Pound/Euro gains before dropping back to €1.26 again

Thursday 4th December 2014
It's been a busy week, but all in all we're back to where we started with GBP/EUR rates, now sitting around the €1.26 level again. Let's take a look at what's been happening. 

Autumn Statement causes Sterling to rise

Wednesday was a good day for the Pound, starting with better than expected services PMI that gave the Pound a boost. This was compounded by the budget statement, which the markets took very positively for the Pound and GBP/EUR rose by over 1% on the day, getting to 1.2766 at the peak. However as is often the case, spikes to the upside can be very short lived and this proved to be the case again during trading today, when the ECB's draghi made comments that pulled the rate back towards the €1.26 level. 

What caused the GBP/EUR rate to fall? 

It was largely comments by the European Central Bank (ECB) president Mario Draghi. As always for the 1st Thursday in the month, the UK and EU central banks announced their decision on interest rates, with both opting to keep rates on hold at record lows. This was expected, and soon afterwards the ECB president gave a press conference. 

You can read his full comments here. He basically hinted that QE is coming for the Eurozone, but the market was expecting a little more clarity. So if it sounds as though they are edging towards quantitative easing, why didn’t the Euro weaken and cause GBP/EUR to go up further? 

Firstly it's worth remembering that the ECB has already started something that has a lot in common with QE. It is buying financial assets based on private sector loans with newly created money. The difference between this and the US and UK QE programmes is that firstly it’s much, much smaller. Secondly the assets being purchased don’t actually include government debt. 

The markets were actually expecting him to be a little clearer on exactly when and how their QE programme would be expanded. What he actually said is that there had been "a very rich, ample discussion" on what unconventional instruments the bank had available to it within its mandate, adding that “We discussed broadly all sorts of measures, we... discussed various options of QE. And more work is needed and... we'll keep you informed." 

In the absence of any clear indication of further stimulus that had been expected, the recent weakening of the Euro had been reversed, and it is this that caused the single currency to strengthen and pull rates back towards the €1.26 level where it has felt comfortable at in recent weeks. 

Tomorrow's data

GBP/EUR – we have Inflation Expectation measures for the UK, which could affect the consensus of when interest rates will rise, and so could affect the Pound. Over in Europe we have the latest GDP measures which if better than the expected 0.2% could cause GBP/EUR to fall. 

GBP/USD – there are lots of released from the USA later this afternoon including factory orders, Jobless Claims, and NonFarm Payrolls. The consensus is for 232,000 jobs to have been created in the USA last month, however as the prediction is usually quite far off the actual number, anything higher than this would cause GBP/USD to fall, and vice versa. 

If you need the best exchange rates, contact me by clicking here for a free consultation on the currency markets and to discuss the tools available to help you achieve the best possible exchange rates. 

Have a great weekend.

Pound/Euro forecast September 2014

Monday 1st September 2014 
Good morning and welcome to a new month. Pound/Euro rates have started quite strongly at €1.2650 due to a weakening Euro, but Pound/Dollar remains low at just above $1.66. In today’s report I will outline what has pushed GBP/EUR rates higher, the forecast for September, along with this week’s data releases that could affect exchange rates. 

Pound/Euro up to €1.2655 

After a few weeks of decline in the GBP/EUR rate, this morning we saw it recover back close to 2 year highs. This is partly due to the crisis in Ukraine and the risks this presents to the EU recovery. 

The main reason why the Pound has risen against the Euro is weakness in the single currency. Low inflation means that the pressure is on the European Central Bank to provide further stimulus which could take the form of Quantitative Easing. They will announce whether they will do so at a meeting on Thursday. If they do announce stimulus, expect the Euro to weaken and Pound/Euro rates to rise. 

However, Analysts at Barclays said it was too soon for the ECB to announce new policy measures, given that the two most powerful policies announced in June are not yet deployed. So there are mixed views on whether anything will be announced on Thursday. If so, exchange rates will probably go up. If they don’t say anything, then the rate will probably drop. 

