Will GBP/EUR go up or down in June 2015?

Wednesday 27th May 2015 
Sterling/Euro has been holding firm well above the €1.40 mark so far this week, on continued concerns Greece may not be able to make its next debt payments. However this may not last for long, as there are indications Greece are about to strike a bail out deal.

The Greeks have 4 different loans to repay in the next 4 weeks, totalling around €1.6 billion. One payment of €300 million is due in 1 week. There has been talk that they could avoid paying back the IMF next week, lump it all together and make one large payment at the end of June, however they still have to negotiate the funding to do this, which is keeping the Euro weak. 

For most of today and yesterday, GBP/EUR was sat at a 3 month high, and only 1 cent below the best it’s been in 8 years. However the rate has been sliding this afternoon, after Greek Prime minister Alexis Tsipras said his government was "close" to a deal after reports the two sides had begun the process of drafting an agreement. 

"We have made many steps. We are on the final stretch towards a positive deal," said Mr Tsipras, without revealing the details of the terms. The Queen’s speech this afternoon also weakened the Pound, pulling exchange rates lower as it outlined the UK referendum on an EU exit. As you can see from the chart below, the exchange rate has dropped by cent, however still remains supported above €1.40, for now: 

Will Pound/Euro go up or down in June2015? 

On the one hand, if it looks like that Greece will be unable to make it’s debt payments, expect rates to remain firmly above €1.40. On the other hand, if they make a deal with it’s creditors that now seems quite likely, the Euro could very quickly regain some strength and pull rates back below €1.40 very quickly indeed. 

Should the Greek situation be resolved, then it’s also likely focus will turn to a possible UK exit from the Eurozone. Many say that should this be a possibility, then there are real risks to the UK economy. This is because our economy here in the UK really relies on inflows of investment and this would likely be diminished should there be uncertainty about us remaining within the EU. 

Do you have a currency transaction to perform? 

Get in touch for a quote and free consultation on the rates and service I can offer you. I can explain what is moving the rate and let you know the different options and contracts you can consider, to ensure you don’t pay more for your currency than necessary. 

With rates up to 5% better than banks can offer, coupled with a range of contract types to protect you against adverse exchange rate movements, I could save you thousands on your currency transfer. 

I can help with bank to bank transfers for amounts £5k + and can source over 35 major international currency pairs including GBP, EUR, USD, AUD, NZD, CHF, CAD, HKD, SEK,NOK, DKK, HUF, TRY, PLN, CZK, SGD, THB, CNH, ZAR. 

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GBP/EUR breaks €1.40 on strong UK Retail Sales

Sterling/Euro rates have today pushed through the €1.40 barrier again today, following stronger than expected UK Retail Sales data. This is the 3rd time in the last few months the pair has broken through the key 1.40 level: 

The much better than expected Retail Sales reflect a growing confidence in the UK economy, and as such Sterling has risen against other currencies. Also helping the Pound this week were the minutes to the recent Bank of England decision to hold interest rates. While all 9 members voted to keep rates on hold, it seems for 2 of them it was a finely balanced decision. This means that despite inflation turning negative this week, a 2016 interest rate hike could be on the cards, helping boost the Pound. 

Will Pound/Euro rates remain above €1.40? 

It’s impossible to predict of course, but looking at past performance it’s clear this level has been reached several times in the last few months before dropping back away. The only thing keeping the rate high is uncertainty over Greece’s next debt repayment. If they make progress in this respect then expect the rate to drop back away. If it looks like they will have difficulty meeting their commitments, the rate may be sustained above €1.40. 

Getting the best exchange rates 

If you have a currency transaction to perform, then get in touch for a quote and free consultation on the rates and service I can offer you. With rates up to 5% better than banks can offer, coupled with a range of contract types to protect you against adverse exchange rate movements, I could save you thousands on your currency transfer. I can help with bank to bank transfers for amounts £5k + and can source over 35 major international currency pairs including GBP, EUR, USD, AUD, NZD, CHF, CAD, HKD, SEK,NOK, DKK, HUF, TRY, PLN, CZK, SGD, THB, CNH, ZAR. 

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Pound/Euro exchange rates May/June 2015

Tuesday 19th May 2015
Sterling/Euro rates continue to remain pretty volatile, and in the last 24 hours we have seen the pair rise from €1.3730 to nearly €1.40, which was due to weakness in the Euro. The gains didn’t last long however, and UK inflation figures this morning have weakened the Pound and knocked the rate down a cent, to around €1.3850 as the chart below shows. 

