Tuesday 28th July 2015Sterling has fallen sharply against the Euro of late, and in the last week had slipped from €1.44 down to €1.40. As you can see from the chart below, the rate has recovered slightly this morning, getting back above €1.41: The main reason for the gradual slide in Sterling is partly due to renewed optimism surround Greece, but also the global economic picture. If you look at the global economy, you will see that the Chinese market is in turmoil, and there has also been a sharp drop in Commodity prices. This is giving investors serious doubts over the strength of economic growth worldwide, and in turn this casts some doubt over whether the Bank of England will actually raise interest rates at the turn of the year. The global picture means that the Bank of England may well have to tighten their monetary policy, and this has pulled Sterling lower against other currencies. This morning however, strong UK Growth figures have shown that the economy has grown by 0.7% in the last few months, which is an improvement over recent measures. This positive news has pushed the Sterling/Euro rate up by 1% comfortably over the €1.41 mark. Sterling/Dollar It is interest rates driving this currency pair too at the moment. Today, the US Federal Reserve starts a 2 day meeting, with an announcement due tomorrow. If they give further signals that interest rates are going to rise within the next few months, then expect the US Dollar to gain strength and pull rates lower. Currently GBP/USD is trading at around $1.56. I don’t expect the level to remain at these levels. As the US are widely expected to be the first western economy to start pushing up rates, this could mean the USD strengthens. I still expect rates to drop below the key $1.50 mark by the end of the year. Do you have a currency transaction to perform? You can get in touch with me using the link below to obtain a quotation on your exchange. I usually have no problem beating rates from bank and other brokers, and even a small improvement in the rate can save you a significant amount of money.
Thursday 23rd July 2015Sterling/Euro rates have been threatening to fall for a week now, and today the market took a plunge pushing GBP/EUR rates down into the €1.41’s. After a quick look at the chart, I’ll go into more detail regarding what caused the rate to fall, and whether the Pound will go back up against the Euro. Why has the Pound fallen against the Euro? The first reason was Greece, which is becoming a regular and tiresome topic in the currency world! However it looks like things are getting closed to being resolved. They have taken a crucial step towards a bailout after its parliament passed a second set of reforms today, and this has given confidence back to the Euro. This is why the market initially started dropping this morning. There had been fears of a rebellion by Greek MPs, but the Greek Prime Minister Alexis Tsipras got the required support. This means that negotiations can begin on approving the terms of a third bailout. It looks like a final deal will be sorted out within the next 3 weeks, and if so I’d expect the rate to drop even further. The second reason for the decline was some very poor UK Retail Sales numbers this morning. The number was expected to show a rise of 0.4%, but actually sales dropped by -0.2%. As retail sales are seen as a good overall barometer of economic activity, the news sent the Pound lower, pushing rates even further from the 8 year high of €1.44 we’ve recently seen. Will rates recover? Moving Forwards, longer term I think rates will continue to remain strong due to the UK economy performing well, despite today’s poor numbers. However in the short to medium term, if the ongoing Greek saga finally ends with a full €86bn bailout, expect the GBP/EUR rate to fall sharply as the Euro regains strength. Do you have a currency transaction to perform? You can get in touch with me using the link below to obtain a quotation on your exchange. I usually have no problem beating rates from bank and other brokers, and even a small improvement in the rate can save you a significant amount of money.
Wednesday 22nd July 2015 Yesterday was not a good one for Sterling/Euro rates, with levels sliding all day from €1.44 to €1.42. The reason for the drop was renewed confidence about Greece, and in particular credit rating agencies increasing Greece’s rating as they felt there is now much less chance of them leaving the Eurozone. This morning, Sterling has fought back slightly after the release of the Bank of England (BoE) minutes from this morning’s Monetary Policy Committee (MPC) meeting. The full minutes can be read here. The key phrase I noticed was “the decision between holding Bank Rate at its current level versus a small increase was becoming more finely balanced”. This means that despite all 9 members voting to keep the interest rate at the record low of 0.5%, it shows that they are going to start leaning towards finally raising rates towards the end of this year. The next meeting is in 6 weeks’ time, and we may start to see some of the members voting for a hike in rates. This has given Sterling a boost, as the rumour of an interest rate rise usually does. The same effect has been seen on the US Dollar this week. View live currency graphs here Today’s Data All eyes were on the Bank of England and the inflation report this morning, and at 10am there is a parliamentary inflation report. For the remainder of today, the only data of note is an Interest Rate decision and policy statement by the Reserve Bank of New Zealand. Their inflation is very low at the moment, and the NZD is very weak due to the low commodity prices (See my post about commodity currencies to learn more). I think there is a chance they will cut interest rates to try and boost the economy. If they do, then expect GBP/NZD rates to go higher. Getting the best exchange rates If you want to get the best possible exchange rates, then contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+. You can send me a free enquiry using the link below, and I will get in touch personally to discuss your requirements, explain how the service works, and discuss the different options you can consider to help you get the best rate of exchange possible.
