Wednesday 29th April 2014 In my last post a week ago, I talked about the Sterling/Euro rate breaking through the €1.40 level. As I predicted, this spike to a near 8 year high was short lived, and today the rate has fallen from 1.40 down to €1.3850 as you can see from the chart below:
Why has the Pound/Euro rate fallen?
Simply put, the Eurozone economy is starting to perform well. Euro and German bond yields rose to their highest level in several weeks today, after data showed bank lending has stopped falling, and consumer inflation expectations have risen. As the European economist at RBC Capital Market has said, "Happier days are on the cards”. He added that "The continued improvement in credit supply conditions bodes well for the sustainability of the euro area recovery overall." So it seems that the latest figures show that the European Central Bank's (ECB) Quantitative Easing programme is starting to have a good effect, much as stimulus programmes in the UK and USA have done. Also, there has been positive news on Greece. They are expected to present legislation to lenders to show it is serious in making efforts to repay it’s debts, and as a result the Euro has gained strength and become more expensive to buy. If you need to buy or sell Euros, would like a quote or to discuss whether the Pound/Euro rate is likely to go up or down in the coming weeks or months, send me a free enquiry today by clicking here. Pound/Dollar rates rise to nearly $1.55
In contrast to the GBP/EUR rate dropping, GBP/USD has risen nicely in the last few weeks, rising from $1.46 to $1.55:
This is because today figures showed that the US Economy is growing much slower than expected. In turn this means that interest rates aren’t likely to rise as quickly as previously thought, and as a result the US Dollar has lost value and become more expensive to buy. Which way will Pound/Euro and Pound/Dollar exchange rates move next?
While it’s impossible to predict, I think that now the EU economy is looking more robust, focus will turn to the UK election, so we could well see Pound /Euro rates continue to fall. That assumes of course that Greece makes its upcoming €1bn debt repayments. If they don’t, a rise back to €1.40 could be on the cards. Pound/Dollar rates on the other hand are likely to keep dropping. I think this spike above $1.50 will be short lived and expect the rate to be back down in the €1.40’s before long. Getting the best exchange rates
If you need to convert £5k+ from one currency to another, then it would be prudent to get in touch with me for a quotation. I can source exceptional rates of exchange for any major currency conversion on a bank to bank basis. If you would like a quote or to find out more about the service I offer, click below to send me a free no obligation enquiry. I regret I cannot help with cash or holiday funds, and can only assist those looking to have currency wired to a bank account. Click here to send me a free no obligation enquiry today.
Wednesday 22nd April 2015As you can see from the chart below, today we have seen the GBP/EUR rate climb above the €1.40 mark, after the Bank of England released its latest minutes confirming interest rates will remain on hold at 0.5%. This is the best it's been in over a month, and only a few cents away from an 8 year high. Bank of England minutes
Today the Bank of England (BoE) confirmed they would be keeping interest rates at the record low again. This wasn’t a surprise, but the minutes to the meeting were quite hawkish, and it was these comments that have caused the Pound to rise. 2 of the members said their decision was finely balanced, and after some recent uncertainty which way rates will go in the coming months, it is now quite certain that the next move will be up. This speculation of higher interest rates, probably in early 2016, boosted the Pound due to the higher return that may be on offer for investors. Consequently we have seen Sterling/Euro break the 1.40 level, and not far at all from the best we’ve seen in 8 years. (Those needing to buy Euros should consider taking advantage of these levels that may not last for long.) The strengthening Pound also pushed higher against the US Dollar, breaking back above the $1.50 level. Greek worries keeping Euro week
With an election only a few weeks away, it’s surprising the Pound is holding on against the Euro. Most expected it to drop away, however the Euro is very week indeed due to uncertainty over Greece. A Greek exit from the euro could still happen as they on course to run out of money and be unable to make their loan payments net month. There is still faith that European policymakers will avert that scenario, but while no bailout deal is in place, expect the Euro to remain cheap to purchase. Getting the best exchange rates
If you need to convert £5k+ from one currency to another, then it would be prudent to get in touch with me for a quotation. I can source exceptional rates of exchange for any major currency conversion on a bank to bank basis. If you would like a quote or to fund out more about the service I offer, click below to send me a free no obligation enquiry. I regret I cannot help with cash or holiday funds, and can only assist those looking to have currency wired to a bank account. Click here to send me a free no obligation enquiry today.
Monday 20th April 2015 Good morning. Before we look at what has been happening with exchange rates this week, I would like to take a moment to thank both regular and new visitors to my site for their support. Today my blog logged its 1 millionth unique visitor! Readers that chose to send an enquiry to find out more about the services I offer have now converted over £35m, at rates up to 3% better than banks can offer meaning I have saved my clients over £1 million pounds to date, which is something I am very proud of. If you would like to see how I can help with your exchange, you can send me a free enquiry by clicking here. What has been happening with the Pound/Euro rate?
