Pound/Euro exchange rates drop back below €1.30

Wednesday 21st January 2015
Today we have seen economic data that has pushed the GBP/EUR rate back below the key €1.30 level. Let’s take a look at why the Pound has fallen against the Euro, and which way the currency pair may move in the coming weeks. 

UK Unemployment and Interest Rates 

At 09:30am this morning the latest UK Unemployment figures were released, showing a drop to just less than 2 million, which is the lowest level for more than six years. However there are signals that growth in employment may be easing, as this drop is the smallest since the three months to September 2013. 

Also this morning we saw the Bank of England keep interest rates on hold, as expected, but what was surprising is that all 9 members voted to keep the status quo. Martin Weale and Ian McCafferty, who since August had called for a hike in rates, seem to have changed their mind. As all 9 members voted, it now looks like interest rates won’t be going up in the UK until mid-2016, and as a result the Pound has weakened off. 

ECB to conduct QE 

2 European Central Bank (ECB) officials today said that they will indeed pursue a Quantitative Easing programme, to the tune of €50bn per month for the next 2 years. The actual announcement is tomorrow and is widely expected to happen, but today’s comments have caused the Euro to strengthen, and coupled with the UK news I mentioned earlier, pushed GBP/EUR rates below €1.30: 

So why has the Euro strengthened if QE is going to happen? 

The market had already priced in the expectation of QE. The actual announcement however goes further than analysts had been expecting, as most thought that a 1 year programme would be announced. As today’s comments hint at a much longer QE programme, it seems that the market has taken this as a positive sign as the Euro has gained strength across the board this afternoon. It could also be the case that the expectation had been overly priced into the market and now the reality is here, there has been a correction and the 7 year GBP/EUR high seems to have been short lived. 

What next for Pound/Euro? 

We could see further movements tomorrow when the markets react to the actual announcement, however while in general I expect the Pound to keep outperforming the weakening Euro, I can’t see any further significant gains given most of Sterling’s recent strength was on the expectation of interest rates going up , which is now unlikely to happen soon. 

 So with the GBP/EUR rate at the key €1.30 level, it’s a good time for those that need to buy or sell Euros to take stock of their requirement and decide when to fix a rate. Click here to send me a free no obligation enquiry today, and I can get in touch to provide you a quote on the rates I can provide, and discuss the options you have to protect against the rate moving against you. 

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Sterling rises by over a cent after inflation figures released

Tuesday 13th January 2015 
The Pound has risen well against both the Euro and US Dollar today, pushing GBP/EUR up 1 cent to close to €1.29, and GBP/USD also rose a cent to $1.5165. The rise in exchange rates comes after figures this morning showed that inflation in the UK has fallen to 0.5%, the lowest level on record. 

Why has the Pound risen on the low inflation figures?

The low inflation means that interest rates are very likely to stay on hold for some time to come. Usually this would weaken a currency, so why have the low inflation numbers caused the Pound to rise? 

It’s because the fall is seen as generally good news for the UK economy. Recent figures already indicated that interest rates are likely to stay on hold this year, so today’s figures haven’t changed that view, and that’s why the Pound didn’t fall. What the figures do mean is that spending power in the UK has increased, and this in turn should spur the economy as a whole as people have more disposable income, so things like Retail Sales should go up as people feel more confident in the UK’s economic recovery. 

It should be noted however that the GBP/EUR rate in particular keeps getting to these levels, before dropping back off again. This trend has repeated itself many times over the last 12 months. Those with Euros to buy should therefore consider taking advantage of the current levels, which are after all around the best they have been in over 6 years. 

Those converting Euros to Pounds however should be cautious, as any further indication of monetary stimulus in the Eurozone could well weaken the Euros buying power. 

Getting the best possible exchange rates.

If you have a currency transaction to perform over the next 6 months, get in touch with my by completing the enquiry form here. I can provide you a very competitive quote, discuss the current state of exchange rates, and run over the various options you can consider to ensure you make the most of your currency. 

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Sterling continues to fall against other currencies

Friday 14th November 
The sterling sell off continues this week, as expectations of an interest rate hike in the UK are pushed back. The chart below shows how the rate has moved over the last few days:

There hasn’t been any further data to cause the drop, and the fall is purely investors continuing to dump the Pound due to the fact interest rates are not going up any time soon, as I outlined in my last post on Wednesday. 