Tuesday 21st July 2015 In today’s post I’ll take a look at what’s been happening with Sterling/Euro, Sterling/Australian Dollar & Sterling/US Dollar, including where rates may head in the coming months. (If you would like to discuss your currency requirement and obtain a quote on the best exchange rate I can provide, get in touch by clicking here.)Sterling/Euro GBP/EUR rates started the week at new highs of €1.44. This was due to comments from the Bank of England, hinting that interest rates may finally start to rise at the end of the year. This strengthened Sterling pushing it higher against other currencies. Today however we’ve seen the rate drop back steadily throughout the day by 1% at the time of writing, as you can see from the chart above. Renewed optimism due to Greece starting to repay it's debts, and the fact they may soon secure a proper bailout, is starting to strengthen the Euro and make it more expensive to buy. Tomorrow, we have the Bank of England (BoE) meeting and minutes on their discussions on rates. If these show that 2 or more of the BoE’s Monetary Policy Committee (MPC) vote for a hike (or even discussed the possibility of it) the Pound may gain further. Sterling/Australian Dollar GBP/AUD rates are very high at the moment, as you can see from the chart below: 
Current levels are at 2.11 which are around the best they’ve been in 8 years. The reason is that China, Australia’s largest trading partner is slowing down, and there is less demand for commodities. Commodity prices are very low at the moment, weakening currencies such as the CAD, NZD, ZAR as I touched on in a recent post. Late tonight, the Aussies release inflation data, and there is a speech by their central bank governor. If he hints that interest rates will be cut again, then we could see GBP/AUD go even higher. Sterling/US Dollar GBP/USD rates have been dropping of late. This is mainly due to the fact US interest rates are expected to rise in a few months’ time, the first major western economy likely to start pushing rates up. The higher return potential means USD is in demand and getting stronger. 
I expect the US Dollar to continue gaining strength in the coming months, and wouldn’t be surprised to see GBP/USD rates back at $1.50 or even below this by the latter part of 2015. Getting the best exchange rates If you want to get the best possible exchange rates, then contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+. You can send me a free enquiry using the link below, and I will get in touch personally to discuss your requirements, explain how the service works, and discuss the different options you can consider to help you get the best rate of exchange possible.
