Why has Pound/Euro risen to €1.38?

Pound/Euro surges on ECB comments 

In my last post on Tuesday, I said that today’s ECB press conference would be key to GBP/EUR rates, and that if there were hints they would extend their stimulus programme, the Euro could weaken and GBP/EUR rates would rise. This is exactly what we have seen happen today as they said that their Quantitative Easing programme would need to be re-examined. Look at the effect it has had on GBP/EUR and GBP/USD in the charts below: 

Pound/Euro rises by 2 cents: 

 Pound/Dollar drops by 1 cent:

ECB to re-examine its stimulus programme 

Inflation is low in the EU, but they can’t cut interest rates as they are already at 0.05%. As I’ve been saying recently, the only clear solution is to increase their QE programme. Today, the ECB president said that "The asset-purchase plans are proceeding smoothly and continue to have a favourable impact," adding that "The degree of monetary policy accommodation will need to be re-examined at our December meeting." 

What does this mean? In a nutshell this means more Euros will be pumped into the economy later this year, and as such the Euro has weakened significantly and is cheaper to buy. 

The news has also affected GBP/USD rates, as investors dumping the Euro have instead purchased the US Dollar, causing it to gain strength and become more expensive pushing GBP/USD rate lower by 1 cent. You can clearly see the 'inverse correlation' in the charts above, as at 13:30pm when the news broke, the graphs move in opposite directions. 

Do you have currency to convert? 

Those needing to buy Euro should consider taking advantage of this spike in rates we have seen today. It could go higher of course, but usually a large spike such as this is short lived, and recent gains haven't lasted very long, so while impossible to forecast, I expect rates to drop back away by the end of the week. 

Do you need the best exchange rates? 

If you would like to discuss the currency markets to help you decide when to fix an exchange rate, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today. 

I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it's certainly worth getting in touch to see what I can do for you. 

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Pound/Euro exchange rate forecast

Sterling/Euro rates fall ahead of ECB meeting this week 

Pound/Euro rates have recovered in the last week, partly due to some positive UK employment data, but also due to speculation the European Central Bank (ECB) may announce further stimulus this week. Interest rates there are as low as they can go (0.05%), and in order to ward of the threat of deflation, they may have to increase their stimulus measures. I don’t think they’ll announce anything on Thursday, but it’s important to listen out for any hints the ECB president Mario Draghi may give in his press conference. 

To me it’s quite obvious that their QE programme will need extending, and that’s why the Euro has been weakening off in recent days as this eventuality gets priced into the market. However today the market starting correcting itself, pulling GBP/EUR back down to around the €1.36 level as you can see from the chart below. If he does hint at further measures, there may be a short term spike in GBP/EUR rates. 

If you need to buy Euros, then it’s worth looking into placing a ‘Limit Order’ to take advantage of any spike we may see. This works by placing a target level with me that may be above the current rate. If the market does spike and your level becomes available, your trade is executed automatically and your currency is purchased. 

What else could affect exchange rates this week? 

Wednesday 21st October 2015 – Today the UK government releases its Public Sector Borrowing figures, which show the amount of debt they hold. The last release showed a deficit of £11.3bn, and today I expect this number to be around £9bn. If it’s higher than this, then Sterling exchange rates could fall, and vice versa. Later in the day there is another Speech by BoE Governor Mark Carney, and any hints about UK interest rates could also affect the Pound. Elsewhere, those with an eye on GBP/CAD rates should look out for the Bank of Canada’s (BoC) rate decision and policy statement. 

Thursday 22nd October 2015 – It’s quiet in the UK today, but over in the Eurozone we have the European Central Bank (ECB) decision on interest rates. As I mentioned at the top of this report, while it’s highly unlikely interest rates will change, the press conference at 13:30pm is very important for Sterling/Euro buyers, because there may be hints at further stimulus in the EU. If that proves to be the case, expect the Euro to weaken pushing GBP/EUR higher. Elsewhere, the USA has Jobless data and House Price info. 