The drop has been quite significant. Purchasing €250,000.00 today compared to Friday morning would cost you £4,400.00 more, purely due to exchange rate movements over 2 days. This demonstrates how quickly things can change, and how important it is to get your timing right with regards to when to fix your exchange rate. 

Getting the best exchange rates 

If you need to buy or sell any international currency on a bank to bank transfer basis, then get in touch with today by clicking here. I can discuss what is happening with exchange rates, the forecasts where experts expect the rate to go in the coming weeks and months, and provide you a quote to compare with your bank or existing broker. 

It’s free to make an enquiry, and you could save thousands of Pounds by achieve a better exchange rate. 

Click here to make a free enquiry today.

Pound falls as interest rates set to remain low for rest of the year

Wednesday 13th August 2014 
As you can see from today's Pound/Euro graph below, Sterling has plummeted today by around 1% against other currencies on comments made by the Bank of England governor Mark Carney, effectively signalling that interest rates are to remain low for the rest of this year. In my post yesterday I warned that if he was dovish about the UK economy then exchange rates could fall, and this is exactly what we have seen happen today. Let’s take a closer look at what he said and why the Pound has fallen against the Euro. 

What did Mark Carney say in his speech? 

 
The Bank of England has halved its forecast for average wage growth, and the Bank's latest quarterly economic forecast also indicated that it believed the level of spare capacity in the UK economy has narrowed to around 1% of GDP. 

Mr Carney said there were still "a lot of uncertainties to contend with" given record participation in the jobs market, "remarkably weak" wage rises and a rising number of threats to the global economy.   

He said that whenever interest rates did increase, they would still do so gradually. Chris Williamson, chief economist at economic data firm Markit said it is was likely that "calls to raise interest rates would start to gather strength in coming months," but that an interest rate rise still looked some way off.

Read a full outline of his comments here.

What does this mean? 

Effectively he is saying that as wages aren’t growing fast enough, there isn’t enough spare capacity in the economy to allow a raising of interest rates. This means that it is likely interest rates won’t be going up anytime soon, and when they do they will only rise very gradually.

Why has this caused the Pound to fall? 

Sterling has been strong recently on speculation interest rates will be going up, as this drives investment into the currency due to the potential higher return on offer. Today’s comments indicate that rates will remain at their record low of 0.5% for some time to come. This means that investors have sold the Pound for currencies that offer a higher return, and the sell-off has caused the Pound to weaken and exchange rates to move down. 

What does this mean for your currency requirement? 

The currency markets are very volatile, and when converting large sums even a small movement in the rate can end up costing you thousands. The service I provide is twofold. Firstly you can have a free no obligation chat with me about the exchange rate, and I can explain what is moving the rate and discuss which way it could move in the future. In this way you can make an informed choice on when to fix your exchange rate. 

When the time comes to fix a rate, I can provide commercial exchange rates that are significantly better than banks offer, by as much as 5%. This means that I can save you thousands of Pounds when converting one currency to another. 

If you need to convert funds and would like to discuss what is happening with rates, and obtain a quote to compare with your bank to see how much you can save, click below to send me a free no obligation enquiry today. It is free to make an enquiry and does not obligate you in any way. 

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GBP/EUR rises to €1.22 after BoE Inflation report

Wednesday 12th February 2014 
Sterling has gained significant strength today following the Bank of England’s inflation report, and the press conference by Governor Mark Carney that followed. In today’s post I will look at exactly what he said, the effect it had on Sterling exchange rates, and what may happen to currency rates in the coming weeks. 

Pound gains strength on Mark Carney’s BoE speech. 

This morning at 10.30am the Bank of England published its quarterly inflation report, and this was followed by a speech from the BoE governor Mark Carney. You can read a full report on his comments here on the BBC website.

In effect the speech caused the Pound to rise against other currencies by around 1%, pushing GBP/EUR rates to €1.22 and GBP/USD up to $1.6550 – excellent buying levels for both currencies. 

The main reason for the gain was an increase in the UK’s growth forecasts. The Bank revised up its projection for UK growth to 3.4% this year, from a previous projection of 2.8%. This gave Sterling a nice boost and caused exchange rates to rise. You can see from the chart below the effect it has had so far on Sterling/Euro:

So is the Pound likely to go up or down in the coming weeks? 