Thursday 16th July 2015 The Euro remains incredibly weak today, with GBP/EUR rates settled around the €1.43 mark, a fresh 8 year high. In today’s post I’ll look at the developments over the last few days, what happens next with Greece, why the Euro remains weak, and what might happen to exchange rates in the coming weeks. First, let’s look at how exchange rates have moved so far this week:ECB agree €7bn loan to Greece Last night as expected, Greek MPs passed through the reforms that were part of the recent EU bailout deal. As a result, today the European Central Bank (ECB) agreed to provide a €7bn loan to Greece to help it until an actual bailout is approved. The ECB also said it would give more emergency funding to Greece, which could help the banks to open in the coming weeks after being closed all month so far. Why is the Euro still weak? Many thought once an agreement had been made that the Euro would strengthen and exchange rates would drop back away, however the single currency remains very weak indeed. I’ve seen €1.4350 on the markets today however at the time of writing, GBP/EUR sits around the €1.43 mark. The reason the Euro is still weak, is that when you pick apart the current agreement, it’s clear that it’s not actually likely to fix anything. Yes a loan has been granted, but all that means is there will now be a new round of talks on a full third bailout from the EU. Not a great deal has changed, the can has just been kicked further down the road, and what a long road it is! What happens next with Greece? The EU will likely provide the lending to Greece tomorrow. Germany now needs to agree to continue negotiating on the full €86bn bailout. Later this month Greece needs to pass further reforms, and if all that happens, then talks begin again to a full bailout using the European Stability Mechanism. So actually, we are still a long way off from a proper solution to help Greece, hence GBP/EUR exchange rates the best they have been in close to a decade. Which way will exchange rates move now? It’s impossible to predict of course, but with everyone now likely to have to go back to the negotiating table, and the IMF stating much more needs to be done, all the uncertainty that has been keeping the Euro weak remains. This could keep the Euro weak, and other developments may now push GBP/EUR higher. Perhaps they should start printing the Euro on Greece proof paper in the meantime!If we look at interest rates in the UK, USA and EU, then it’s clear that Britain and the United States will start to raise rates before our European partners. As I explained in a post earlier this week, the rumour of higher interest rates drives investment in a currency due to the higher return. With the EU still pursuing a Quantitative Easing programme, interest rates there are likely to remain low for a long time to come. This means investors will move funds away from the Euro into Sterling and the US Dollar, and this also means the Euro is likely to weaken, and GBP and USD will strengthen. This could mean that GBP/EUR goes higher, but we’ll have to wait and see. Do you need the best exchange rates? The currency markets are incredibly fickle and notoriously difficult to second guess, but with a sound knowledge of the options available to you and an understanding of what is moving exchange rates, you can make an informed decision on when to fix our rate. If you would like a quote on the rates I provide, a chat about the service I offer or simply want to talk about what is happening in the market, contact me for free by using the link below.
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Wednesday 15th July 2015In a new twist to the ongoing Greek saga, last night the IMF released a statement saying that they don’t think the proposed bailout goes far enough. Effectively, this is a warning that the IMF will not take part in any rescue package for Greece unless the other EU creditors agree to much more debt relief than planned. This is a huge complication, and the amazing fact is everyone involved in the negotiations knew the IMF's position, but just ignored it.
Ignoring things doesn't make them go away, and the stunning developments means that the Euro has weakened even further, as nobody knows if this on-going issue is actually ever going to be resolved or not. The effect on the currency markets is a Euro that’s getting even weaker. The GBP/EUR reached €1.4240 this morning, before some poor UK employment numbers pulled it back down to the €1.42 mark as the graph below shows: What does all this mean for the Euro? It means that even if the Greeks agree to the plan today, it’s likely that the whole package agreed may now need to be re-negotiated, so in effect tomorrow morning we may well be back at square one. What an absolute mess this really is. The banks are still shut. They probably won’t open again for another month until an actual package is re-negotiated and ratified, so the ‘solution’ that came on Monday seems to be nothing of the sort. Result - GBP/EUR getting even higher. Getting the best exchange rates These are very uncertain times, and having a good currency broker on your side can save you a lot of money if you are converting a large sum. Therefore if you want to get the best possible exchange rates, contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+.
Tuesday 14th July 2015We have seen a sharp spike for Sterling this morning, after the Bank of England governor Mark Carney has said that the time for a UK interest rate rise is getting closer. This is despite figures this morning showing that inflation sits at 0%. This really shows how simple things like a few words from a central bank governor can affect exchange rates. Here's a look at how the Pound rose by over a cent against the Euro as soon as he made the comment at 09:53am:
Why did his comments cause the Pound to rise?It's due to the fact that he has hinted interest rates may go up in the UK this year. Higher interest rates make Sterling a more attractive investment for investors due to the higher return on offer, and so the Pound has strengthened, pushing exchange rates up against other currencies. In recent times it's been things like Greece and elections that has affected the rate, but years ago things like interest rate movements and economic data were the main things that caused exchange rates to move. I'm sure there will be further developments tomorrow from Greece, and once that issue is resolved, focus is likely to return to traditional economic stats and things like interest rates. Getting the best exchange rates If you want to get the best possible exchange rates, then contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+. You can send me a free enquiry using the link below, and I will get in touch personally to discuss your requirements, explain how the service works, and discuss the different options you can consider to help you get the best rate of exchange possible.