Friday 23rd October 2015 – Nothing for the UK today, but GBP/EUR could be affected by EU and German inflation numbers. Canada and the USA also release inflation numbers today that could affect GBP/CAD and GBP/USD respectively. 

If you would like to find out more about what moves exchange rates, or would like a quote on your exchange, then send me a free enquiry by clicking below. 

Contact me to discuss your currency exchange and get a quote. 

Sterling/Euro rises from €1.3350 to €1.3550

Thursday 15th October 2015 
Sterling/Euro rates have recovered very well in the last few days, rising from the €1.33’s to €1.3550 today. In today’s post I’ll explain the reasons for the gains, and what action those with Euros to buy or sell can take to help achieve the best exchange rates. First, a quick look at this week’s GBP/EUR graph: 

Why have Sterling/Euro rates risen? 

As you can see from the chart above, early in the week Sterling/Euro fell to €1.3350, the lowest it’s been since February. As I explained in my recent post, the drop was due to very low inflation numbers that weakened the Pound. 

Since, then we’ve seen the rate gain nearly 2 cents to €1.3550, so what’s been going on? Yesterday morning it looked like the Pound would continue to drop, as UK jobs data was released at 09:30am. The Claimant count was pretty dire, and showed that there were nearly 7000 more people claiming benefits than forecast. The Pound fell to €1.3350 on the news, but quickly recovered. 

This is because when you actually look at the figures in more detail, you see that the number in work actually rose by 140,000, bringing the employment rate to 73.6% - the highest rate since records began in 1971. This caused the Pound to gain, and in addition, wage growth has gathered pace much faster than the Bank predicted earlier this year, and this may allow the Bank of England to deliver the first hike in May next year, according to the chief economist at BNP Paribas. 

This morning, European Central Bank policymaker Ewald Nowotny said that it was now "obvious" the bank must do more to stimulate the euro zone economy. This signals further Quantitative Easing may be required in Euro, and the single currency has weakened further this morning pushing rates up to the mid €1.35’s. 

Do you have Euros to buy or sell? 

Many clients that had Euros to sell that read my post on Tuesday decided to fix a rate then, and that was a prudent move given the rebound we’ve seen. If you look back at the movements in GBP/EUR this year, you can see the rate has dropped to €1.35 several times, and every time it’s bounced back. This is what we’ve seen happen again this week. 

In contrast, it’s a difficult time for Euro buyers unsure whether to wait to see if rates will recover, or just get the rate locked in now to protect against a further decline. Nobody can foresee whether rates will recover as they did earlier this year, or if the recent trend of Sterling weakness will continue causing rates to drop back away again. It’s important to remember that past performance is not indicative of future trends, however it’s the most salient data that many with a currency transaction to perform will rely on. 

But simply looking at the trend and hoping things will get better could end up costing you dearly. A more proactive approach would be to ensure you are fully informed of both what is moving the market, and the contract types at your disposal to help you take advantage of any spikes we may see in the exchange rate. 

I would welcome the opportunity to speak to any clients about the currency markets, discuss your requirements, assess your needs, and help you to make an informed decision on when to fix a rate. Click below to get in touch, and I will get in touch personally to explain the mechanics of how our service works. 

Click here to send me a free enquiry today. 

Why has Pound/Euro dropped to €1.36?

Wednesday 23rd September 2015 
Today the much anticipated speech by the European Central Bank (ECB) president Mario Draghi has caused the Euro to gain strength, and this has pushed Pound/Euro rates down to around €1.36 which you can see from the chart below: 

What did Drahi say that caused the Pound/Euro rate to drop? 

In recent days there was speculation that the ECB may either increase their Quantitative Easing programme, or announce a cut in interest rates in order to combat a potential slowing of the Eurozone economy. The market had been partially pricing this into the value of the Euro over the last few days, which is why the Pound/Euro rate had recently hit nearly €1.39. 

