We’ve seen a spike in GBP/EUR rates during trading today, pushing up nearly 2 cents from 1.3650 to 1.3830 as the chart below shows: UK Growth revised up
The reason for the steady gain for the Pound was this morning’s figures that showed UK's economy grew at a faster pace than initially estimated last year. You can read a full outline of the improved growth figures here on the BBC website.I’m still of the view that Sterling will struggle to gain given the upcoming election uncertainty that’s likely to last until the end of May. Still, those with Sterling to convert to Euros should consider taking advantage of this spike in the markets. Do you need to convert currency at the best exchange rates?
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Monday 30th March 2015 Exchange rates have been a little more stable in the last week, with the Pound/Euro rate remaining in a 2 cent range between 1.3550 and 1.3750 as the chart below illustrates: Interest Rates and Exchange Rates
In my last post, I pointed out the Bank of England’s chief economist had warned interest rates may need to be cut to combat zero inflation. Well on Friday the day after my post, the governor Mark Carney said precisely the opposite, which is that the next move in interest rates will likely be up. Interest rate speculation has been a major driver of Sterling strength of late, and the comments on Friday caused the Pound to recover. It should be noted though that 2 of the main decision makers within the BoE seem to be at odds with regards to which way the rate will go, which is only going to create more uncertainty. The fact remains that if the numbers continue to show inflation so low, a cut is more likely and this could weaken the Pound. General Election and Exchange Rates
For the next month, the main news will be the UK election. The Pound is likely to weaken against other currencies over the next month due to the election uncertainty, and as I outlined in a recent post, this is because the result is so uncertain. This is likely to push the Pound lower in the coming weeks. I personally don't think we'll see things back at €1.40 any time soon. If you need to buy or sell Euros and would like to discuss your currency requirement with me and obtain a quotation, click here to send a free no obligation enquiry. On average the rates I provide are 3% better than banks and other financial institutions so you could save a significant amount of money. Click here to make a free enquiry What could affect exchange rates this week?
Below I’ve listed the scheduled releases for the coming week that I think may affect exchange rates. Remember that other things such as election uncertainty could also change rates at any time without warning. To discuss your currency requirement in more detail, or have a chat about which direction the exchange rate may go, click here to send a free enquiry today. Tuesday 31st March 2015 – Today we have the latest UK GDP forges, which are expected to show monthly and annual growth at 0.5% and 2.7% respectively. If the numbers are worse than this then expect the Pound to fall against other currencies. GBP/EUR could also be affected today by the EU inflation and Unemployment numbers. For those watching GBP/USD then US Consumer confidence figures at 3pm is something to watch out for. Wednesday 1st April – Today the main events for the currency markets will be inflation numbers from Europe and the UK. This is important as it indicates future interest rate movements, and so often affects exchange rates. Construction and Manufacturing numbers from the USA could affect GBP/USD Thursday 2nd April – Nothing major from the UK today, but there is an ECB meeting that looks at the economy and financial markets. It’s basically an assessment for the EU economy so this could affect Pound/Euro rates. Most other data is from the USA – Unemployment Jobless figures and Factory orders. Friday 3rd April – Very quiet today as most markets are closed for Good Friday. The USA remains open however and we have some important releases; Unemployment and Non-Farm Payrolls. These numbers often move GBP/USD rates as the figures are often quite different to what’s expected. Do you need to convert currency at the best exchange rates?
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Monday 23rd March 2015 The last week was an interesting one for the Pound, with exchange rates falling against other currencies. Against the Euro, the recent highs of €1.40+ now seem a distant memory, with the pair falling throughout the week, and the decline has continued this morning with rates dropping into the €1.36’s: Why has the Pound fallen against the Euro, and will it go back up?
There were two main reasons for last weeks continued drop in GBP/EUR rates. The first issue was a UK unemployment release. In the press it was hailed as good news, and indeed unemployment has fallen again. However what was important was that average earnings were actually quite a bit below forecast. This caused investors to sell the Pound and it duly weakened against other currencies. 