The Pound will likely remain strong at current levels, so the direction of exchange rates, GBP/EUR in particular, will now rest on what happens in the Eurozone. European growth is quite poor, and there is the chance they may have to cut rates. This could cause the rate to rise further. 

This afternoon at 15:30pm there will be a speech by the ECB president Mario Draghi. If he hints at a rate cut, Pound/Euro may rise higher still. If however he hints rates will remain low for the time being, we could see the spike today retract back to the €1.20’s. 

There is also the persistent strength of sterling which adds to the BoE’s challenges. If the Pound gets much stronger and the Eurozone continues to face problems, it’s going to affect our exports which means any further gains could be limited as the BoE moves to keep in check any significant rise in the Pound. 

Carney also said that interest rates in the UK will remain low for some time to come, adding that while he wouldn’t be a pessimist about the ability to return to (normal) rates, it is well beyond the forecast horizon of the Bank of England. 

What can you do if you need to buy or sell Euros? 

Euro buyers should look at today’s gains and consider that we are less than 1 cent away from a 13 month high. We’ve got to these levels several times in the last few months, and each and every time the rate drops back away within several days. You may wish to fix a rate now to take advantage of the gains. You can do so even if you don’t need your Euros for up to 2 years, by lodging 10% of the total you want to convert, and I can guarantee your rate on the full amount. 

If you are selling Euros and moving them back to Sterling, then today’s events have pushed rates the wrong way for you. I don’t expect the mid-market level to drop below €1.20, and bad news for the Eurozone would cause rates to move further against you. A stop loss order is a good strategy to employ in the current conditions. 

Get in touch to discuss your options. 

How to go about getting the best rates, at the best time 

The first step is to get in touch with me to take advantage of a free consultation over the telephone. I can discuss your particular requirements and timescales, and then let you know the different options you can consider, such as Stop Loss Orders and Forward contracts. You can then make an informed decision on when to fix a rate. 

When you decide to do so, I can provide you a quote to compare with your bank. The rates I can source are up to 5% better than banks usually offer, so you can save a considerable sum by taking advantage of my services. 

Click here to send me a free no obligation enquiry now. 

Alastair Archbold.

Pound/Euro falls: August 2012 forecast

Wednesday 1st August 2012
Good morning. Today I'll give a quick mid-week update on what's been happening in the currency markets in the run up to tomorrows policy decisions by the Bank of England (BoE) and European Central Bank (ECB), after we saw Sterling/Euro rates take a tumble throughout trading yesterday.

Pound/Euro rate falls on positivity from EU leaders

This week we have seen some robust comments from EU leaders that the EU debt crisis will be tackled, and this has strengthened the Euro and pulled exchange rates down. So what was said?

French President Mr Hollande said they agreed that the euro should be "defended, preserved and consolidated" and added there had been "significant progress" in recent weeks. Italy's Prime Minister Mario Monti has said he sees "light at the end of the tunnel" on the eurozone debt crisis.

As well as his meeting with Mr Hollande, Mr Monti is also travelling to Finland and Spain, and he said he hoped his meetings would help "secure the euro and give a decisive boost to European growth".

Over the weekend, a joint statement from Chancellor Angela Merkel and French President Francois Hollande was thought to indicate that Germany had softened its opposition to using the ECB and European bailout funds to buy government debt.

The comments have caused the Euro to strengthen and pull GBP/EUR rates down over a point yesterday as the graph below shows.
















So what does it all mean?

These comments come amid speculation in recent days that European authorities are set to take action to lower borrowing costs for Spain and Italy. Tomorrow we have the BoE and ECB decisions on monetary policy. The ECB meeting is now expected to overshadow policy decisions by the Bank of England and the Federal Reserve after last week's pledge by ECB President Mario Draghi to do "whatever it takes" to protect the euro.

If the ECB delivers credible measures, it could boost investor appetite for taking on risk, helping sterling against the dollar, but if it disappoints markets it could lead to sharp falls in the euro and other trades perceived as higher-risk.

So we all await what will happen on Thursday. Expect volatility in GBP/EUR rates - if the markets think action taken is good news, expect Pound/Euro to fall further. If however it's just a case of them kicking the can further down the road, then I think rates will climb back up.