For me there was one key part of his speech that caused the Euro to strengthen, pushing exchange rates lower: 

“I am aware that many of you closely scrutinise the potential effect of the low interest rate environment on financial stability; ... let me underline that we are closely monitoring risks to financial stability, but we do not see them materialising for the moment. Should this be the case, macroprudential policy – not monetary policy – would be the tool of choice to address these risks.” 

What on earth does this mean, I hear you ask?! 

In simple terms, he’s saying that he knows everyone was hanging on his words to do with interest rates, but actually if the economy suffers they wouldn’t use interest rates (monetary policy) to maintain financial stability, but rather macroprudential policy (Regulating things like how much you can borrow on mortgages) instead. So in effect he’s saying that there is no chance of an interest rate cut. 

As such the Euro has gained strength and become more expensive to purchase, as I said would be the case in yesterday’s post should there be a lack of any mention of further QE or a rate cut. 

Do you need to exchange currency? 

I don’t just provide a commentary on what moves the exchange rate. I am also the Foreign Exchange manager for one of the UK’s leading currency brokerages. As such, I can help you achieve much better rates than your bank or existing broker may be offering you. 

If you need the best exchange rates, then get in touch with me for a quote for free by clicking here. I can discuss your requirement, explain what is affecting the exchange rate, and help you to make an informed decision on when to fix a rate, and of course provide you a quote to see just how much you could save. 

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Pound/Euro rises on ECB comments

Thursday 3rd September 2015
After falling 9 cents in the last month, Sterling/Euro rates have staged a slight recovery today, pushing back above €1.37 as you can see from the chart below: 

ECB cuts inflation and growth forecasts 

The reason for the rise in rates wasn’t anything to do with the Pound, but rather the Euro weakening and becoming cheaper to buy. This was because the European Central Bank (ECB) has cut its inflation and growth forecasts for the next few years. 

They said that inflation in the Eurozone would probably be very low indeed for years to come and in turn this means that economic growth is unlikely to increase as much as had been thought. The banks president Mario Draghi said it expected inflation to be 0.1% for 2015, rising to 1.5% in 2016 and 1.7% in 2017, dampened by lower energy prices. They also hinted that further Quantitative Easing (QE) may be requried to shore up the economy. QE effectively creates new money to pump into an economy and usually weakens a currency as more of it is in circulation. 

The Euro dropped like a stone on these comments and because all of this means that the EU recovery is not quite as on track as analysts and investors had thought, the result has been a sell-off in the single currency, causing it to weaken and push exchange rates back up to €1.37. 

Do you need to buy or sell Euros at the best rate? 

A typical purchase of €250,000 to buy a property abroad has differed in cost by over £11,500.00 in the last month alone, which really illustrates how important it is to get your timing right when fixing your rate of exchange. If you need to convert currency and would like to discuss the market and ways to protect you against market fluctuations, I am happy to speak to any potential clients that would like a quotation to compare what I can offer with their bank or existing currency broker. On average the rates I can provide are 2 to 3% better than available elsewhere which can mean huge savings when converting a large sum.

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€1.43 - Will Sterling go higher against Euro?

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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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 Feb 2015

Monday 2nd February 2015
Good morning and welcome to a new trading week. After a very volatile couple of weeks that has seen GBP/EUR hit 7 year highs of €1.35, things have stabilised somewhat, and this morning the rate has dropped back into the €1.32’s. With no significant data of note today, the only thing I can attribute the drop to, is a rumour that the Swiss National Bank will be unofficially targeting a EUR/CHF rate of 1.05. 

Why has the Pound/Euro rate fallen? 

This is significant as they recently ended their policy of keeping the rate at 1.20. They did this by selling CHF and buying Euros to keep the desired rate. These rumours mean the SNB could be buying huge volumes of Euros to keep the rate where they want it, and this demand for Euros has strengthened the single currency and made it more expensive, hence why this could be the reason GBP/EUR rates have fallen a cent this morning. 

