Pound/Euro rates fall to €1.36 on ECB comments

Wednesday 3rd June 2015 
Not good news for those looking to convert Sterling to Euros I’m afraid. The decline in the GBP/EUR rate has continued today, as you can see from today’s chart: 

The reason for the continued fall today was further strength in the Euro. This was caused by the European Central Bank (ECB) saying that Eurozone’s recovery is set to "broaden and strengthen", as it raised its inflation projections for 2015. ECB president Mario Draghi's comments came in a press conference earlier today. 

This is good news for the EU economy, and strengthened the single currency causing it to become more expensive to buy. The next thing that could affect the rate will be whether Greece makes it's first debt payment on Friday. If they do, then expect the rate to fall further. If they don't then it may recover slightly, but I can't see it getting back to €1.40 any time soon.

What effect did this have on Pound/Euro exchange rates?

The effect on the GBP/EUR rate was for it to drop from €1.3775 to €1.36. This is a far cry from the levels of €1.41 we saw just a week ago, and really demonstrates how quickly exchange rates can change. To put this into real terms, a client purchasing €250,000.00 today has to pay £6500.00 more for the same amount of currency compared to a week ago. 

Fluctuations in the exchange rate can make a big difference to the cost of buying currency, which is why it’s wise to use a specialist broker like myself rather than the bank. I can not only help you to achieve much better rates of exchange, but also help with tools such as ‘Stop Loss’ orders that limits any negative effect of the exchange rate dropping. 

If you need to buy or sell Euros or indeed any international currency, then get in touch with me for a free quote and more information about the services I can provide. I will get back to you personally within 24 hours to discuss your requirements and give you a free consultation on the different options you can consider. I look forward to hearing from you.

Alastair Archbold 

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Sterling/Euro exchange rate forecast

Tuesday 17th February 2015 
In today’s report I’ll take a look at the Sterling/Euro exchange rate forecast, and also what data releases the rest of the week has in store and how they could affect exchange rates. Today the Pound has fallen against other currencies due to the lowest inflation figures on record.

Sterling/Euro 

The Pound/Euro rate has been repeating its recent trend of rising above the €1.35 mark, only to drop back away within days. This has happened again this morning, with the rate falling from €1.3550 to €1.3450 over the course of this morning. What’s been going on? 

Continued uncertainty over what is happening in Greece has continued to weaken the Euro, and that’s what keeps pushing the rate higher However with very low UK inflation numbers this morning, the Pound has fallen back away which is why GBP/EUR exchange rates have dropped. To be honest I think sooner or later, the Greeks will reach an agreement with the EU regarding its debts, and when this uncertainty is removed, the Euro could gain back some of its losses and bring GBP/EUR even lower. I personally don’t expect rates to stay at the €1.35 level for long. 

Supporting that view was this morning’s UK inflation figures. The rate of UK Consumer Prices Index inflation fell to 0.3% in January, its lowest level since records began in 1989. 

On the one hand, this does provide a respite for consumers in the UK and increase spending power so it’s good news. On the other hand however, it means interest rates in the UK aren’t going anywhere, and so the Pound has weakened off. 

(Low interest rates usually weaken a currency and it’s this fact that’s keeping the Pound in check.)

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What else could move exchange rates this week? 

Tuesday 17th February 2015  

This morning we had the latest inflation figures, and they were slightly worse than expected. This means it’s getting less and less likely that interest rates will be going up any time soon in the UK, and the Pound has fallen today by over a cent against the Euro. 

Wednesday 18th February 2015 

Today is an important one for Sterling, as at 09:30am we will see the latest unemployment figures, and the Bank of minutes. I expect the unemployment number to remain at 2.6%, but if it’s higher than this expect the Pound to fall and vice versa. The BoE minutes will be important as it will show if any of the Banks Monetary Policy committee voted to hike interest rates at their last meeting. I would expect this to show all members voting to keep rates on hold in light of the recent inflation numbers. 