The other issue is the Bank of England’s chief economist warning that interest rates might have to be cut to combat low inflation. This is a far cry from this time last year, when the Pound was gaining due to speculation interest rates were going to rise. Things can change quickly in the currency markets, and further talk of cutting rates could bring the Pound lower. Bank of England warn against Strong Pound
In fact the strong Pound was discussed in the Bank of England's recent MPC meeting. This should be a worry for anyone hoping the exchange rate may recover back to €1.40. If the BoE are worried about a strong pound, they may take steps to weaken it to avoid it continuing to affect the low inflation numbers.There is also the UK election that’s likely to weigh heavily on the Pound in the coming weeks.
All in all I think those holding out for a return to €1.40 should think whether that's actually likely to happen within their time-frame. In the short to medium term securing something while the rate is still around 10 cents higher than back in January is probably a prudent move. Those selling Euros should use a ‘Stop Loss’ order to allow for further gains in their favour without being exposed to a downturn in the rate. If you need to buy or sell Euros and would like to discuss your currency requirement with me and obtain a quotation, click here to send a free no obligation enquiry. On average the rates I provide are 3% better than banks and other financial institutions so you could save a significant amount of money. What could affect exchange rates this week?
Below I’ve listed the scheduled releases for the coming week that I think may affect exchange rates. Remember that other things such as election uncertainty could also change rates at any time without warning. To discuss your currency requirement in more detail, or have a chat about which direction the exchange rate may go, click here to send a free enquiry today. Monday 23rd March 2015 – The only data of note today is a speech by European Central Bank (ECB) president Mario Draghi at 2pm this afternoon. Given they have just started their Quantitative Easing programme, markets will be watching his words closely. Anything deemed as positive could strengthen the Euro and pull GBP/EUR rates lower, and vice versa. We also have EU consumer confidence figures at 3pm this afternoon. Tuesday 24th March 2015 – Today is a busy one for UK data, with a rate of inflation numbers being released at 09:30am. I think there is a good chance the numbers will be quite low, which could weaken the Pound against other currencies. We also have Manufacturing numbers from Euro, and Inflation figures from the United States today. Wednesday 25th March 2015 – The only UK data today that might affect the Pound is Mortgage Approval numbers at 11am. The USA releases mortgage numbers too today, so GBP/USD could be affected. Thursday 26th March 2015 – UK Retail Sales are released at 09:30am, and are a good barometer of overall economic activity and so often affect the Pound. Elsewhere, the USA released Jobless numbers, Germany has a consumer confidence survey, and the Bank of Canada’s governor gives a speech.Friday 27th March 2015 – Today’s UK release is consumer confidence. Other data today is from the USA – a FED member gives a speech, the latest GDP numbers are released, inflation numbers are released and a consumer sentiment survey is out at 3pm, so lots that could affect Pound/Dollar rates. Do you need to convert currency at the best exchange rates?
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Tuesday 17th March 2015The spike of last week to €1.4255 appears to have been short lived, with the Pound falling during trading on both Monday and Tuesday, testing the €1.40 level before breaking below it. The drop continued today and at the time of writing the rate is a little above €1.39: Why has the rate fallen?