Will the Pound/Euro rate go higher or lower in February? 

All in all, with rates to buy Euro still above 1.30 which is close to a 7 year peak, it’s a good time to take stock of any Euro requirements you may have in the coming months. With all the bad news from Europe now priced into the rate, I think we’ll struggle to see it get much higher. Furthermore if the QE measures recently announced by the ECB have the desired effect, we could see the Euro gain further strength and pull GBP/EUR rates lower. 

It’s also worth mentioning Greece – it looks like they won’t default on their debts, and for the time being will be firmly remaining in the Euro, so the initial uncertainty after their election has now subsided, and that’s also why GBP/EUR has stopped climbing. 

Do you want the best possible exchange rates? 

Get in touch with me today to discuss the rates I can offer and the contract types you have at your disposal to ensure you don’t lose out. The consultancy service I provide is free, and involves a chat over the phone regarding your requirements. I can then explain the various options and choices you have to ensure you make an informed decision when to fix a rate. When you decide to fix a rate I can provide you a quotation; the rates I provide are often up to 5% better than banks and other brokers can offer so the savings can be huge. 

Click here to make a free enquiry with me today. 

What could affect exchange rates this week? 

Below I have outlined what I think will move exchange rates this week. To discuss how this could affect your currency requirement in more detail, click here to send me a free enquiry. 

Tuesday 3rd February 2015 – The only UK data of note is PMI construction, which looks at the construction sector. It’s a relatively minor release but could affect Sterling. GBP/AUD could face a volatile day however with an Australian Interest Rate decision and following statement. GBP/EUR has recently seen very good gains with trading levels above $1.90. Staying with the antipodean currencies, the NZD could also be affected by Unemployment figures and a central bank speech today. 

Wednesday 4th February 2015 – Again only 1 release from the UK today; services PMI. As an indicator of the economic situation in the UK it can often affect Sterling. Sterling/Euro could also be affect today however by EU Retail Sales, and a policy meeting from the European Central Bank. Across the Pond we have a host of data from the States, including Employment, Manufacturing and Services figures. 

Thursday 5th February 2015 – today we have the Bank of England interest rate decision. I think this will be a non-event; rates won’t change from 0.5% in my view for another year. Elsewhere today we have an economic bulletin from the ECB, Retail Sales from Australia and Jobless claims along with Trade Balance figures from the USA. 

Friday 6th February 2015 – Today the UK releases its Trade Balance figures, which show the difference between imports and exports, and this release often creates some volatility for the Pound. There aren’t any releases from Europe today, but in the afternoon we have Jobs data from the USA. The Non-Farm payrolls in particular can really move the GBP/USD rate. The forecast is for 235,000 new US jobs to have been created, but the actual figure is often very different which could move the Pound/Dollar rate around 1.30pm. 

To discuss how the above could affect your currency requirement in more detail, or to obtain a quotation on the rates I can offer, click here to send me a free enquiry.

Pound/Euro hits €1.32 after QE announced by ECB

Thursday 22nd January 2015 
The European Central Bank (ECB) today announced its Quantitative Easing (QE) package, outlining over €1tn of stimulus for the economy. It’s been the main driver of exchange rates in recent weeks and today it became a reality. You can read a very good outline of the measures and how they work here on the BBC website. 

What has it meant for exchange rates? 

The Euro has weakened as markets expected it would. As you can see from the chart below, Pound/Euro rates have risen to a new 7 year high of €1.32, so fantastic rates for Euro buyers: 

Will it go higher or drop back down? 

I can’t see rates going that much higher, and given the GBP/EUR cross is now comfortably above the €1.30 benchmark, I think it will stay at this level. For this reason anyone that needs to buy Euro soon should consider fixing a rate while it’s so good. If you want to gamble on the hope of higher rates, then you should place a ‘Stop Loss’ order to protect against rates going back down. 