If you are looking for the best GBP/EUR or EUR/GBP rate, click here to send me a free enquiry. 

Pound/Dollar remains low at $1.66 

This again is partly due to the problems in Ukraine and the middle-east. When there is global uncertainty like there is at present, the Dollar gains strength and becomes more expensive to buy. 

 The US economy is also recovering well, and they have been winding up their stimulus programme. So like the UK, the USA is recovering and this is being reflected in the strength of the respective currencies. 

Summary 

The UK and US economies are doing well; the Dollar and Pound are strong as a result. The EU economy is doing badly, and they are likely to have to take measures to boost the economy. This is weakening the Euro. 

The geopolitical situation in Ukraine and the middle-east is also causing problems for the EU economy, and causing the safe haven US Dollar to gain in strength and become more expensive. All of the above means GBP/USD is low, GBP/EUR is at a 2 year high, and there are various economic releases (detailed below) this week that could keep the currency markets quite volatile. 

I can source exchange rates up to 5% better than available at banks and other currency brokers. Click here to send me a free no obligation enquiry to find out how I can help with your currency transfers. 

 *** I'm on holiday from tomorrow so my blog will next be updated on the 10th September ***

This week’s economic data releases. 

Monday 1st September – Today has been very quiet due to a market holiday in the United States. We did have slightly worse than expected UK Mortgage Approval and inflation numbers this morning, pulling the Pound slightly lower. 

Tuesday 2nd September – Overnight Australia will have released its latest interest rate decision which I expect will stay at 2.5%. The only UK data of note today is PMI construction released at 09:30am. US Markets open again today with figures showing the latest Construction and Manufacturing. 

Wednesday 3rd September – Further UK inflation figures today could affect the Pound. GBP/EUR could also be affected by the latest UK Retail Sales figures. Elsewhere we will see Australian growth figures, an interest rate decision from Canada, and the latest US Factory Order numbers. 

Thursday 4th September – As always for the first Thursday in the month, the EU and UK release their latest decision on interest rates. They will probably leave them as they are, but there is a chance as I outlined above that the EU could announce stimulus measures. Expect exchange rates to rise if this is the case. Over in the USA we have the latest Jobless numbers and Trade Balance figures. 

Friday 5th September – The only UK data of note is a consumer inflation report. The EU releases its latest GDP figures. Canada has some unemployment numbers. Over in the states we have earnings and non-farm payroll figures. These are often very different to forecast to expect a choppy day for Pound/Dollar rates. 

If you would like to get a quote, discuss which way the market is moving, or talk about how the above data could affect your exchange rate, click here to send me a free enquiry today.

Sterling/Euro up after German Inflation figures

Tuesday 29th April 2014
For the last week exchange rates have been quite stable, without much volatility. Today however we have seen some choppy movements on the Sterling/Euro rate in particular, following data releases from the UK and Germany. Let’s have a look at how it has affected exchange rates:

     

Pound slips after growth figures lower than expected

This morning the UK’s latest GDP figures were released, showing that the UK economy grew by 0.8% in the first quarter of 2014. This is the 5th consecutive period of GDP growth - the longest positive run since the financial crisis. 

However the Pound fell on the news as the market had been expecting it to be even higher, at 0.9%. Just before the release rates rose slightly in anticipation of a good result as you can see in the chart above. You can also see the sharp drop the moment the actual number was released. 

In the currency markets, figures like this are forecast in advance and priced into exchange rates accordingly. 

Pound/Euro rates bounce back after German Inflation data 

After the UK’s figures, GBP/EUR sat around the €1.21 level. At 1pm Germany released its latest inflation numbers. Much like the UK’s release, Germany’s figures were slightly lower than expected, and this caused the Euro to weaken and become cheaper to buy. 

Germany is the EU’s largest economy so that’s why the results had quite a big impact on Pound/Euro rates, helping them to recover up to €1.2180. 

Looking for the best exchange rates? 