Monday 13th July 2015It was quite an eventful weekend for Greece and the Eurozone, with late night negotiations resulting in an announcement this morning that a deal has been made. If that’s the case, then why hasn’t the Euro strengthened? As you can see from the chart below, when markets opened this morning and reacted to the news, rates actually rose from €1.39 to €1.4050. As is often the case in the currency markets, the devil is in the detail, and in a moment I’ll explain why all is not as it seems and look at why Pound/Euro rates are still high. Greece makes deal, but Euro remains weak for nowThe facts are as follows: Athens has been offered a third bailout, and this means the country will avoid bankruptcy. Greece will stay inside the euro and there will not be a 'Grexit'. However, it’s not quite yet a done deal. A proposal is on the table, however Greek Prime Minister Alexis Tsipras now has to rush through key measures on pension reforms, tax increases and a debt repayment, all of which needs to be approved by parliament by Wednesday, and only then will bridging loans be agreed to enable Greece to meet a payment to the European Central Bank in a weeks time. Eurozone finance ministers are due to meet later today to talk about some emergency lending to help Greece over the next few days. Some investors say even if a final deal is agreed, the lasting damage done to the Greek economy could still sour attitudes towards the currency union in the longer term. The tough conditions imposed by international lenders may also cause an outcry in Greece and bring down Tsipras' leftist government. Even before the final terms were known, his labour minister went on state television to denounce the terms. So it's not quite over yet, and while uncertainty remains, the Euro remains weak. Summary So a deal is done. Sort of. But we have to wait until Wednesday to see if it will actually be carried through. The Greek parliament still need to agree to the terms, and the EU still need to discuss emergency funding, and until then capital controls are still in place and the Greek banks are almost out of cash. This is the reason the Euro is still weak and GBP/EUR rates are still holding above €1.40, while the final hurdles are negotiated in Greece and Europe. I will post regular updates on the blog throughout the week with the latest developments and t he effect on Pound/Euro rates. Getting the best exchange rates If you want to get the best possible exchange rates, then contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+. You can send me a free enquiry using the link below, and I will get in touch personally to discuss your requirements, explain how the service works, and discuss the different options you can consider to help you get the best rate of exchange possible.
Friday 10th July 2015It looks like we’re edging closer to a deal over Greece, and the GBP/EUR has been edging lower ahead of a possible deal this weekend. (Take a look at my live currency charts, a snazzy new feature I've recently added to my blog that regular readers may have noticed!) Let's take stock of where everything stands...Yesterday the Greeks delivered their proposals to European creditors as promised. Today they are rallying support ahead of a vote by the Greek parliament at 10pm tonight. If they vote it through, which looks likely at the moment, then on Saturday EU finance ministers will have to all vote to agree to the proposals. On Monday morning, the parliaments of the EU will vote on whether to agree the deal. If all of this happens, then Greece will be given the €3.3bn they need to pay their outstanding debts. What affect could this have on the Pound/Euro exchange rate? It’s very hard to say and the currency markets are impossible to second guess, but logic would dictate that if all goes to plan, then the crisis is averted and the Euro could gain significant strength, and that would pull exchange rates lower as the single currency becomes more expensive to buy. This could be good news for clients that will need to move Euros to Pounds, however if you need to buy Euros then there is the potential for a sharp drop in rates. We'll see how things pan out when markets open on Monday morning. If you need to buy Euros, how can you protect yourself? If you have an upcoming Euro requirement then it would be wise to put a strategy in place rather than just sitting back and waiting to see what will happen to the GBP/EUR exchange rate. Some examples of the things you could consider are as follows: - Fix the rate now on a Forward Contract – This means locking in the exchange rate now for up to 2 years into the future. You lodge 10% of the total you want to convert, and the remaining 90% is due when you want the Euros to be transferred. This protects you against the rate going down, but leaves you unable to take advantage should the rate go higher. You fix the rate, and that’s what you get regardless of what the market does.
- Use a Stop Loss Order – This works by setting a target level, below which your order to buy Euros is executed. For example if you place a ‘Stop Loss’ at €1.35, then if the market drops to that level, your currency is purchased. It’s useful as it gives you a worst case scenario should the market fall. If however the rate climbs higher and the Stop isn’t filled, you can still take advantage of a higher rate of exchange.