Euro sellers don’t have much on the horizon that could improve things. This weekend’s election could cause further uncertainty for the beleaguered Eurozone, and so if you need to sell Euros, consider cutting your losses and getting something done sooner rather than later. 

Getting the best exchange rates. 

If you have a currency requirement for any major international currency, and need to have funds wired between bank accounts, I can help you achieve excellent rates of exchange. Whether you are buying or selling property abroad, or are a business that sends and receives payments in foreign currencies, I can save you up to 5% on the exchange rate, which is considerable when moving a large sum. 

Even if you already use a currency broker, it costs nothing to compare the rates that I can offer. 

Click here to send me a free enquiry today and see how much you could save.

ECB key to GBP/EUR forecast for 2015

Tuesday 20th January 2015 
Pound/Euro rates have risen by a cent today, and at the time of writing GBP/EUR remains stable around the €1.31 level, which is the highest rate to buy Euros since March 2008: 

Will Pound/Euro rates climb or fall? 

We’ve seen a significant rise in rates in the last few weeks, pushing GBP/EUR in particular to the highest we’ve seen in 7 years. Being able to trade at levels above €1.30 is excellent news. The main question now is whether rates will drop back below this level, or perhaps even go higher still. 

The next few days will be key to this. Tomorrow we have a Bank of England decision on interest rates, and the latest Unemployment figures. I think both of these will be a non-event and won’t have much of an impact. 

Of much more significance will be Thursday’s announcement by the European Central Bank (ECB), when they’ll decide whether they will start a Quantitative Easing programme where funds will be created to spur an economic recovery. 

If they do, it will likely weaken the euro. As this has been progressively priced into the market, we’ve seen the euro lose value over recent weeks which is the main reason rates are currently so high. Because it is widely expected, for the most part it is already priced into the rate. If QE is announced however it may not actually cause further gains. 

However if there’s no announcement, expect GBP/EUR to fall away as the expectation has already been partially priced into rates. Furthermore, in a week’s time, the Greek election will cause uncertainty for the Eurozone, so there is much on the horizon that could significantly harm the euro. 

If you’re buying or selling Euros, what should you do? 

In the first instance you should discuss your currency requirement with me, to talk about your specific needs and discuss what is moving the market. I can also explain the various options you have at your disposal. 

For example, euro sellers should consider buying forwards to protect against the rate getting worse. Euro buyers should consider a stop loss order, to protect against the market dropping should QE not be announced. It would be a shame to miss out on a 7 year high by holding out for a small gain. 

Whatever your currency requirement, if you’re keen on achieve the best possible rates, contact me today by clicking here to make a free enquiry.

Pound/Euro forecasted to hit €1.54. Or €1.12. Who's right?

Friday 21st November 2014 
The Euro has weakened again today, pushing the Pound/Euro rate up from €1.25 to €1.26, marking the end of a topsy-turvy week in which was saw GBP/EUR climb 2 cents, recovering half of last week’s losses. In today's post, I'll explain the jump in the rate, and also have a look at a forecast that Pound/Euro will hit €1.54. Or €1.12, depending who you believe. Let's start with today's movements :

Why has the Pound/Euro rate gone up?

It’s nothing to do with Sterling, and all to do with the Euro. This morning the ECB president gave a speech and his comments caused the Euro to weaken and become cheaper to buy. So what exactly did he say? 

“We will do what we must to raise inflation and inflation expectations as fast as possible, as our price-stability mandate requires,” adding that some inflation expectations “have been declining to levels that I would deem excessively low,”. 

With the next ECB policy meeting only a few weeks from now, and the EU economy facing a period of stagnation, he may make further comments that show the markets that he is committed to reigniting growth and inflation. 