If you have a currency requirement, and would like to discuss what might move the exchange rate, then get in touch with me for a free chat. I can discuss what you need to do and talk over what might move the exchange rate. 

I can also provide you a quote to compare with your bank or existing currency broker - even a small difference in the rate can often save you thousands of Pounds. 

I can help you get the best exchange rates if you: need to buy property overseas, sell property and convert funds back to Sterling, monthly transfers to a Euro account, business’s buying or selling goods in foreign currencies etc.  (I trade all the worlds major currencies, not just the Euro.)

Click here to get in touch and find out more about the rates I can provide. 

Alastair Archbold

Will exchange rates go up or down this week?

Monday 31st March 2014 
We have seen the Pound slide off a little at the start of the trading week, with GBP/EUR falling from €1.21 down to €1.2050, a drop of around 0.4%. This was mainly due to consumer credit being lower than expected, reflecting a lack of confidence surrounding the UK economy. This afternoon however it's bounced back to where we started around the €1.21 level, so all in all no change.

There are lots of economic data releases this week that could affect exchange rates, so as usual for a Monday I am going to list what I think are the most important releases, and analyse how this could affect the currency markets. 

If you need to convert one currency to another, on a bank to bank basis for volumes between £5k and £10m, then read on, as my thoughts below can help you decide when may be the best time to fix your rate. Get in touch if you would like a quote, or to discuss your currency requirement with me in detail.

This weeks economic data releases...

Monday 31st March 2014 

As I’ve already outlined above, the only UK data was slightly disappointing, taking the steam out of Sterling’s recovery. We also saw some EU inflation data this morning, which was roughly in line with expectations. Interestingly the BBC pitch this as terrible news, meaning a possible rate cut by the ECB - if that were the case, Pound/Euro would have gone up, not down.

The only other thing of interest today is a speech by Bank of England governor Mark Carney. His comments have recently had a big impact on the value of the Pound. In short if he is positive about the economy, Sterling may gain strength. I think it’s more likely he will have quite a cautionary tone, mirroring the BoE’s recent comments about being concerned about the Pound getting to much stronger, so I think a drop is more likely. 

Tuesday 1st April 2014 

We’ll start in Australia today, and early in the morning we have their interest rate decision. I think it’s very likely they will leave it at 2.5%. GBP/AUD rates have fallen recently due to more demand for their raw materials from China. 

UK Manufacturing figures are released at 09:30 and I expect a reading of 56.9. Higher means exchange rates could rise accordingly and vice versa. 

German and EU Unemployment figures are released from Europe today, so those looking to buy Euros need poor numbers here, which would weaken the Euro and make it cheaper to buy. We also have unemployment from the United States, along with some manufacturing numbers. 

Wednesday 2nd April 2014 

Some construction data from the UK today to follow yesterday’s manufacturing. The forecast is 63.00 and as always, a differing result could affect Sterling exchange rates. 

The main event today however is EU GDP, which will show how their economy is growing. Their last released showed very small growth of 0.1%. Any better, expect GBP/EUR rates to drop away due to a stronger Euro. 

Thursday 3rd April 2014 

As always for the first Thursday in the month, the European Central Bank announces its interest rate, which is 99.9% likely to stay at 0.25%. Euro buyers or sellers should pay close attention to the press conference afterwards by President Mario Draghi. He may hint at a negative deposit rate – if he does, I think Pound/Euro will march upwards. The EU also released Retail Sales figures today, which are a good barometer of overall economic activity. 

Elsewhere, Australian Trade Balance figures and Retail Sales are announced, and over in the States we have Trade Balance numbers and Jobless numbers. 

Friday 4th April 2014 

The only data of interest today is stateside – Earnings and Unemployment, along with non-farm payrolls. Non-farms is always interesting, and it announces how many new jobs have been created, excluding the farming sector (because it’s seasonal). It’s notoriously difficult to forecast, and the consensus is that 196,000 new jobs will have been created. 

It’s likely the actual number will differ significantly from that – lower, then GBP/USD will rise, higher, and it will fall. Personally I think it will be quite a bit lower, closer to 130,000. We will see! 

