Pound falls away from recent highs

Tuesday 8th July 2014 
The Pound has fallen from its recent highs this morning, after figures showed Industrial and manufacturing production in the UK was much less than expected. 

Manufacturing output in the UK recorded a surprise fall of 1.3% in May, the biggest decline since January 2013. The figure from the Office for National Statistics (ONS) was much weaker than economists' forecasts of an increase of 0.4%, and as a result the Pound fell by around 0.5% against other currencies including the Euro. You can see the drop in the chart below when the figures were released at 09:30am; however rates have recovered back to €1.26 against the Euro, and $1.7120 vs the US Dollar. 

So why exactly did the Pound fall? 

Regular readers will know that it is speculation on UK interest rates that has been driving the Pound upwards recently. Today’s figures are a bit of a reality check for the UK after a few months of very positive data. The markets see today’s figures meaning there is now less chance of an interest rate rise before the end of the year. 

The rumour of higher interest rates has been driving investment towards the Pound due to the higher potential return. Today’s figures mean it’s less likely, and so the Pound has fallen slightly. 

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I update this blog to keep my existing and potential clients up to speed with what is happening with exchange rates. I am a senior currency broker for one of the UK’s leading foreign exchange companies, and I can help you achieve exchange rates that are up to 5% better than banks or other brokers can offer. 

It’s a good time to look at exchanging currency given the current rates are at multi-year highs. 

If you are buying or selling property abroad, topping up your Euro account, or a business that buys or sells in a foreign currency, I can help you. Click below to send me a free no obligation enquiry. If you need to move £1k to £50m on a bank to bank transfer basis, you may be surprised how much you can save. 

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Alastair Archbold

Pound/Euro exchange rate forecast Nov '13

Friday 15th November 2013 
Pound/Euro rates continue to be pulled in both directions, however the levels remain just under €1.20 which is around the best it’s been since January. So what has been happening since my last post that has caused the rate to fluctuate? 

Well in my last post I showed that the Unemployment and Bank of England data releases on Wednesday had caused the Pound to strengthen and pushed rates higher. To illustrate how volatile the rates are at the moment, these gains were short lived and on Thursday morning we saw the Pound fall back away due to lower than expected UK Retail Sales. 

This slump itself was short lived however, as also yesterday we saw some disappointing EU growth figures that weakened the Euro and pushed the GBP/EUR rate back up again. 

 

Eurozone growth slows, pushing GBP/EUR higher

Yesterday official figures showed that the Eurozone economy grew by just 0.1% in the July-to-September period, down from 0.3% growth in the previous quarter. The European Central Bank (ECB) last week cut its benchmark interest rate to 0.25% in an attempt to give some impetus to the fragile recovery. 

The worse than expected numbers caused the Euro to weaken, become cheaper to purchase, and therefore the Pound/Euro rate rose. 

This week has really shown how susceptible exchange rates are to economic data releases, and the immediate effect these releases can have on the price of a foreign currency.

Make a free enquiry and find out more about how I can help you.

What is likely to happen to exchange rates in the coming weeks? 

This will depend on the next round of economic numbers. On Monday I will post a full review of all of next week’s data releases, to keep you informed on what is happening and how the data could affect exchange rates.  
 Over the last week I have correctly predicted that the EU inflation numbers, Bank of England report and UK Retail Sales would be the main movers of currency rates, and that is exactly what we saw. 

Of course nobody can predict exchange rate movements or forecast which way a currency will go, however what I can do is explain the factors that will move the exchange rate you’re interested in, and also provide you with the options you can consider, so that you can make an informed choice on what to do and when to do it. 

In addition the market knowledge I have, the exchange rates I can source are commercial levels that are usually much better than you can achieve elsewhere. So if you need to buy or sell currency, and getting the best exchange rate is something that interests you, then send me a free enquiry today.

It costs nothing to make an enquiry, carries no obligation, and you may well be very surprised how much you could save. 

Click here to send me a free enquiry now. 

I look forward to hearing from you. Have a great weekend.

 Alastair Archbold