Thursday 19th February 2015 

Nothing of note from the UK today, however the Eurozone has a monetary policy meeting and a consumer confidence release, that could affect GBP/EUR rates. The USA also has some important jobs and manufacturing numbers today, so we could also see changes in the Pound/Dollar rate. 

Friday 20th February 2015 

Today is another important one for Sterling as we have the latest UK Retail Sales numbers. I expect these to be around the 5.9% mark, and any deviation from this figure could cause the Pound to move against other currencies. Retail Sales figures are important as they are a good overall barometer of economic activity. 

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GBP/EUR, GBP/USD, and the weeks economic data

Monday 7th April 2014 
Exchange rates are relatively stable as we start the trading week. In today’s post I’ll have a quick look at where Sterling/Euro and Sterling/Dollar rates stand, and what the forecast is for the short term for whether Pound exchange rates will go up or down. As usual for a Monday, I’ll also list the week’s economic data releases that I think will affect the currency markets. 

Sterling/Euro 

In my post last week I explained that rates had shot up to just over €1.2100 after the ECB announced it discussed conducting a Quantitative Easing programme. Pound/Euro rates remain a little below the €1.21 level today, having dropped a bit through trading after one of the ECB members said that there was no need to take immediate action. 

I’m surprised the Euro didn’t weaken further, but this week we will see several speeches by ECB members. If they shed any more light on the subject and give us an idea how likely a QE programme is, Pound/Euro rates could well pick up further the more likely it seems that they are concerned about the Euro. 

I don’t think there’s much more to see in GBP/EUR getting too much higher however, due to the Bank of England not wanting the Pound to gain much more due to the effect it would have on our exports and in turn, the UK’s economic recovery. 

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Sterling/Dollar 

Looking at other currencies, GBP/USD rates have crept up today steadily throughout the day after jobs numbers from the states disappointed on Friday. This has caused the Dollar to weaken and we’re now back above the $1.66 level. 

These gains could be short lived though – if the ECB members comments this week do weaken the Euro, then an inverse effect of that would be a strengthening US Dollar and lower GBP/USD rates. This is because the USD is a safe haven currency, so worries in the Eurozone would cause investors to move back to the safety of the Dollar, strengthen it and making it cheaper to buy. 

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This week’s economic data releases. 

Monday 7th April 2014 - It’s been fairly quiet on the data front today, with the only noteworthy release being Industrial Production data from Germany, Europe’s largest economy. The numbers were a little better than expected, giving the Euro a little spike and pushing GBP/EUR rates lower, but not by much. 

Tuesday 8th April 2014 - At 09:30am we have the latest UK Industrial and Manufacturing production figures. These can often affect the value of the Pound. We will also see the latest NIESR GDP estimate released at 3pm. The last result showed growth of 0.8%, and if we see a higher number today, Sterling could gain. 

Wednesday 9th April 2014 - Another important UK release today, Trade Balance figures at 09:30am. The market is already expecting a negative number, but if the number is even worse than expected then Sterling could take a hit. Germany also releases its Trade Balance figures today. 

Further afield, the USA will release the minutes of their recent FOMC meeting at 7pm. I think that the US will keep tapering its QE programme this year, and if the minutes support this then expect GBP/USD rates to dip away as the greenback gains strength. 

Thursday 10th April 2014-  The Bank of England announces today if it will change its interest rates and QE programme – I expect rates to be left at 0.5% so don’t think it will affect exchange rates. 

Elsewhere, Australia releases a raft of unemployment data that could affect GBP/AUD rates. The US also have jobless figures, so Dollar rates could also swing today. 

Friday 11th April 2014 - After a very busy week for UK data, we end on a quieter note with nothing of interest from the UK. Germany has some inflation figures, as does the United States, along with a consumer sentiment survey, released at lunchtime. 

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What could move exchange rates this week?

Monday 24th March 2014 
Good afternoon. It’s been a pretty quiet day with not much change in exchange rates since my post last Thursday. Pound/Euro remains at €1.1950, and Pound/Dollar remains at $1.6500. 

With regards to whether Pound/Euro rates will recover any time soon, my view hasn't changed. I don't think it will go back through €1.20 unless we get some economic data that is significantly better than forecast. 