After quite a bit of volatility this year that have seen GBP/EUR rates between a range of €1.25 and €1.42, the last week has been relatively stable. The exchange rate has remained within a 1 cent range between €1.3850 and €1.3950: Will Pound/Euro rates drop as the election approaches?
Well that’s what many analysts have been saying for several weeks, and I agreed that it was likely the rate would drop. This was based on what happened as the Scottish referendum last year created similar uncertainty. However I’m starting to think it’s not a given the same thing will happen. The Scottish vote seemed to catch the markets by surprise, but this time most investors have put plans in place well in advance of the election, which means we may not see the Sterling sell off that would cause the Pound to fall. That would explain why rates have remained supported around the 1.39 mark despite a hung parliament looking very likely. Indeed with the UK economic recovery being praised by the IMF chief we could well see the Pound hang on to it’s relative strength. Also, the Euro remains very week indeed especially with the ECB President Mario Draghi making clear last week that quantitative easing would last until September 2016, then there is every chance we may actually see rates remain around these levels and possibly even rise higher. What should you do if you need to buy or sell Euros?
Of course there is no way to predict which way the rate will go, so what you should do is contact me to discuss the various options you could consider. For example if you need to buy Euros, then you can place a ‘Stop Loss’ order to fix a rate should it drop below a pre-agreed level, for example €1.35. In this way you’re not exposed to a huge fall in the rate should the election cause Sterling to plummet, but you're still able to take advantage of higher rates if we see things get back to the €1.40 level. This is just one example of the type of thing I can offer, but of course every particular currency requirement is different. You may need to convert Euros to Sterling following a property sale for example. Whatever currency you need to buy or sell, why not get in touch to discuss the options available to you, and get a quote to compare with your bank or existing broker. You can do this for free without any obligation by sending me an enquiry here. I look forward to assisting anyone that needs to convert £5k+ on a bank to bank transfer basis. I’m afraid I can’t help with cash or holiday money. Alastair Archbold
Monday 13th April 2015 Pound/Dollar rates hit 5 year low
The US Dollar has been gaining more and more strength recently, and has therefore become more expensive to purchase. First thing this morning the GBP/USD rate was as low as 1.4569 which is the lowest in 5 years. It’s climbed a little during trading to 1.4645. Still a far cry from the highs of $1.72 we saw last summer! The reason is the US economy is performing very well, and it’s likely they will be the first major western economy to raise interest rates. Also, global uncertainty is driving investment into the ‘safe haven’ US Dollar, which also strengthens it. This is great news for anyone looking to convert Dollars to Pounds. Those needing Dollars however should note that many forecasts think the rate will continue to slide this year.
Sterling/Euro remains supported at €1.38
The strength of the Dollar is also causing weakness in the Euro. Issues over Greece means investors are moving from Euro to Dollar, which is weakening the single currency and keeping GBP/EUR rates supported above the €1.38 level. I’m actually surprised the rate is holding at these levels, and I’m still of the view that as the election draws closer, Sterling will start to lose value against other currencies. Only on Friday figures showed weaker-than-expected industrial data, and the rising risk of prolonged political uncertainty after a tight British election next month is already dragging the Pound down against other currencies. Remember, the current high level is Euro weakness, not any fundamental strength in the Pound! If you are looking for the best exchange rates and would like a quote on your exchange, click here to send me a free no obligation 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 14th April 2015 – Quite an important day for the UK as we have the latest inflation numbers. Recent figures show the UK headed towards deflation, which could in turn mean interest rates going down. If that’s the case, the Pound could weaken. In Europe the only data of note is Industrial Production at 10am. Later in the afternoon in the USA we see the latest Retail Sales numbers. These are a good overall indicator of economic activity and so GBP/USD rates could be affected. Wednesday 15th April 2015 – Nothing from the UK today, but plenty from the EU that could move GBP/EUR rates. Germany releases a host if inflation numbers at 7am, and at 12:45pm we have the latest decision from Europe in interest rates. They are unlikely to change the rate, but at 13:30pm they give a press conference, and comments made often cause volatility for the Pound/Euro rate. Elsewhere, Canada also announces interest rates, and the USA has Industrial production figures. Thursday 16th April 2015 – Another quiet day for the UK. The only data of note today is in Australia where we see the latest employment figures, and the USA which also releases jobs data. Staying in the USA, we also have a speech by a FED member which could affect the Dollar. Friday 17th April 2015 – After a quiet few days, this could be an important one for Sterling. At 09:30am we have the latest employment numbers from the UK. This can often affect the Pound so expect a volatile morning for GBP exchange rates. Europe, Canada and the USA all release inflation numbers today too, so GBP/CAD, GBP/EUR and GBP/USD could all change today. 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.