In today’s report I’ll explain what has caused the movements for Pound/Euro rates, and look at where the GBP/EUR exchange rate may move in May & June 2015. 

Euro weakness causes GBP/EUR to rise to nearly €1.40 

Greece has another large debt repayment to make on the 5th of June. Whether they will make it or not is having a big impact on the value of the Euro. The IMF think they don’t have much chance of meeting the payment, and their acknowledgement of this yesterday caused the Euro to weaken, pushing GBP/EUR rates up from 1.3750 to 1.3850. 

The weakness in the Euro continued this morning when European Central Bank officials said the bank could take further action, and pump even more money into the economy than they are doing already, in order to quash euro zone bond yields and boost inflation. If they increase their QE program and the amount of Euros their pumping in, then it will weaken the Euro. More of anything means it’s worth less, and that was the reason for this morning’s GBP/EUR push up to almost €1.40. 

UK inflation figures pull rates back down 

The rates only got to this level for 20 minutes or so, and then the UK released its latest inflation numbers. This showed that inflation turned negative for the first time in over 50 years. So why did this cause the Pound to drop? It’s because of interest rates. With inflation negative, there is no chance of a rate hike anytime soon. Because rates are going to stay low for a long time to come, there is little incentive for investors to buy the Pound, so that’s why the rate dropped back away. 

Where next for Sterling/Euro rates 

You can see from the chart that there is a steady line of support and resistance at around the €1.3850 market where it keeps settling back down. I think that whether the GBP/EUR rate goes up or down depends on what Greece is expected to do. Quite simply, if they don’t make their next payment or it looks like they won’t, the Euro could weaken further and push rates back towards €1.40. This is a key technical level so unless anything else unexpected happens I don’t think it will break through this. 

Alternatively the Greeks could just be delaying in order to re-negotiate the deal they are getting. If payments are made or an agreement is put in place, then the Euro could gain strength, pulling rates back down again as the single currency becomes more expensive to buy. 

Getting the best exchange rates 

Rates are very volatile at the moment, moving very quickly. In order to get the best possible rates you need to have a good currency broker who can monitor the market for you, explain the options you can consider on when to fix a rate, and get you a much better rate than banks will offer. The worst thing you can do is just watch the rate and hope itwill move your way, or use the bank to convert your funds. 

Why not give me a try? The rates and service I provide are exceptional, and with over 10 years’ experience helping personal and business customers with their currency requirements, it may be prudent to see if I can do the same for you. Send me a free no obligation enquiry today by clicking below. 

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Pound soars back to nearly €1.40 after Conservative Majority

As I said in my last post just over a week ago, the blog was going to be quiet while I took a short holiday. Much has happened since I’ve been away! As most readers will already know, the Pound has surged higher against the Euro as Sterling posted its largest gains against the Euro in years. As exit polls showed that the Conservatives would take an overall majority, GBP/EUR rose 4 cents, and touched the €1.40 level several times as the chart below shows: 

Why did the Pound gain so much on a conservative win? 

The Pound had fallen sharply before the election, due to political uncertainty for investors who had expected a hung parliament. Most polls had again and again shown the two main parties neck and neck, with neither expected to secure a parliamentary majority. The overall majority for the conservatives while not popular with everyone, is certainly very good news for the UK economy. As such, investors rallied to buy the Pound, helping to push it up against other currencies. 

Will the Pound/Euro rate get back to €1.40? 

I personally don’t think so. You can see the resistance GBP/EUR has at €1.40 in the above chart, and the currency pair seems unable to break through this. Indeed this week we’ve seen the rate drop back to the €1.38 level. I think the Pound/Euro rate could now fall again, and I’ll explain the reasons why… 

• The Conservatives now have a majority, they can implement much tighter monetary policy than they have done under the Con/Lib Dem coalition. This means that the Bank of England may now keep monetary policy easy and keep interest rates low, which would weaken the Pound, which could take some of the wind out of sterling's sails. 
• Cameron has pledged to hold a referendum on membership of the European Union within two years, and the uncertainty this will generate will also keep investors wary and limit any further gains.
• The Spotlight is now back on the EU and Greece, and actually recent figures suggest the European Central Banks stimulus program is having the desired effect, and the economy in Europe seems to be recovering. 
• Greece (which incidentally is where I have just been on holiday!) seems to be playing ball and, for the moment, is meeting its debt repayments. The Euro is weak at the moment due to Greece, and if this gets resolved, it could regain strength and become more expensive to buy. 