This is a clear signal that the ECB may embark on unconventional methods such as Quantitative Easing to help the economy. This caused the Euro to weaken and that’s the reason for today’s upward swing.

Will the Pound go up or down against the Euro ?

So what next for Pound/Euro rates? In the last few weeks we’ve seen the currency pair trading in a range from €1.24 to €1.28, and currently we’re slap bang in the middle of that range. I personally can’t see it going too much higher, but just to illustrate that nobody can predict the way exchange rates can move, consider these two differing forecasts...
 
The Pound is to climb relentlessly against the euro over the next three years and will reach levels last seen at the turn of the century, according to new forecasts by Goldman Sachs. They are predicting that rates will reach €1.54 within a few years. I find that hard to believe! In the 10 years I have been working as a Currency Broker, I have seen highs of €1.55 and lows of €1.01, but the current level of a little under €1.30 is a more realistic value in my opinion. Moreover, such a dramatic rise in sterling cannot easily be justified by the underlying weakness of the British economy, which already has the worst current account deficit in the developed world. It was running at 5.2pc of GDP in the second quarter. 

The IMF have a totally different view, stating that they think the Pound is up to 10% overvalued, which could mean a correction in the GBP/EUR rate down to €1.12. Again I think such a drop is highly unlikely. 

So Pound/Euro could rise to €1.54. Or fall to €1.12. Clear as mud. 

What the two differing forecasts show is the total uncertainty over which way the rate will move into next year. So whether you are buying Euros, or have Euros to convert back to Pounds, it’s understandably very difficult to know when to fix a rate, given nobody really has any clear idea about the direction the currency pair will take. 

That’s where I can help you. While predicting the market is impossible, having a good currency broker with a sound knowledge of the markets can save you thousands of Pounds. Part of this is arming yourself with the knowledge to make an informed choice on when to fix a rate. The other part is using tools to your advantage, such as Forward contracts, Stop Loss and Limit Orders to make sure you don't lose out unnecessarily. In this way you can employ a sound strategy with regards to when to convert your funds, and take some control over what is a very unpredictable currency market.

The worst thing you can do is just sit back and hope the exchange rate moves in your favour. Hope is not a reliable economic tool. If you need to convert currency, perhaps for buying or selling property abroad or for business purposes, then get in touch with me today for a free consultation on how I can help you. A can discuss your requirement, discuss the currency pair you are converting, and explain the different options you can consider to help you make the most of your currency. When you decide to fix a rate, I can source you an exchange rate up to 5% better than banks and other brokers. 

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

Pound/Euro rises after ECB press conference

Thursday 6th November 2014 
The Sterling/Euro exchange rate has rocketed today, following comments by the European Central Bank (ECB) president Mario Draghi, as I predicted could well happen in my post earlier this week.

Central Bank Decisions and the Pound/Euro exchange rate 

Both the UK and EU central bank announced their latest decisions on interest rates today. There were no surprises, with both keeping their benchmark rates on hold. However after the EU decision, the president of the European Central Bank (ECB), Mario Draghi, said in a press conference that the bank stands ready to give the Eurozone further economic stimulus "should it become necessary". Mr Draghi said: "Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate." 

Markets have taken this as a negative sign for the Eurozone, and the Euro weakened accordingly. As you can see form the chart below, there was a significant spike of around 1 cent, bringing the GBP/EUR rate to within a cent or so of the highest it’s been in 6 years. 

What next for Pound/Euro? 

To me the trend is just repeating itself. Many times over the last few months we have seen rates reach this level, before dipping back off again. Without anything on the horizon likely to strengthen the Pound, I think there is a good chance we could see the rate drop back again. If you need to buy Euros, I would consider locking in a rate now while it’s so good. You can fix the current rate for up to 2 years and only lodge 10% of what you want to convert. 