It’s to do with events in Europe, the USA and the UK. Over in the EU the recent QE programme has been well accepted, and this shows confidence that the Eurozone will sort out their issues and return to growth. This view was supported with economic data released this morning, showing better than expected numbers for consumer sentiment, inflation, and employment. The better numbers have given the Euro back some strength, dragging down the GBP/EUR rate. Over in the USA, there are nerves ahead the FED’s meeting tomorrow, halting the Dollar buying and in turn Euro selling. The Dollar has weakened a little after weaker than forecast manufacturing, industrial output and housing data. Here in the UK, its Budget day tomorrow, and the Conservatives last chance to convince voters they are the only choice to protect the UK economy. Tomorrow is going to be a very important one for the currency markets, so let’s take a closer look at what’s on the agenda. Wednesday a very important day for exchange rates
Tomorrow we will see much that could affect exchange rates. In the UK at 09:30am we have the latest Bank of England announcement, various unemployment numbers. Both of these could affect the Pound significantly better than expected figures could strengthen the Pound and vice versa. Later on we have the UK Budget Statement which is of more importance than usual, given there is a UK general election in less than 2 months. There could well be some surprises in this budget to woo voters ahead of the election, and given the economy is going to be the main weapon in the Conservatives arsenal, there is every chance we could see a significant effect on exchange rates for Sterling. Over in the United States at 6pm we have the Federal Reserve’s monthly statement. The markets are nervous ahead of this as analysts try to determine when the FED will raise interest rates. This is very important for exchange rates, as flows in and out of the Dollar can have knock on effects for the Pound, the Euro, and other major currencies. Do you want to get the best exchange rates?
Get in touch with me for a free no obligation consultation. I can provide you a rate, explain the various options you can consider to help you get the best rate, and explain how the above data releases could affect the currency rate you are interested in.
Wednesday 11th March 2015 I read today that a pretend €100.00 euro note from a toy shop was accepted by a business in a County Down town in Ireland to purchase a sandwich. In the real world, it almost seems that an actual €100 Euro note isn’t worth much more, given the pounding the single currency has taken in the last few days! Since Monday alone, the weakness in the single currency has meant that the Sterling/Euro rate has risen from €1.39 hitting a high of €1.4255 before dropping back away: Even today we’ve seen a rise from 1.4075 to 1.4250, before levelling back off to where we are now in the low €1.41’s. What an incredibly volatile few days. We are now seeing a new 7 year high on GBP/EUR, and in 2015 alone we’ve seen the exchange rate rise from €1.27 to the current highs above €1.40. To put this into real terms, a €300,000 property abroad is £25,000 cheaper than in January. Why has the Pound/Euro rate risen above €1.40?
The fact the rate has smashed through the 1.40 mark and sustained itself above that level has surprised both me and the markets in general. Usually a technical level like that would act as a barrier. Most analysts agree that it’s due to renewed fears over the Greek position in the Eurozone, and this coupled with the launch of quantitative easing by the European Central Bank (ECB) continued to put downward pressure on the single currency. The weakening effect of the ECB’s bond buying programme seems to be more than offsetting the uncertainty surrounding the upcoming general election. Against the US Dollar, the Euro is now languishing at a 12 year low! Which way will Pound/Euro rates move now?
As I’ve said above it’s a surprise that rates broke through €1.40, however now they have it’s likely to stay above that level as it will be acting as a level of support. I now think that while the general election could still weaken the Pound, the risks of this are now offset by Euro zone uncertainty. Some forecasts I’ve read suggest €1.45+ later this year, but of course exchange rates depend on market sentiment, and this in turn will be driven by ongoing events in Europe. If you need to buy or sell Euros, don’t just watch the rate hoping things will go your way. I can help you achieve much better rates than the bank, and also have various tools to help you avoid unnecessary drops in the rate, such as Stop Loss orders, Limit Orders and Forward contracts. If you have Euros to buy or sell, then click here to send me a free no obligation enquiry today to get a quote, and find out how I can help. Pound/Dollar rates drop below $1.50
In stark contrast to GBP/EUR rates, the Pound/Dollar rate has tumbled below $1.50 today. This is partly due to the Euro sell off. Investors dumping the Euro have been buying the US Dollar, which has given the greenback some strength. Will it keep dropping? I think so. The US economy is performing very well, and they are likely to raise interest rates this year. This will strengthen the currency, and while Europe suffers, the Dollar will continue to benefit. So I think we’ll see GBP/USD down in the low $1.40’s this year. Do you need to convert currency at the best exchange rates?