Find out more about the rates and service I offer 

I can help you achieve an exchange rate up to 5% better than your bank or existing broker may offer. The savings can be considerable, so why not get in touch for a free quote? If you have a currency transaction to perform and would like to find out how I can help you, get in touch in the following ways: 

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Pound/Euro exchange rates - €1.21

Friday 28th March 2014 
Sterling has risen to €1.2120 against the Euro, before dropping back away this afternoon. In today’s post I’ll look at this weeks figures that have caused the Pound to gain, and run over the tools I can provide to help you achieve the best foreign exchange rates in 2014 

Sterling/Euro hits €1.21 

The Pound has risen to €1.21 in the last few days, helped along by some very strong Retail Sales figures. Since the Pound/Euro exchange rate had rate dropped below €1.20, it stayed below that level for over a week, hitting resistance every time it threatened to break through. It was the significantly better than forecast Retail Sales figures that finally gave the Pound the push it needed. 

Once it had broken through the resistance level, it kept rising over €1.21 briefly, before some less impressive UK figures caused it to drop back again. 

Poor deficit and GDP figures halt Sterling’s rise 

Figures this morning showed that the UK's current account deficit was much larger than expected. The deficit in the three months to December was £22.4bn, only marginally lower than the all-time high of £22.8bn recorded in the previous quarter. Economists had expected the UK's deficit to narrow to about £14bn in the final three months of the year. One analyst described the deficit as "worryingly large". 

The poor figure halted the rise in the value of the Pound, and the fact that UK GDP numbers were less than the previous estimate also caused a slight fall. 

What can you do if you need to buy Euros? 

The rise in the rate is welcome news, but recently the Bank of England has warned against the Pound gaining much more strength. If I needed Euros, I would look at the current rate and realise it’s within 1% or so of the best it’s been in 15 months. It could go higher of course as it’s impossible to predict, but I think by hanging on you are holding out for an inch, while risking losing a yard. 

For this reason I would lock the current attractive levels with a Forward contract, which means you can reserve your exchange rate on the full amount you need to convert, but only lodge 10% of the total now. The remaining 90% is not required until you need your currency. You can lock in the rate for up to 2 years and thereby protect against a drop. 

I’m converting Euros to Pounds, what should I do? 

Just a few days ago the EUR/GBP rate was the best it’s been all year. Now we’re above €1.20, the resistance level I mentioned in a recent post now becomes a support level. This means it’s unlikely to drop back through €1.20 any time soon. 

Some forecasts suggest the Pound will get stronger, although the Bank of England could try to stop it rising much further. That said, the average rate over the last 10 years is €1.30, so it’s actually still quite good. I think it’s going to hold at these levels for a while so I see no value in waiting for rates to drop as they are unlikely to do so. 

Find out more about the rates and service I offer 

If you have a currency transaction to perform and would like to find out how I can help you, get in touch in the following ways:

Click here to send a free enquiry 
Call me directly: +44 (0) 1442 892 066 

Ask for Alastair Archbold, and quote ref ‘FERF’

Pound/Euro rises ahead of Central Bank decisions

Wednesday 5th March 2014 
We started this week with some volatility in the currency markets due to the tensions in Ukraine. This has now eased somewhat, and a sense of calm returned, with the United States and Russia set to hold talks on easing East-West tension in Ukraine. 

This morning we had some UK data that showed the UK service sector continued to "expand strongly" with job creation at its fastest pace for four months. The survey also found that confidence in the economic outlook rose to its highest since September 2009. 

This set the day for the Pound, which has steadily risen throughout today as you can see from the chart below. At the time of writing Pound/Euro rates have risen to 1.2177 and Pound/Dollar is back above 1.67. 

Central Bank decisions tomorrow could affect Pound/Euro

Tomorrow we will see the latest decisions from the Bank of England (BoE) and European Central Bank (ECB) with regards to interest rates and quantitative easing. I don’t expect any change in policy from the BoE, but the ECB could make moves that may alter the GBP/EUR rate. 