In the absence of anything new to move the markets, today I will list all the weeks’ data that I think might affect exchange rates this week. UK GDP data and a speech by ECB president Mario Draghi could both affect GBP/EUR exchange rates moving forwards. 

This week’s economic data releases that may affect exchange rates. 

Monday 24th March 2014 

Exchange rates have been relatively flat today, however we did see a raft of Inflation data from the Eurozone this morning. The figures were a little lower than expected, weakening the Euros and pushing GBP/EUR rates from 1.1940 to 1.1970, so a slight increase but not by much. 

Tuesday 25th March 2014 

I think the most important release today is a speech by ECB president Mario Draghi at 4pm. It was his recent comments that caused GBP/EUR to drop below the €1.20 mark. If he continues to be upbeat about the EU economy, rates could dip further. 

Other than that, we have UK Inflation, in the shape of the Consumer Price Index (CPI). I expect this to be around the 1.6% mark. Any higher will push Sterling up and vice versa. 

Over in the states we have consumer confidence figures and Home Sales data, both of which could affect the Pound/Dollar rate. 

Wednesday 26th March 2014 

There is nothing of note from the UK or EU today, so focus will be on US data. This includes Durable Goods orders, Bank Stress tests, Inflation numbers and mortgage approvals. 

Thursday 27th March 2014 

UK Retail Sales are released at 09:30am this morning. These are closely watched as they reflect overall economic health. The number will be around 4.3% I should think. If it’s lower than this then the Pound will fall, and if higher we could see Sterling get a boost. 

Elsewhere all data is from the States – Jobless Claims, GDP figures, Home Sales – expect a choppy day for GBP/USD rates. 

Friday 28th March 2014 

Today will be a key day for Sterling exchange rates, as we have the latest GDP figures from the UK showing how the economy is growing. Quarterly growth is forecast to be 0.7%, so any deviation from that figure will affect the Pound accordingly. 

Elsewhere it’s a busy day in the EU, with Economic sentiment indicators and German inflation data being release, but all focus will be on the UK GDP numbers. 

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Will Pound go up or down against Euro this week?

Tuesday 18th  March 2014
The Pound has fallen again today, dropping as low as €1.19 before settling at that level. There hasn't been any data of note from the UK today, so this is simply the market positioning itself ahead of tomorrows key day for the currency markets. 

What will affect exchange rates in the next few days?

The next 24 hours will be key for exchange rates, so the following information is important if you need to buy or sell currency at the best exchange rates. Firstly I will look at the key events, and what effect they may have on the market. I will then give my view on what effect this could have on rates, specifically the Sterling/Euro exchange rate. 

Later this afternoon at 17:45pm we have a speech by Bank of England governor Mark Carney. This could affect exchange rates depending on his comments. If he were to be very upbeat about the UK economy including growth forecasts, then we could see Sterling bounce back. What we're looking for is any hints that interest rates may have to rise, as this would strengthen the Pound. If however he does the opposite and indicates that a rate hike is some way off, then Sterling could fall.

Tomorrow morning at 09:30am we have 2 key releases. Firstly the Unemployment figures are released. If the number is 7.2% or higher, then expect the Pound to fall. If it's lower than this, then the Pound will likely rise in value. 

At the same time, the BoE releases it's minutes which show how they voted, and what was discussed, in their recent meeting to hold interest rates. Much like Carney's speech, we're looking for hints as to their policy on interest rates and growth. Positive comments will cause Sterling to rise.  We then have the Budget at 12.30pm. While this will generate the most headlines in the news, I think it will have little impact on exchange rates as I don't expect any surprises in terms of the UK economy.

So does this mean the Pound/Euro rate will go higher or lower?

Unfortunately it's impossible to predict which way the market will go. What I can do however is give my views on what's happening to help you make an informed decision on when to fix a rate. 