What should you do if you need to buy Euros this year?

I can’t predict what the rate will do, nobody can. What you can do however is speak to an expert currency broker like me to ensure you have an understanding of the options available. For example if you are worried about the rate falling, you can lock in the rate now for up to 2 years with a Forward contract. If you want to gamble on rates going higher, then you can use a ‘Stop Loss’ order to fix a rate should we see it plummet below a particular level, so you’re not exposed. Or, you could hedge your bets and fix a rate on half your requirement now, and see what happens later in the year with the remaining funds you need. 

Do you need to achieve the best possible exchange rates? 

The above is just an example of how I can help you if you’re looking to buy or sell currency. I can source you rates of exchange that are very close to the mid-market level you see published online and if you are converting a large sum, the savings could be thousands of Pounds. If you would like a quote on the exchange rate I can provide, or would like to discuss your options in more detail regarding when to fix a rate, then click below to send me a free no obligation enquiry today. 

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Volatile weeks ahead for foreign exchange rates

Wednesday 6th May 2015
After a tumultuous end to last week for the Sterling/Euro pair, yesterday we saw rates remain within a 1 cent range between 1.3550 and 1.3650. This still represents a large cost difference when buying a large amount of currency, however relative to the huge drop we saw last week, it actually seems quite stable! Regular readers of my blog and those keeping an eye on the currency markets in general will know that the coming few days will be incredibly important for exchange rates. 

In addition to the usual economic data releases that may cause rates to change we have, of course, the UK parliamentary election on Thursday. It is a significant event to determine the appropriate stance of monetary policy and assesses the risks to long term goals of price stability and sustainable economic growth in the UK, and as such, it’s highly likely to affect the Pound. 

In the last week alone, a purchase of €250,000.00 has differed in cost by more than £6,500.00. Similar cost differences over the next week will not be a surprise. Therefore if you need to convert one currency to another this week, you should have a clear plan in place with regards to what you want to achieve, and how you’re going to achieve it. 

Simply sitting back and hoping the exchange rate will move in your direction is not a wise approach, and in today’s report we will have a look at how you can protect yourself against market volatility the election may cause, and look at ways you can protect yourself. 

Click here to get a quote and discuss your currency requirement

UK General Election likely to cause significant market volatility 

Let’s put things in context. Elections always cause uncertainty, and as I’ve mentioned several times in our analysis over the last few weeks, this election result is highly unpredictable. 

At the moment it looks likely a hung parliament will be the result, so not only will the market face volatility this week, the biggest price movements may actually be in the following few weeks while deals are made and the main parties attempt to form a coalition government. 

Financial markets look for stability in order to spur investment and confidence, and the currency markets are no different. Without intending to sound political, and looking at this from a purely analytical point of view, one example would be the prospect of a Labour/SNP deal. In my view the financial markets would not react favourably to that given the effect it may have on business investment and the economy as a whole and so could send the Pound lower. At the moment there is no way to know what government we will have a few weeks from now, so let’s take a sensible look at ways you can protect yourself against market volatility to ensure your currency does not cost more than necessary. 

How to protect yourself against exchange rates moving the wrong way 

The below is a brief outline of the main contract types I can offer. For a full outline of the options you can consider, the first step should be a free consultation, so that you can make an informed decision on what to do. 

Some options you can consider are outline below. They’re not too complicated and these smart ways to trade offer a host of clever advantages depending on your individual situation. For a more detailed look at the options you can consider and to get a quote for your exchange, contact me today. 

Spot contract - The quickest, easiest and most popular way to buy and sell currency – you simply exchange one currency for another, whenever you need it. You have two days to send us the funds and, as soon as your funds clear, we’ll forward the currency to the account of your choice. 

Forward contract - A forward contract can help protect against market volatility, useful for managing your budget. You can set the price now for a transaction that will take place up to two years in the future, allowing you to fix the exact value of the currency to be paid, regardless of market fluctuations. You secure the forward contract with a margin of 10% of the total value of your transaction (you’ll need to pay this within two working days of agreeing the contract) and then pay the balance before the contract expires. Once secured, the agreed exchange rate will apply for the duration of the contract. This is very popular at the moment. 