Euro sellers have a tougher decision. Longer term forecasts suggest the rate getting to €1.30, but short term you could see moves in your favour. If you need to buy or sell Euros, or indeed any international currency then click below to make a free enquiry on the rates I can source for you. I can help with bank to bank transfers from amounts from £5k to £5m. I’m afraid I cannot help with cash or holiday funds. 

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Pound/Euro hits new 2 year high €1.28+

Thursday 25th September 2014 
The Pound/Euro rate has surged today, smashing through the €1.28 level to a fresh 2 year high. In fact this is now very close to the best Euro buying rates we’ve seen in 6 years. 

Pound/Euro level breaks €1.28, why has this happened? 

There are 2 reasons for the rise, and both involve the heads of Central banks. Early this morning we saw the European Central Bank president Mario Draghi give a speech, in which he said that they were willing to instigate further stimulus measures if necessary. In other words, it’s likely they will pump money into the economy to try and spur it along, and this has weakened the Euro making it much cheaper to buy. 

He said that "We stand ready to use additional unconventional instruments within our mandate, and alter the size or composition of our unconventional interventions should it become necessary to further address risks of a too prolonged period of low inflation". He also forecast only modest growth in the second half of this year, due to "weaker than expected" preliminary economic data over the summer. 

This afternoon, it was the turn of the Bank of England governor Mark Carney. In his speech which you can read in full here, he said that “with many of the conditions for the economy to normalise now met, the point at which interest rates also begin to normalise is getting closer. In recent months the judgement about precisely when to raise rates has become more balanced.” Adding that “While there is always uncertainty about the future, you can expect interest rates to begin to increase.” 

This has really given the Pound a push higher, and you can see the results of these comments from the ECB and BoE in today’s GBP/EUR chart: 

 

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Will rates keep going up? 

Nobody can predict where rates will go, but I think all the good news about the UK economy is now priced into the market, and I personally can’t see much more gains to be had. 2 years ago we were in a similar position, with many thinking the rate would break €1.30, but within 6 months it was down at €1.15. 

I’m not suggesting it will plummet again, but with the future of the rate impossible to forecast, if you needed to buy Euros is it worth risking these amazing levels currently available? I think those that do have much more to lose than to gain. In my view, you are holding out for an inch and risking losing a yard! 

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Exchange Rates Forecast: Scottish Referendum/Central Banks

Wednesday 10th September 
Good afternoon, and welcome back to my regular currency updates which will resume my blog today. I’ve been in Europe for a week so apologies for the lack of news in recent days. 

Much has happened since I’ve been away however that has had a big impact on exchange rates, so I’ll run over the recent developments and what this means for the Pound against other currencies. The main topic is the Scottish independence vote, so read on to find out how this might affect Sterling. 

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The topics I’m going to cover today are as follows: 

• ECB cuts interest rates 
• Mark Carney signals no interest rate rise until 2015 
• Scottish independence vote causing big swings for the Pound 

ECB cuts interest rates 

Last week’s surprise was the European Central Bank cutting interest rates. I mentioned before I went away that I thought they would announce some sort of stimulus, but I didn’t think they would cut rates again. The Euro weakened and Pound/Euro rates went up, but not by much. 

I was quite surprised to see rates in the €1.24’s against the Euro, but that is because the Pound has also weakened which I will cover in a moment. Against other currencies, the Euro is very weak indeed. 

Mark Carney signals no interest rate rise until 2015 

The Bank of England governor said yesterday rates aren’t going up in the UK until spring 2015. The Pound has weakened on the news, as regular readers will know that in the last few months, talk of an imminent rate rise has been giving Sterling strength. 

However, Carney doesn’t seem to know what he wants, giving conflicting information, and so watch out for any other speeches or comments he makes. If he indicates interest rates may rise, the Pound could gain. If he indicates it’s some way off as he did yesterday, the Pound will fall like it did this morning. 

Scottish independence vote causing big swings for the Pound 

This is the big one. Just today, this story has caused the GBP/EUR rate to drop from 1.25 down to 1.24, and then recover all the way back to 1.25 again. This might not sound like much, but it’s a huge change in a single day, and can make an enormous difference to any currency conversion you may need to do. 