My personal view is that we will see the rate recover tomorrow. It's dipped for several days in a row now, falling from recent highs of €1.22 down to €1.19. The UK economy is still fundamentally strong, so I think the figures tomorrow will support this view, and I expect rates to be sat back at €1.20 by the end of this week. We'll have to wait and see whether I'm right or not! I don't expect it to break through €1.20 for some time though, as it's a key resistance level.

Having a good knowledge of the market can save you thousands it you need to buy or sell currency at the best rate. If I had to convert Euros to Pounds I would want to move quickly to take advantage of the current rate - it's the best it's been all year. 

If I was buying Euros, I would probably hold off to see what effect tomorrows data will have. I wouldn't want to risk losing out though, so I would do one of two things. I would either hedge my bets and secure half of my currency now, allowing me to take a risk on the other half. This reduces exposure to the market by 50%, but still allows you to take advantage of any rise. 

Alternatively, I would place a Stop Loss order, which lets you place a limit below which your exchange rate is fixed - €1.18 for example. In this way you can still take advantage of any gains in the rate, but have a safety net should the market keep dropping.

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Pound falls further in what is an important week for Sterling

Monday 17th March 2014 
Good afternoon everybody. The UK has been basking in unseasonable sunshine over the weekend, however Sterling has remained firmly in the shade. We have seen the Pound drop further today against the Euro and other currencies, ahead of what I think will be a key week for UK economic data releases, and therefore Sterling exchange rates.

Pound/Euro has fallen to 1.1940. Pound/Dollar remains in the mid $1.66’s. In today’s report I am going to run over the week’s economic data and how it might affect exchange rates. 

There are lots of very important releases this week that will affect the Pound, including a Bank of England report, the latest Unemployment data, and George Osborne's budget just to name a few.

• Will the Pound fall further?
• Could it bounce back? 
• How to know when to fix a rate? 
• Do you want to get the best exchange rates? 

The below data will determine the answers to these questions, so read on to find out more about how this week could affect you getting the best foreign exchange currency rates. 

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Contact me to discuss your currency requirement in detail. 

This weeks economic data releases that could affect exchange rates 

Monday 17th March 2014 

Today has been relatively quiet data wise, with only some EU inflation data released earlier this morning. The numbers were not that different to the forecast, and so didn’t affect GBP/EUR rates too much. 

Tuesday 18th March 2014 

GBP/EUR could be affected by the EU ZEW survey at 10am. Basically this measures economic sentiment and how investors see the economy. A high reading could strengthen the Euro and pull GBP/EUR rates lower. 

GBP/USD could also be choppy today, as we have a raft of inflation data from the USA at lunchtime. 

At 17:45pm there is a speech by the Bank of England governor Mark Carney. This could be very important. It’s impossible to know whether he will be upbeat and positive about the economy, but if he is it could cause the Pound to rise. Many think they he wants the Pound lower however, in order to help UK exports. So he may use this opportunity to talk the Pound down which would cause exchange rates to fall also. 

Wednesday 19th March 2014 

The most important day of the week for the Pound in my opinion. Firstly we have all the latest unemployment figures. I expect the figure to be at 7.2%. Lower than this would cause the Pound to rise, and vice versa. 

Along with unemployment we also have the latest BoE minutes which will show what was discussed and how they voted in their recent decision to hold interest rates. The key will be whether this report hints at a rate cut early next year or not, and this report is likely to affect Sterling one way or the other. 

At 12:30pm chancellor George Osborne delivers the budget report, so just how could the budget affect exchange rates? The last few haven’t really affected the value of the Pound at all, but it all depends what he says. As we’re getting closer to an election, I expect some positive noises, but nothing that will really surprise the markets, so it’s the unemployment and BoE data today that you want to keep your eye on. 

Late in the afternoon the USA has an interest rate decision and a press conference, so GBP/USD may also be affected today. 

Thursday 20th March 2014 

After yesterday’s incredibly busy day, things settle down a little. There is nothing of note from the UK or EU, but the USA does have some manufacturing data and a bank stress test in the afternoon. 

Friday 21st March 2014 

The latest UK Public sector borrowing figures are released today and is expected to come in at around £7.8bn. As always, if the number differs from this then the Pound may rise or fall accordingly. 

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