Getting the best exchange rates

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Pound/Euro falls March 2012 forecast predictions

Friday 9th March 2012
Good morning. Why has Pound/Euro fallen? Yesterday the Pound fell against the Euro, and rose against the US Dollar. It was developments in Greece and the EU that drove rates, with renewed optimism over the EU economy strengthening the Euro and other riskier currencies such as Sterling. So, the Pound gained against many currencies, but fell against the Euro, as the charts below illustrate:

~Currency Movements on Thursday 8th March 2012~











Euro strengthens on optimism over Greece

The Euro gained strength yesterday, becoming more expensive to purchase. It was due to Greece making progress on their debt swap. Analysts said the euro may have scope for short-term gains on a positive outcome to the Greece deal.

As the market focused on events in Greece, European Central Bank President Mario Draghi said there were signs of stability in the euro zone economy, and basically stated Greece would be allowed to default if necessary. This gave renewed optimism about the EU economy, and as such the Euro gained strength, along with other riskier currencies such as Sterling. This is why Pound/Euro exchange rates have fallen March 2012.

ECB and BoE leaves interest rates on hold

As I predicted yesterday, both central banks left rates on hold, and the BoE decided not to pursue any further Quantitative Easing for the time being. It's what the market expected, and so the decisions had little effect on exchange rates.

Going forwards, I think that at some point later this year, the ECB will make a rate cut which could weaken the Euro. Also the minutes to the BoE decision in 2 weeks time, will shed more light on if and when more QE will be on the way.

Today's Data

We end the week with a host of UK data including the latest GDP estimate, Trade Balance, Industrial Production, Manufacturing Production and Producer Price Index figures. Germany also releases Trade Balance numbers and inflation data. Stateside there are unemployment data and more trade balance figures - also we have the all important non farm payrolls, which often has a big effect on GBP/USD rates.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Crucial day for exchange rates: Euro, USD, AUD

Friday 9th December 2011
Good morning. It was a very choppy day indeed in the currency markets yesterday, with an interest rate cut in the Eurozone and negative comments by the ECB president weakening the Euro and strengthening safe haven currencies. We saw Sterling/Euro rates gain however Sterling/US Dollar rates dropped significantly, as the charts below show:

~Currency movements yesterday~











Bank of England leave rates and QE on hold

Yesterday the Bank of England's (BoE) Monetary Policy Committee (MPC) voted to keep interest rates on hold at 0.5%, and announced no change to its Quantitative Easing (QE) programme. There was little reaction in the currency markets to the rate decision given many investors had already positioned for it to be unchanged. As the decisions were as predicted, there was no real change for the Pound, however there probably will be more QE in the coming months, putting Sterling at risk.

"There will be more asset purchases at some point next year, the UK economy is definitely fragile and needs easing," said Ankita Dudani, G10 currency strategist at RBS.

QE is seen as negative for sterling because it involves flooding the market with pounds and reducing demand, thus lowering exchange rates.

European Central Bank (ECB) cut interest rates

The ECB yesterday decided to cut interest rates down to 1%. This was widely expected, and there was little effect on the markets, and in fact the Euro gained a little strength after the decision. This was not to last however, as the ECB presient Mario Draghi ruled out any substantial aid for any ailing and indebted eurozone states, and this had quite an impact on exchange rates. Mr Draghi confirmed that the decision was not made unanimously.

ECB President's comments significantly weaken the Euro, strengthen the US Dollar

There had been speculation amongst analysts that the ECB may be preparing to bail out Italy, however Mr Draghi ruled this out during the post interest rate decision press conference: "We have a treaty that says no monetary financing to governments."

The euro weakened significantly as soon as he made the comments, and fell more than a cent against the dollar, while Sterling/Euro rates rose on the news. Looking at the charts above, you can clearly see the effect of his comments around 1pm. Sterling/Euro rose as the single currency weakened, and this also drove investors to the safe haven US Dollar. When there is uncertainty, investors buy the US Dollar, and this in turn strengthens it becoming more expensive to purchase. The charts reflect this and this also explains why GBP/EUR rose while GBP/USD fell.

EU summit ends today

The moves from the ECB yesterday come ahead of a "do-or-die" Brussels summit of European Union heads to hammer out a deal on how to tackle the eurozone debt crisis, including a potential new treaty. The 2 day EU summit ending is expected to agree tough new rules and automatic fines to ensure that eurozone governments cut their borrowing to below 3% of their GDP.