- Hedge your bets – If you are unsure which way the rate will go and want to gamble on Greece failing to secure a deal and the rate going higher, then one strategy you can consider is fixing a rate on a portion of the funds you need to buy, 50% for example. In this way you reduce your exposure significantly, and have some level of protection regardless which way the rate goes. If it does drop, then at least you bought some of your funds beforehand. If the rate climbs, then great you can buy the remaining amount needed at a higher rate.
The above are some examples of the services I can offer, along with excellent rates of exchange. If you would like to receive a quote on the rate that I can offer you, or discuss your currency requirements in more detail,click below to get in touch.Get in touch to get a quote and find out more
Thursday 9th July 2015
Deadline day for Greece By midnight tonight, Greece has to submit its plans and new proposals to its creditors to try and secure a bailout and prevent a possible exit from the Eurozone. What they submit will then be looked at by EU Finance ministers at the weekend, and a decision is likely to be taken on whether to accept them at an EU Summit on Sunday. 
Greece needs to make a deal. At the moment the banks there are still closed, and a €60.00 limit on ATM withdrawals. At this rate, it’s likely the banks will run out of money by Monday, so it really is crunch time for the Greeks. With the referendum out of the way, I think it’s quite likely that Greece will now soften its demands. They really have taken the negotiations as far as then can, and they know it’s in their interests to now make a deal to restructure its debt. EU leaders are almost out of patience, Greece knows this, and so a deal could be struck this weekend. What could this mean for Sterling/Euro exchange rates? 
I am still of the view that a deal will be done and Greece will remain within the Eurozone. If a deal is indeed done to restructure Greece’s debts this weekend, then it will remove much of the uncertainty that has been weakening the Euro of late, and so in this eventuality I would expect Pound/Euro rates to fall. We’ve already seen it drop down to €1.39 as investors await news of a potential bail out deal, and I would expect a further fall should the saga finally be resolved. The other scenario is Greece rejecting whatever solutions the EU Summit present. If this were to happen, then the negotiations could break down entirely. There isn’t actually a mechanism in place for Greece to leave the Euro, so all parties know that the only real solution is a deal. Do you have a currency transaction to perform? For those that need to buy Euros and are worried about rates dropping from the current level, you can reserve the current rate now and only lodge a 10% deposit to guarantee that rate for up to 2 years into the future. In this way you can budget effectively and be protected against the rate falling away from the current level which is near to an 8 year high. Click here to find out more.
If you want to get the best possible exchange rates, then contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+. You can send me a free enquiry using the link below, and I will get in touch personally to discuss your requirements, explain how the service works, and discuss the different options you can consider to help you get the best rate of exchange possible. Click here to discuss your currency requirements today.
Wednesday 8th July 2015 In today’s report I’ll look at the latest developments in Greece, the effect of today’s Budget statement on Sterling, and also why the Pound/Euro rate has dropped to €1.39. Pound/Euro drops to €1.39
Since the start of the week, we’ve seen GBP/EUR exchange rates drop from €1.42 to €1.39 today. There are several factors affecting the Sterling/Euro cross at the moment, and after a quick look at the chart I’ll address each one in turn. What has caused Pound/Euro rates to fall?
Sterling had been performing very well recently, rising on the back of some better economic numbers in recent months and the returning of a majority Conservative administration in May's general elections. The Pound had strengthened as a result, however now seems to be on the back foot. Here is my take on why Sterling has weakened off today. Greek deal - The Greek situation seems to be coming to a head, with Greece set to submit fresh proposals on Thursday, EU ministers meeting on Saturday to discuss, and a decision on Sunday before a looming deadline for Greece to make a €3bn payment to the IMF. This could well be the last chance for Greece, and many sources are optimistic a deal will finally be done. The uncertainty of the last few months had largely already been priced into the Euro, and so the single currency is starting to regain some strength on the possibility of a resolution. UK Budget – today George Osborne delivered his first conservative majority budget. The Pound had weakened this morning, and while there were some very positive things announced, in general it was a budget of austerity, and the fact that they are looking to go harder on austerity and start reducing overall debt soon bodes ill for the immediate outlook for the Pound.UK growth figures have been revised down, House prices are rocketing due to low supply, and this means that while the UK economy is performing very well, it’s not as good as some had hoped several months ago. This has taken the steam out of the Pound. Flight to safety – there are real problems in China right now, with the stock markets there in free fall. Investors are wary of any uncertainty, and this combined with Greece and very low commodity prices means investors are placing their funds in ‘safe haven’ currencies like the US Dollar, Japanese Yen and Swiss Franc. The Pound has lost out as people move their funds to safer places riding out the global economic uncertainty. Do you need to convert currency at the best rates?