I think there is a small chance that they may cut the deposit rate, which would weaken the Euro pushing GBP/EUR rates higher. This is due to their latest inflation numbers indicating a cut is needed. I also think today’s rise in Pound/Euro rates is in anticipation of a rate cut. 

Even if they don’t actually cut the rate, at 13:30pm, 45 minutes after the decision, the ECB president Mario Draghi will give a press conference, and any comments he makes could well alter the value of the Euro. If he hints at rates being cut at future meetings, again we may see Pound/Euro rates climb further. 

However there is also the chance that there will be no cut, and no hint of a cut. In this scenario I would expect exchange rates to drop away, because today’s gains are partly due to the chance of a cut being priced into the market in advance. 

Are you looking for the best Pound/Euro rates? 

The current exchange rate is still very close to the best it’s been in over a year, but we are still failing to see rates climb higher than their peak of last month. So it’s a great time to need to buy Euros and if I needed to buy the single currency I personally wouldn’t take the risk in holding out for much more, as I think there is much more to lose than there is to gain. 

If you need to buy Euros and would like to achieve the best rates of exchange, get in touch with me today for a free quote. I can source you rates of exchange up to 5% better than banks or other brokers may offer you, so it’s a good idea to compare what I can offer you. 

Buying other currencies such as USD, AUD, NZD, CAD, CHF, ZAR 

I can trade most of the major currencies around the world, at excellent rates of exchange. 

If you need to convert funds to another currency, I can provide you a quote to compare with your bank of existing broker.  

Click here to send me a free enquiry. 

Converting funds back into Sterling 

Perhaps you have sold a property overseas and repatriate the funds to the UK in Pounds. You may be an international business that takes payments in Euros that need converting back to Pounds. Whatever your currency requirements, I can help you both with achieving commercial exchange rates, and discussing your options so you can make an informed choice on when to place your trade. 

Regardless of the exact conversion you need to perform, I can help you. Click here to send me a free no obligation enquiry today, and find out more about the rates and service I offer. 

I have worked as a foreign exchange broker for over 8 years, and have extensive experience. The company I represent are fully authorised by the Financial Conduct Authority, so you can be safe in the knowledge your funds are safe. 

To find out more about the full currency service I provide, click here to send me an enquiry. 

• Alternatively you can call me directly
• +44 (0)1442 892 066. 

• When you call please ask for Alastair Archbold and quote ref AJA.

Why has the Pound dropped from €1.22 to €1.2050?

Monday 3rd February 2014 
Since my last post we have seen further volatility in the Pound/Euro exchange rate. On Friday we saw rates hit €1.22, but the spike was short lived as has often been the case in the last few months. In trading today, rates fell quite a bit, falling to €1.2048 at the time of writing. 

In today’s post I’m going to explain what caused rates to rise only to quickly fall back away again. I will also look at what data is due this week that I think will affect exchange rates. 

Pound/Euro hits €1.22 on EU inflation data. 

On Friday we saw some very low inflation figures from Europe, which mean the European Central Bank may take action to help protect the eurozone's fragile recovery. Official figures showed that eurozone inflation fell to 0.7% in January, down from 0.8% in December and further below the ECB's 2% target. 

It has fuelled worries about whether the euro bloc could suffer deflation, potentially de-railing economic growth. As such, the only tool in the ECB’s box to combat this, is cutting the EU interest rate or possible the deposit rate. This would help combat deflation, but due the lower return on offer, it would also weaken the Euro. 

Mario Draghi, president of the ECB, has said that although inflation was "subdued, and expected to remain subdued" for about two years, he was confident that it would return to target. But he added that the ECB was ready to act if necessary. 

It was this comment that hints at lower interest rates in the EU, and we saw this being priced into the market on Friday, and it was this that caused rates to climb to €1.22 as the Euro lost value and became cheaper to buy.

Looking for the best GBP/EUR or EUR/GBP rates?