Wednesday 8th April 2015 Since the Easter break, Pound/Euro rates have seen a very decent recovery, rising from 1.3550 to 1.3800 today, as you can see from the chart below: Before the Easter weekend, the Pound had come under pressure due to political uncertainty in the run up to the general election. This had pulled rates down from 1.38 to the 1.35’s. The reason it has gained and recovered these losses is due to better than expected UK economic data. Why has the Pound gone up against the Euro?
This week we have seen figures that show activity in the UK's services sector grew at the fastest pace in more than 6 months. We have also seen the Confederation of British Industry (CBI) forecast UK economic of 0.7% in the three months to March which is better than it has been. We also recently saw the Office for National Statistics (ONS) revise economic growth upwards. We’ll have to wait a few more weeks however before the first official estimate of the UK's economic growth for this year. Will Sterling go up or down in the next few weeks?
All in all the numbers are good, and this has given renewed optimism for the Pound. I still don’t think this will be sustained. We saw a very similar trend a week ago when rates rose to 1.38, but he gains were short lived. As you can also see form the chart above, the rate quickly dropped back 2 cents and the reasons for this remain – political uncertainty on the run up to the general election. In addition to election jitters, Sterling could come under pressure this week due to a statement from the Bank of England. They don’t want the Pound to be this strong against the Euro and we may see comments designed to weaken Sterling. Also watch out for Friday when the latest Industrial and Manufacturing production figures are released. The numbers are expected to show growth of 0.3% and 0.4% respectively. If the actual numbers are lower than this Sterling will fall against other currencies and vice versa. Also on Friday a GDP estimate could affect the Pound. 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.
Thursday 2nd April 2015 Since my post a few days ago, we have seen the general downward trend in Sterling/Euro rates resume, falling from €1.38+ to €1.36 in the last couple of days. As the chart below shows, in the last 3 weeks alone the Pound has lost nearly 5% against the Euro: Economic data from the UK has actually been quite good! Growth has been revised up, manufacturing has picked up, and the UK is now the fastest growing major western economy. Despite this, it looks like the Pound is going to drop further against the Euro. The main reason as I’ve touched on a few times in the last few weeks is the general election. The latest polls suggest a hung parliament and it was this that was the catalyst for the drop earlier in the week. If we cast our minds back to last year’s Scottish referendum, the uncertainty that created pulled Sterling significantly lower against other currencies. The election is likely to have the same effect, and it could potentially be a much greater one. Tonight will also be interesting with the televised debate for 7 leaders, and could also cause the pound to come under pressure. Nearly every forecast I’m reading suggests a drop. As an overall majority is highly unlikely, this uncertainty is likely to continue for at least several weeks after the election, which means a very volatile couple of months for the Pound. When is the best time to buy Euros?
If you have Euros to buy in the next 6 months, then you’re still doing very well. Yes the rate has dropped from the recent 8 year high, but the rate is still very good indeed and around 10 cents higher than the start of the year. If you need to buy Euros then you can lock in the current rate for up to 2 years by lodging 10% of the Sterling you want to convert. You are then protected against further declines in the rate and know exactly where you are. When should you sell Euros back to Pounds?
If you need to convert funds back to Pounds, perhaps from a property sale overseas, then there is every chance the rate could get better for you as the Pound gets weaker. You should just hope this is the case though. You can utilise what’s called a Stop Loss order, which means if the market moves against you your rate is fixed at a pre-agreed level, while still allowing you to take advantage of any gains in the market. Getting the best Exchange rates
I work for one of the UK’s leading Foreign Exchange Brokerages; one of the few to be granted an e-money licence from the FCA, which gives you significantly more protection than a firm that is simply authorised by them. Clients that have contacted me directly from this blog over the last 6 years have now converted over £350m Sterling, and saved around 2 to 3% compared to their bank/existing broker. 
I can trade over 35 currency pairs on a bank to bank basis for both private and business clients. We also have segregated client accounts, so you can trade with us safe in the knowledge your funds are very safe and secure. If you need the best rates, are converting over £5k and needs funds wired to a bank account, then it is certainly worth getting in touch to see what rate I can offer you. It costs nothing to get in touch for a quote and you will likely be pleasantly surprised how much I can save you by getting you a better rate. I can also talk over various options and strategies you can consider so you can take control over your requirement. Don’t simply sit back and hope an exchange rate will get to a particular level; hope is not a reliable economic tool. Take advantage of my 15 years of experience in Financial Services today. We will be closed over the Bank Holiday weekend, and will be back in action on Tuesday. Enjoy the break!