Exchange rates can move very quickly, and having an expert currency broker on your side can make a huge difference. From exchange rates up to 5% better than the banks, free consultations to discuss your currency requirement and strategy, to various contract types to help protect against adverse exchange rate movements, there are many positives to getting in touch to see how I can help you. The first step is to send across an enquiry, and I can then personally get in touch to discuss your requirements, explain how the service works, and provide you a quotation on your rate of exchange.
Tuesday 7th July 2015 In recent posts I’ve been focusing on Sterling/Euro exchange rates and the Greek crisis that is the reason for the current buying levels for the Euro being around the best in 8 years. Nothing has really changed for GBP/EUR and while a deal is yet to be made, the rate remains supported around the €1.41 level. For something a little different, in today’s report I’m going to take a look at Sterling/US Dollar, Sterling/Australian Dollar, and also some of the other commodity based currencies, including the forecast for where analysts think rates could go. Many readers are unaware that this site not only provides a market commentary on Euros, but also most major international currency pairs. (If there is a particular currency pair that you would like to chat about, then get in touch for a free consultation.) In addition to the market reports I provide for free, I can also provide you a quote on your currency exchange. I can access commercial rates of exchange for over 30 currency pairs that are up to 5% better than you can achieve at the bank. If you have a currency exchange to perform this year, then click here to find out what rates I can offer you. Sterling/US Dollar
GBP/USD was down in the $1.40’s a few months ago, however recently it had been climbing. In the last 3 months the rate climbed over 10 cents higher, as you can see from the chart below: In the Spring, markets expected the USA to raise interest rates at some point this year. This along with strong US economic data strengthened the US Dollar and made it more expensive to buy. However in the last few month's economic data was coming in worse than expected. Also, the expectation of an interest rate rise has now been pushed back, and this is what caused the USD to weaken and exchange rates to rise. Today however, we have seen the rate slide from $1.5625 to $1.5425. This is because interest rate differentials are starting to move in the Dollars favour. Also, while the crisis in Greece deepens, the US Dollar is seen as a ‘safe haven’ for investors in times of uncertainty. In my view I think this slide will continue, and we may well see rates down at or below the $1.50 mark again by the end of this year. GBP/AUD, and GBP/NZD, GBP/CAD, GBP/ZAR
Sterling/Australian Dollar rates are currently around their best in 6 years. Part of this is due to a robust UK economy, but mostly this is due to weakness in the Australian Dollar. The Aussie Dollar is a commodity based currency, which is a name given to currencies of countries which depend heavily on the export of certain raw materials for income*. Australia is just such a country as a large part of its economy relies on exports of raw materials to China. China's economy has been slowing down recently, and their stock market is falling.This has resulted in less demand for these raw materials, and commodity prices are low anyway due to the Greek crisis. The result is a weak Aussie Dollar, and at the moment £1.00 will buy you $2.08 AUD, which is around a 6 year high. To be honest, while commodity prices continue to suffer, we could see all commodity based currencies like the AUD, CAD, NZD, NOK and ZAR continue to weaken and exchange rates may rise further for those buying these currencies with Sterling. *Other Commodity based currencies are the Canadian Dollar, New Zealand Dollar, Norwegian Kroner, South African Rand. All of these currencies are currently weak and very cheap to buy due to low commodity prices. Click here for a free consultation, obtain a quote and find out more about the service and exchange rates I can offer you.
