 20 minutes! This is probably the biggest move on any major currency pair I've ever seen. So what's been going on?

Why are the currency markets so volatile today? 

Switzerland, that’s why. The Swiss National Bank (SNB) this morning surprises as all by ending their peg to the Euro, which has been set at 1.20 for 3 years. They also slashed their interest rates. The SNB were worried about their currency becoming too strong, and so in order to keep this peg to the Euro, the SNB sold CHF and bought EUR as necessary to keep the rate at this level. The ending of the peg also ends this constant Euro buying, and the market has corrected itself accordingly.

This caused the Euro to weaken significantly, which is why we saw the GBP/EUR rate shoot to 1.31 and the EUR/CHF rate plummet by over 30%. This all happened between 9.30am and 10am this morning. 

Things have now stabilised slightly and GBP/EUR is settled at just below €1.30, and EUR/CHF around 1.04. This really demonstrates how things can change significantly in a very small amount of time. Those clients that had accounts with us and Limit Orders in place have managed to take advantage of a very short-lived spike in the market. 

Do you need to get the best exchange rates? 

Get in touch with me today by making a free enquiry here. I can provide a free consultation on what’s happening with exchange rates, and provide you a quote on the currency you need. I can achieve rates very close indeed to the published mid-market rates, and these can be up to 5% better than banks. 

This morning we have placed trades at €1.30 and above, whereas your bank would have likely offered rates around 1.25. This can save you a huge amount when converting large sums. 

Click here to find out how much you could save.

Sterling rises by over a cent after inflation figures released

Tuesday 13th January 2015 
The Pound has risen well against both the Euro and US Dollar today, pushing GBP/EUR up 1 cent to close to €1.29, and GBP/USD also rose a cent to $1.5165. The rise in exchange rates comes after figures this morning showed that inflation in the UK has fallen to 0.5%, the lowest level on record. 

Why has the Pound risen on the low inflation figures?

The low inflation means that interest rates are very likely to stay on hold for some time to come. Usually this would weaken a currency, so why have the low inflation numbers caused the Pound to rise? 

It’s because the fall is seen as generally good news for the UK economy. Recent figures already indicated that interest rates are likely to stay on hold this year, so today’s figures haven’t changed that view, and that’s why the Pound didn’t fall. What the figures do mean is that spending power in the UK has increased, and this in turn should spur the economy as a whole as people have more disposable income, so things like Retail Sales should go up as people feel more confident in the UK’s economic recovery. 

It should be noted however that the GBP/EUR rate in particular keeps getting to these levels, before dropping back off again. This trend has repeated itself many times over the last 12 months. Those with Euros to buy should therefore consider taking advantage of the current levels, which are after all around the best they have been in over 6 years. 

Those converting Euros to Pounds however should be cautious, as any further indication of monetary stimulus in the Eurozone could well weaken the Euros buying power. 

Getting the best possible exchange rates.

If you have a currency transaction to perform over the next 6 months, get in touch with my by completing the enquiry form here. I can provide you a very competitive quote, discuss the current state of exchange rates, and run over the various options you can consider to ensure you make the most of your currency. 

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

How could General Election affect exchange rates?

Friday 9th January 2015 
Where do things stand with exchange rates? Pound/Euro is hovering around its comfortable level of €1.28 and Pound/Dollar has stopped falling, for now, and sits around $1.5150. Against other major currencies Sterling is actually quite weak have fallen against most currencies. It’s only weakness in the Euro that’s keeping GBP/EUR supported at the current near 6 year high. 

The Pound could struggle this year for several reasons which I’ll look at today. Remember that if you want to achieve the best exchange rates, click here to send me a free enquiry, get a quote, and find out more about the commercial exchange rates I can offer.

• How General Election could affect Sterling exchange rates 
• When will interest rate go up, and will the change Pound/Euro 
• QE in Europe and will this make GBP/EUR rates go up 
• Pound/Dollar will it drop below $1.50 

Election uncertainty could weaken the Pound 

Political uncertainty is one key thing that can weaken a currency, and this year’s election is one of the most uncertain in a generation. Whatever happens it’s going to be very rare indeed. There has only been 2 occasions in the ‘50s when a government in power for more than a few years has increased its share of the vote, and Cameron needs exactly this to win. For Miliband to come back after Labours defeat last time and win a majority has only happened 3 times in the last 100 years, so that’s also unlikely. The 3rd option is a coalition; the last time that happened on two consecutive occasions was over 100 years ago. So any of the possible outcomes will be almost unprecedented. 