Limit order - With a limit order you specify the exchange rate you are hoping to achieve – which may not currently be available. Your currency will automatically be purchased if the market exceeds this rate, meaning you get the price you want. This type of contract is particularly useful when the markets are moving in a positive direction for you. 

Stop loss order - A stop loss order instructs your broker to buy if the exchange rate goes down to a pre-determined level. When combined with a limit order, you can hold out for a better rate while protecting yourself from a sudden fall in the market. 

To have your free consultation and have a detailed chat specific to your currency requirements and timescales, contact us today. 

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Please note I will be overseas for the next 10 days, so will be back in action on Friday the 15th May, with a full analysis on happened to exchange rates after the election 

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Pound/Euro in free-fall, drops into the €1.35's

Friday 1st May 2015 
Well, we've all been saying the Pound/Euro rate was at risk of a serious fall, and that's exactly what we're now seeing. GBP/EUR has absolutely tumbled in the last few days. On Wednesday morning the rate was sitting at a near 8 year high of €1.40, however when I walked onto the trading floor this morning, I was shocked to see the market sitting in the €1.35’s. That’s a drop of more than 3% in just a few days as you can see from the chart below that shows the GBP/EUR rate over the last 2 days: 

Will the Pound keep falling against the Euro? 

The only reason rates were holding at €1.40 was the concern that Greece would not be able to meet its debt repayments. This had been causing real uncertainty over in Europe, and the Euro was very weak. As I outlined in my last post, actually the Eurozone economy is looking much more robust. Their QE programme is taking effect, and it looks like Greece will play ball with the IMF and its creditors. 

Focus has now shifted to the UK election. This uncertainty is starting to weigh on the Pound and is pulling exchange rates down across the board. We may see a recovery after the election, depending how the markets react to whatever coalition is put together, which could take a few weeks to do after polling day. Personally I think it will get worse before it gets better. Hopefully we won’t see a Labour/SNP deal, as without meaning to sound political, I don’t think the financial markets would react favourably to that given the effect it may have on business and the economy as a whole! I expect rates to be as low as €1.30 to €1.33 over the next month before recovering back to around €1.40. 

Do you need to buy Euros in the next 6 months? 

Buying a €250,000.00 property abroad has become more than £5000.00 more expensive in the last few days, really illustrating how quickly things can change in the currency markets. There is no way to predict the market, but what you can do is have a strategy to ensure you don’t get a low rate unnecessarily. 

If I needed Euros within the next 6 to 8 weeks, I would give serious consideration to fixing a rate now. Yes it’s a little lower, but bear in mind in January it was down at 1.25, and actually you’re still doing very well. If I had longer to play with and didn’t need Euros until maybe much later in the year, I would probably hedge my bets and fix a rate on at least 50% of what I needed, allowing me to take advantage of a recovery in the rate should that happen, and reduce my exposure to the market. I can fix commercial rates of exchange for up to 2 years, and clients only need to lodge 10% of the total they want to convert. 

Click here to find out more about the rates I can offer, or to discuss the market and options you can consider. 

Do you need to convert Euros back to Pounds? 

Well the last few days has really helped! You’re getting a much better rate due to the renewed Euro strength. Things may get better for you as the election approaches, but I think in the medium to long term we’ll see things get back to €1.40 and above. 

If I was selling Euros to Pounds, I would probably place a ‘Stop Loss’ order. This is an instruction to lock in a rate if the market starts moving against you and goes through a pre-agreed level. In this way you can still take advantage of any further Sterling weakness, but not leave yourself exposed should the rate snap back to where it has been in the last few weeks. 

Getting the best exchange rates 

The above is just a brief outline of the kind of things I can offer, from market knowledge to help you make an informed decision on when to fix a rate, to sourcing exceptional rates of exchange and a range of contract types to help you make the most of your currency. 

I can source rates of exchange for over 30 currencies, that are up to 5% better than the bank can usually offer. I have worked in the financial services industry for 16 years, with the last 10 specialising in commercial foreign exchange for private and business clients. If you need to exchange currency on a bank to bank basis, then get in touch with me for free to see how I can help you. Whether you’re buying or selling property abroad, want to top up a foreign account, or have business requirements to make or receive payments in foreign currencies, I can help you get the best possible rates. 

Click here to send me a free enquiry and find out more about how I can help you today.