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Tuesday 10th March 2015 A very brief update this afternoon to say the Pound/Euro rate has risen by almost 2 cents today, pushing through the €1.40 barrier and onwards towards €1.41 – a fresh 7 year high and the best rates have been now since the end of 2007: The pound has been gaining all day after the European Central Bank (ECB) began its government bond buying programme earlier this week. This also after the head of the eurozone finance ministers' group called on Greece to "stop wasting time" and engage in serious talks on reform. I’ll post a more detailed update tomorrow afternoon, as my time today has been spent on the trading floor assisting clients with Euro purchases. We’re offering trading levels of €1.40+ today and needless to say we have been very busy indeed performing a record number of GBP/EUR trades. Do you need to convert currency at the best exchange rates?
If you have a currency transaction to perform, would like a quote, or to simply discuss the market or anything I’ve covered above, contact me for a free no obligation consultation by clicking below. Click here to send a free enquiry.
Friday 6th March 2015In the last few days the GBP/EUR exchange rate has climbed further, today briefly going through the €1.39 level before dropping back away. As we’ll see in a moment there are 2 reasons for the gains; weakness in the Euro caused by the European Central Bank (ECB) Quantitative Easing programme, and better than expected US Jobs data driving investment from the Euro, and into the US Dollar. Here’s how the GBP/EUR rate has moved this week: ECB Quantitative Easing
This week the European Central Bank (ECB) confirmed it will start its €1.1 trillion Quantitative Easing programme, following the UK and USA that did the same a number of years ago. The aim is to spur an economic recovery by printing money and buying government backed assets. They have done this despite raising their growth forecasts. They stated yesterday that they would continue QE even if the economy showed signs of recovery. This weakened the Euro further, pushing the GBP/EUR rate above €1.38 in trading on Thursday. Effectively the ECB’s president Mario Draghi has got what he wanted – a much weaker Euro which makes EU goods and services cheaper. The Euro is now at a near 8 year low against the Pound, and a 12 year low against the US Dollar. However if QE has the desired effect, which it has seemed to do in Britain and America, it could start lending some support back to the single currency. US jobs data causes GBP/USD to drop, and GBP/EUR to rise
Figures today showed that the US economy added 295,000 jobs in February, which is much higher than had been expected. It’s also the 12th month in a row the economy added more than 200,000 jobs, the longest such run since 1994. The stronger-than-expected jobs figure strengthened the US Dollar and caused GBP/EUR rates to drop by almost 2 cents:The flow of investment into the Dollar also hurt the Euro, which weakened further and briefly pushed GBP/EUR rates above €1.39. Do you need to convert currency at the best exchange rates?
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Tuesday 3rd March 2015At 3:30am this morning the Reserve Bank of Australia announced its decision on interest rates. The consensus was that they would cut rates to 2.00%, and that had already been priced into the market as it was widely expected. However, the RBA decided to leave rates on hold at 2.25%. Australian Inflation had fallen to a 6 year low, and the lack of Chinese demand had meant everyone thought a rate cut was on the cards in order to boost their cooling economy. It looks however like they are hoping the rate cut in China will boost demand. What does this mean for the GBP/AUD exchange rate?
It caused the Australian Dollar to gain strength, and as you can see from the chart below the GBP/AUD rate fell from $1.98 to the low $1.96’s. You can see the immediate drop the moment the decision was announced: What's happening with Sterling/Euro rates?
The Sterling to Euro exchange rate over the last week has continued to strengthen, touching €1.38 over the weekend before dropping back into the €1.37’s. As the European Central Bank starts it’s Quantitative Easing programme in earnest, this and the ongoing saga in Greece continues to drive this currency pair. The negotiations over Greece’s debt seem to be making slow progress, and I think as and when a full agreement is put in place, this could start to give the Euro back some strength. We also have the election coming up in a few months which could also cause uncertainty and weakness for Sterling. For the moment however, 7 year highs are available for those that need to buy Euros. Get a quote and see how much you could save
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