There is a very good and detailed article here on the BBC website that explains the ins and outs of the summit.

So what effect will the EU summit have on exchange rates?

The short answer is nobody knows. If the summit agrees on measures that the markets think will put an end to speculation on the future of the Euro, then we could see the Euro strengthen and GBP/EUR rates falling. If however there is no consensus reached, this could leave the markets wondering what will happen with countries like Greece and Italy.

If Greece were to default and exit the eurozone the consequences could be dire; a run on Greek banks, contagion spreading to other eurozone banks and Greeks facing even worse hardship than now, with the cost of imports rocketing. The priority is to reassure investors enough to halt the rise in eurozone bond yields. The leaders believe they can do that, so long as heavily indebted countries like Greece stick with deep cuts in spending and other austerity measures.

With regards to exchange rates, tomorrows developments will likely have an effect one way or the other. Put simply, if problems are solved, GBP/EUR could fall and GBP/USD could rise. If there is continued uncertainty, GBP/EUR could remain supported and GBP/USD could fall further.

What you should do to ensure you get the best exchange rates

You've already taken the first step by finding my blog and doing a little research on what may happen with exchange rates. I have worked in the Foreign Exchange markets for 10 years, and have a detailed knowledge of the currency markets. I also work for one of the UK's leading FSA registered foreign exchange brokerages, and the rates we can achieve for our clients are up to 5% better than banks and other financial institutions.

So, take the second step to making the most of your currency:

Click here to send us a free enquiry.

There is no cost or obligation involved, and you can take advantage of a free consultation on your particular requirements, helping you to make an informed decision on when to buy. As long as you are looking to convert £5000 or more, and can have an account for us to wire your currency to, we can help. Get in touch today.

Effect of Quantitative Easing on Exchange Rates

Thursday 6th October 2011
Good morning. Sterling exchange rates rose a little yesterday morning after a UK services sector survey data was better than expected. Gains were short lived however, as the Pound remains under pressure on growing expectations the Bank of England will soon announce further quantitative easing to boost the economy, this could happen today. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1578
• GBP/USD 1.5429
• GBP/AUD 1.5937
• GBP/NZD 2.0102
• GBP/CHF 1.4298
• GBP/CAD 1.6065
• GBP/ZAR 12.243
• GBP/JPY 118.30
• GBP/DKK 8.6177
• GBP/NOK 9.0613
• EUR/USD 1.3319

Could the Bank of England announce Quantitative Easing today?

Data yesterday showed UK economic growth is almost non existent. The revised GDP figures showed the economy is pretty much at a standstill, and has been now for 6 months. This increases the case for further Quantitative Easing, which many analysts believe will happen if not today, then in November.

Pumping money into the economy would help keep interest rates low and boost the economy, however it would also flood the market with Sterling and this could push exchange rates lower. Most analysts believe they will have to pursue more QE, and this could be announced today. There are some that believe that the BoE may wait until November, by which time there will have been another round of economic data to help them in their decision.

The fact remains however that it really is a question of when, not if, they announce further QE. It is this that has been keeping Sterling on the back foot, and the reason many in the markets believe Sterling is at risk of a correction to the downside.

EU debt crisis; what next?

The debt crisis is now turning into a banking crisis, with so many UK and EU banks exposed to Greek debt, this has been causing problems in the global economy. Italy has had it's credit rating downgraded, the IMF say they may step in to assist, leaders have delayed a decision to give more money to Greece - all in all there is a considerable lack of direction in the Eurozone.

These problems have weakened the Euro, and this is the reason GBP/EUR rates are not down in the €1.10 or below territory. Today the ECB will announce their decision on interest rates, but it's likely there will be no change.

What is important, is the press conference after the decision. This is where the president of the ECB gives his thoughts on the economy. Last month his comments caused significant changes in GBP/EUR so we will be watching closely today to see what impact his comments may have.

What you should do if you need to buy or sell currency

With markets extremely volatile for all the reasons above, exchange rates are very susceptible to any changes in economic figures. With so much happening at the moment, exchange rates could move either way by a significant amount. Rather than just hope rates move your way, there are various strategies you can employ to ensure you don't lose out.