This means Sterling could come under pressure this year and fail to move higher, and could keep exchange rates in check. 

Interest Rates may not rise this year 

The Bank of England again kept interest rates at 0.5% yesterday, and a rise in interest rates in 2015 is looking less and less likely, after inflation levels have fallen recently. Last year there was much speculation rates would be going up, but it now seems the UK’s recovery has proved less robust than hoped, so hopes of a rate rise seem to have evapourated. HSBC for example have now pushed back its forecast for the next rate hike to 2016 due to political uncertainty, weaker inflation and an economic slowdown. 

So this along with the election is also likely to keep the Pound from rising. 

ECB closer to doing Quantitative Easing 

One thing that could move GBP/EUR higher however is the EU that could be soon embarking on a QE programme. They have miserable growth and little improvement is on the horizon and doing nothing is not an option. The ECB president is dropping stronger and stronger hints that they will embark on a stimulus programme. Nobody knows if it will work, but three countries that have embarked on it in the past (UK, USA & Japan) all saw their currency weaken. This is partly priced into the value of the Euro and is the one thing that is stopping Pound/Euro dropping away. 

If you need to buy or sell Euros at the best rates, would like a quote, or want to find out more about which way the exchange rate may move, click here to send me a free enquiry today. 

Pound/Dollar rate stops falling, for now 

The sharp decline in GBP/USD has also been halted. The rate dropped into the $1.50’s but has now recovered back to $1.5150. however due to the reasons above, and the fact the United States are likely to push up their interest rates soon, it could drop below the $1.50 mark later this year. 

Do you want the best exchange rates for conversion between any major international currency?

click here for a free consultation on how we can help you. 

Pound continues to fall against Euro and US Dollar

Tuesday 6th January 2015 
Sterling initially had a good start to 2015 against the Euro, hitting highs of over €1.29 on Friday. As has been the case of late however, when it tested these highs it quickly dropped back away again. Against the US Dollar, the Pound has fallen to its lowest in well over a year. Let’s take a more detailed look at what’s been happening. 

Sterling/Euro 

The Euro is fundamentally weak at the moment, and this is reflected in its value. Over the New Year, comments from the European Central Bank president Mario Draghi indicate they are getting closer to a Quantitative Easing stimulus programme. This weakened the single currency and made it cheaper to buy. There are also the Greek elections later this month, with a strong chance the anti EU party could win. This also raises questions about a possible Greek exit from the Eurozone, and this is also keeping the Euro on the back foot, pushing GBP/EUR rates to above €1.29 last week: 

  
The gains were short lived as is often the case. With the New Year, came concerns over the Pound, and Sterling has weakened in the first few days trading. Much of this is probably due to the political uncertainty the upcoming election will generate, with the result quite open at the moment. This coupled with the fact that UK interest rates aren’t likely to rise for at least 6 months mean the Pound could be facing further pressure in the coming weeks. 


Longer term, I expect Pound/Euro to break the €1.30 barrier, probably in the latter part of this year. In the shorter to medium term however, those that need to buy or sell Euros should weigh up their options now, as a small movement in the wrong direction could cost you a significant sum. If you need to buy or sell Euros in the next 3 to 6 months, contact me today to find out what could happen, what your options are, and obtain a quote on the rates that I can offer you. 

Sterling/Dollar 

The downward trend for cable continues. The rate fell to $1.53 yesterday, and today has fallen below the $1.52 mark which is the lowest it’s been since August 2013. The main reason for this is Dollar strength, caused by uncertainty in the global oil markets, unrest in Ukraine and the Middle East, and a robust US economy that is going from strength to strength. The drop could continue, but I think the rate will struggle to drop below the $1.50 mark as this is a key technical level. 

If you need to buy or sell Dollars, would like a quote or would simply like to chat about which way the exchange rate is moving, click here for a free consultation. 

Click here if you are looking to achieve the most competitive exchange rates possible.