Monday 6th July 2015This weekend the Greek people voted against the terms of their latest bailout proposal. 61% voted against it, and 39% voted to accept it. The reaction on the currency markets has been surprisingly muted. Greece's finance minister, who often clashed with creditors, has resigned. Varoufakis was seen as a major obstacle in negotiations and now that he has stepped down the possibility of a last minute deal to keep Athens in the Eurozone may have increased, and this could be a reason that the Euro hasn’t weakened more. What does all this mean for Pound/Euro exchange rates?
Over the weekend we saw some weakness in the Euro on the Asian markets, with GBP/EUR rising to nearly 1.42. However as soon as European markets opened this morning, prices had corrected to €1.4050, so little change from where we were last week. Actually nothing has really changes. Greece will now go back to the negotiating table to try to strike a deal to re-structure Greek debt. Something needs to be done as without emergency assistance from the European Central Bank, Greek banks are going to run out of money within a few days, so despite the Greek people voting against Austerity, if they want their economy to survive then they still need to make a deal with their creditors. With the referendum out of the way, talks can resume and things are back to where they were a week ago. However while the market seems stable at the moment, the Euro could be vulnerable to selling on the market, so as the saga continues, we could see the Euro weaken further. At the moment however it seems a deal could be still be done. If it is, expect GBP/EUR to drop. If it isn’t, expect rates to remain firmly above 1.40. So all in all nothing has really changed! Are you looking for the best exchange rates?
Those that have a currency transaction to perform should get in touch for a quote and find out more about the exchange rates and currency services I offer. I regret we don’t deal in cash or holiday money, but if you are looking to convert £5k to £1m and would like the very best commercial rates of exchange, then click below to send me a free enquiry today.
Friday 3rd July 2015 Regular readers of my blog will be well aware that most moves in Sterling/Euro of late have been due to the ongoing problems in Greece. The failure to meet their debt payments and the ongoing negotiations have weakened the Euro significantly in the last few months, resulting in a cheap single currency. In fact the current GBP/EUR is very close to the best it’s been in 8 years. Below is a chart showing the exchange rate over the last 3 months. As you can see, it's risen to €1.40 several times before dropping back away again: What’s happening this weekend?
The Greek people are voting on a referendum called by the Greek government, on whether they support the bailout offer, in terms of further international loans. This follows months of tough talks with creditors. Currently all support to Greece has been stopped, and the banks are likely to run out of cash on Monday. You can read more about this here on the BBC website. EU leaders have warned that a "No" vote could see Greece leave the Eurozone. What if Greece votes ‘No’?
This would mean them rejecting the bailout plans, and the Euro could well weaken pushing Pound/Euro rates higher. Some say this would mean Greece leaving the Euro. Actually, there is currently no mechanism for them to do so, as it simply wasn’t envisaged when the Euro was created! Even if they decided to leave the Euro tomorrow, it would take months for the EU to work out how to do this in practice. A no vote though would mean back to square one, and negotiations would start again. I do think however that a No vote will keep Pound/Euro firmly above 1.40 and we could possibly see rates climb even higher. What if Greece votes ‘Yes’?
This would be a blow to the Greek government. It would in no way resolve the problems, as all it would mean is that negotiations would start again. However, I think a Yes vote would strengthen the Euro, and pull GBP/EUR rates back below the 1.40 mark again. What does all this mean for Pound/Euro rates?
This afternoon GBP/EUR has fallen as the latest polls suggest the Yes vote has a slight lead. This indicates that rates could tumble if the vote goes this way on Sunday. Personally, whichever way the vote goes on Sunday, I still firmly believe a deal will be done between Greece and its creditors, and when it does I would expect Sterling/Euro to drop sharply. It’s in everyone’s interest to do a deal especially Greece’s. If I needed Euros in 2015, I would give serious consideration to fixing a rate while it’s close to the best in 8 years. Do you need to get the best exchange rates?
Regardless which currency you need to buy or sell, why not get in touch with me for a quotation, and to discuss the different tools I provide to protect you against adverse exchange rate movements. The rates I source are up to 5% better than banks and other brokers may offer, and it costs nothing to contact me for a free consultation and quote. I can also discuss your particular requirements, explain what may happen to exchange rates in the coming months, and explain the options you can consider so you can make an informed choice on how to proceed.
Have a great weekend.