Why have rates fallen today to €1.2050? 

There are 2 reasons for the drop in rates today. Firstly we saw some better than expected data from Euros. Eurozone manufacturing grew strongly in January on the back of new orders, a closely-watched business survey suggests, with Germany leading the way. This counteracts the bad news we saw on Friday, and so the Euro regained some strength and has become more expensive to buy. 

Also this morning, we saw some poor UK Manufacturing data that was a little lower than expected. This weakened Sterling, and combined with today’s EU data has pulled rates from the high of €1.22 on Friday, to €1.2050 this morning. 

What other data could affect exchange rates this week? 

For Pound/Euro rates, I think that Wednesday and Thursday will be important dats. There are various inflation and Retail Sales numbers on Wednesday, and on Thursday we will see the latest Bank of England (BoE) and European Central Bank (ECB) interest rate decisions. We probably won’t get any surprises from the BoE, however there is a small chance the EU could cut rates. 

I think it’s probably unlikely, but we may see the president Mario Draghi hint at action in the coming months. Either of these things would push Pound/Euro rates higher. 

On Friday we also have some further Manufacturing data from the UK, along with the latest Trade Balance figures. If better than expected then the Pound could gain, but anything that disappoints the market would caused the Pound to fall away quite sharply. 

To discuss your requirement with me in detail, click here.

Getting the Best Exchange Rates 

• Looking for the best exchange rates? 
• Want to know if your rate will go up or down this year? 
• Unsure when to go ahead and fix a rate? 
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I look forward to hearing from you. 

Alastair Archbold

Sterling up after Retail Sales smash forecasts

Friday 17th January 2014 
This morning at 09:30am we saw the latest UK retail sales figures. These are watched closely as they reflect the overall economic situation in the UK, and for this reason the numbers often have an effect on exchange rates. 

The figures this morning were significantly above forecast, and as you can see from today’s GBP/EUR chart below, they have caused a big spike in exchange rates:

 

The numbers showed that sales in December were up 5.3% on a year ago, and this is the fastest annual sales growth in more than nine years. The forecast was for 2.6%, so it's significantly better than expected. The figures from the Office for National Statistics (ONS) suggested growth in consumer spending above the expectations of many analysts. 

There aren’t many other significantly releases today, other than a speech by a Bank of England member at lunchtime, and some US Housing numbers later this afternoon. 

Do you need to buy Euros?

The spike this morning has pushed GBP/EUR rates back up to a 12 month high. 

We’ve seen this happen several times now over the last 6 weeks, only for the gains to be short lived and rates to drop back away again, so if history repeats itself we could well see rates drop back away. 

If you need to convert Pounds to Euros, this could be a good opportunity to take advantage of this spike. 

If you need to buy Euros and would like to see what rates I can offer you, click here to send me a free enquiry. 

Are you converting Euros back to Pounds? 

Rates have been above the €1.20 level for some time now, and we have seen it spike several times before dropping back away. If you need to convert Euros to Sterling then the medium term forecast for the market moving against you should ring alarm bells. 

 You can use tools such as Stop Loss Orders to help you achieve the best rates possible. If you would like to find our more about how these works and the excellent exchange rates I can offer you, click here to get in touch with me today. 

Are you converting another currency, for example NZD, AUD, CAD, USD, CHF? 

I can trade most of the world’s major currencies, at exchange rates that are up to 5% better than banks can offer. This combined with the range of currency contracts available and my excellent knowledge of the currency markets could save you thousands of Pounds if you need to convert one currency to another. 

Why are you reading this? Perhaps you’re buying or selling a property abroad, or buy or sell goods in a different country, but whatever your requirements, you are likely reading this because you want to know which way exchange rates may move, and would like to achieve the best exchange rate possible. 

Get in touch with me now my sending me a free enquiry. 

I can have a brief chat with you over the telephone, discuss your requirements, explain the options you have available, and let you know the rate I can offer. By getting in touch you could well save yourself thousands of Pounds. 

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

Alastair Archbold