So what’s been going on? The vote for independence is only a few days away, and polls at the moment are around 50/50 as to which way it will go. 

If they vote Yes, then it has serious economic implications. For exchange rates, it could mean the Pound weakening by up to 15% which would send exchange rates plummeting. If they vote No, then the Pound would likely gain strength and rates go up. Either way, there is likely to be significant movement in the price of the Sterling. 

Shell, BP, Standard Life have all made comments today about the potential economic effects, and it is these comments that have been pulling rates all over the place today. 

My View?

This is my personal blog, and my personal view is that many people, especially the 16 & 17 year olds, will be voting with their heart and not their head. They will be using this as a protest vote against the current government. What they don’t realise is this isn’t anything to do with politics, and if they vote Yes, there will be no going back, and a 300 year old union will be gone. I was born in England, but I’m half Scottish, most of my family live there, and I class myself as British. I hope they vote no. A Yes vote will probably bankrupt the country and create a pointless border. 

I think when it comes to the crunch the vote will be no. The alternative could send exchange rates plummeting.

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Pound up, Euro weakens, Dollar strengthens - forecast 2014

Tuesday 26th August 2014 
Good morning and welcome back after the long weekend we enjoyed in the UK, despite the dismal weather! The Pound/Euro rate however is anything but dismal, having recovered today when UK markets opened. This is more to do with weakness in the Euro that I shall explain in a moment, in addition to looking at why Pound/Dollar rates dropped. I will also outline what data released we’re looking at this week that could affect exchange rates. 

Sterling/Euro rates up, but not due to the Pound 

Over the weekend there was a meeting with the US and EU central bank chiefs in the United States. There were some interesting comments from the European Central Bank (ECB) president Mario Draghi that has caused the Euro to weaken. 

Unlike the UK, Europe is still struggling to grow and they are facing a problem of very low inflation. Usually you would lower interest rates to combat this, but rates in the EU are already at a low of 0.15% so they can’t cut it any further. So what I expect them to do is look at other stimulus measures, much like the Quantitative Easing we saw in the UK. 

His comments over the weekend hinted at this when he said that they would “use also unconventional instruments to safeguard the firm anchoring of inflation expectations over the medium- to long-term.” Adding that they would “use all the available instruments needed to ensure price stability over the medium term.” 

Markets have taken this as the clearest signal yet that they may indeed have to create money to pump money into the economy. If so this would weaken the Euro, and this has started to get priced into the market and the Euro has weakened off, causing the Pound/Euro rate to recover back towards to €1.26 level.

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Pound/Dollar rates drop 

Again this was not due to Sterling, it was due to the US Federal Reserve Chair Janet Yellen being very positive about the US economy, their growth and unemployment levels, and the fact they will continue winding up their stimulus program, all of which points to the USA raising interest rates next year. As a result, the Pound/Dollar rate dropped as the US Dollar became more expensive to buy. 

This week’s data releases 

Tuesday 26th August – today has been quiet in terms of economic data, with only US figures of note. We’ve seen good orders higher than expected compounding the strength of the US Dollar. 

Wednesday 27th August – Yet another quiet day, and while there are some minor releases, there is nothing that I think should affect exchange rates. 

Thursday 28th August - It is quiet again in the UK with nothing of interest other than some consumer confidence figures at midnight. In the EU however, Germany (Europe’s largest economy) has a raft of unemployment and inflation data. Over in the United States we have Gross Domestic Product figures, Jobless Claims and Home sales, all of which could affect GBP/USD rates. 

Friday 29th August – The only UK release is a measure of business investment, but with a lack of other UK data this week it may have a larger effect than normal. Elsewhere we have EU inflation and unemployment, Canadian GDP figures, and income and expenditure figures from the USA. 

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