Stop Loss and Limit orders allow you to place upper and lower limits in the market, so should exchange rates move up or down, your currency is bought at a pre-agreed level. In this way you can still take advantage of any gains in the rate, but not lose out should rates fall away.

You could also look at Forward contracts, where you can fix the current rate for up to 2 years, and only lodge 10% of the total now, allowing you to budget effectively for any purchase.

To discuss these types of contract, fill in the enquiry form now and send us a free enquiry. We can then discuss your particular requirements and put a strategy in place so you can take control over your currency requirement. Take control of your currency exchange, and don't let the markets control you!

Remember, our exchange rates are up to 5% better than you can get at the bank, so for any international transfers you need to do, make the most of your currency by contacting us now.

Sterling falls on rumour of more QE

Thursday 8th September 2011
Good morning. Sterling has fallen to an 8 week low this morning against a basket of currencies, on speculation the Bank of England (BoE) may have to pursue more Quantitative Easing (QE) to try to stimulate growth in the economy. We have interest rate decision from the BoE today, and if they do indeed announce QE then Sterling could drop further. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1326
• GBP/USD 1.5934
• GBP/AUD 1.5040
• GBP/NZD 1.9138
• GBP/CHF 1.3727
• GBP/CAD 1.5705
• GBP/ZAR 11.372
• GBP/JPY 123.22
• GBP/DKK 8.4343
• GBP/NOK 8.5712
• EUR/USD 1.4063

Sterling falls on rumour of further Quantitative Easing

Due to continuing poor data showing growth is slow in the UK, many analysts think that the BoE will have no choice other than to pump more money into the economy through Quantitative Easing. A Reuters poll on their website today shows economists expect there is a 35% chance the BoE will resort to another bout of asset purchases to support the flagging economy.

However, London traders said some in the market were positioning for the possibility the BoE may announce more stimulus on Thursday, given persistent signs of a slowing economy in the past month. More quantitative easing would be negative for the pound as it would flood the market with the currency, reducing demand. If they do announce it today at 12:00pm then expect exchange rates to drop.

Interest Rate decisions today

Both the UK and EU announce interest rates decisions today at 12:00pm and 12:45pm respectively. We expect both zones to leave rates on hold at 0.5% (BoE) and 1.5% (ECB). As mentioned above however, we will watch for any mention of QE that could hurt the pound.

In the EU, while we expect no change in rates, they give a press conference at 13:30pm and often the comments made can significantly influence the value of the Euro.

If you need to buy or sell foreign currency at the best exchange rates, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Interest Rates and effect on Exchange Rates

Thursday 4th August 2011
Good morning. Services sector data yesterday gave Sterling a boost against the US Dollar and Euro, but gains were limited as concerns remain about the fragility of the UK economic recovery, particularly after data earlier this week showed manufacturing activity contracting. Today we have the BoE and ECB interest rate decisions. At 08:30am this morning rates are as follows:

• GBP/EUR 1.1450
• GBP/USD 1.6361
• GBP/AUD 1.5330
• GBP/NZD 1.9196
• GBP/CAD 1.5797
• GBP/ZAR 11.070
• GBP/JPY 130.31
• GBP/DKK 8.5289
• GBP/NOK 8.7929
• EUR/USD 1.4285

Swiss Cut Interest Rates

Yesterday the Swiss National Bank unexpectedly cut interest rates to stem a sharp appreciation in its currency, causing several currencies such as the Euro to spike higher. With the problems in the US, the Swiss France is a safe-haven currency and had become very strong, so they had to intervene. This caused GBP/CHF rates to rise from 1.24 to 1.2730.

UK Interest Rates today

Generally disappointing UK data has added to the view that UK interest rates will remain at a record low for a prolonged period, while some have suggested more quantitative easing (QE) may be needed to revive sluggish growth rates. Today at lunchtime the BoE will announce their decision, but it's widely expected rates will again be left on hold. If however they announce any further QE, we could see the Pound fall. This is unlikely however.

Investors have steadily priced out the chances of a rate hike and are not expecting an increase in 2012, whereas late last month they expected a rate rise in November 2012. This is keeping Sterling weak compared to other zones with higher rates.

EU Interest Rates

The ECB also announce their decision, and we expect rates to be left on hold. They have already raised rates twite this year, and there may be further hikes which may strengthen the Euro slightly, making it more expensive to purchase.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.