GBP/EUR, GBP/USD, GBP/AUD currency forecast

Tuesday 21st July 2015 
In today’s post I’ll take a look at what’s been happening with Sterling/Euro, Sterling/Australian Dollar & Sterling/US Dollar, including where rates may head in the coming months. (If you would like to discuss your currency requirement and obtain a quote on the best exchange rate I can provide, get in touch by clicking here.)

Sterling/Euro 

GBP/EUR rates started the week at new highs of €1.44. This was due to comments from the Bank of England, hinting that interest rates may finally start to rise at the end of the year. This strengthened Sterling pushing it higher against other currencies. 

Today however we’ve seen the rate drop back steadily throughout the day by 1% at the time of writing, as you can see from the chart above. Renewed optimism due to Greece starting to repay it's debts, and the fact they may soon secure a proper bailout, is starting to strengthen the Euro and make it more expensive to buy. Tomorrow, we have the Bank of England (BoE) meeting and minutes on their discussions on rates. If these show that 2 or more of the BoE’s Monetary Policy Committee (MPC) vote for a hike (or even discussed the possibility of it) the Pound may gain further. 

Sterling/Australian Dollar  

GBP/AUD rates are very high at the moment, as you can see from the chart below: 

 
Current levels are at 2.11 which are around the best they’ve been in 8 years. The reason is that China, Australia’s largest trading partner is slowing down, and there is less demand for commodities. Commodity prices are very low at the moment, weakening currencies such as the CAD, NZD, ZAR as I touched on in a recent post.  

Late tonight, the Aussies release inflation data, and there is a speech by their central bank governor. If he hints that interest rates will be cut again, then we could see GBP/AUD go even higher. 

Sterling/US Dollar  

GBP/USD rates have been dropping of late. This is mainly due to the fact US interest rates are expected to rise in a few months’ time, the first major western economy likely to start pushing rates up. The higher return potential means USD is in demand and getting stronger. 


I expect the US Dollar to continue gaining strength in the coming months, and wouldn’t be surprised to see GBP/USD rates back at $1.50 or even below this by the latter part of 2015. 

Getting the best exchange rates 

If you want to get the best possible exchange rates, then contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+. You can send me a free enquiry using the link below, and I will get in touch personally to discuss your requirements, explain how the service works, and discuss the different options you can consider to help you get the best rate of exchange possible. 

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Pound at 4 month high vs US Dollar, flat vs Euro

Wednesday 28th March 2012
Good morning. The Pound/Euro rate has been pretty flat so far this week, remaining around the €1.19 to €1.20 range. Against the US Dollar rates briefly hit a 4 month high above $1.60, before retreating slightly. Today we will take a look at what is causing recent movements, and the forecast for GBP/EUR and GBP/USD for the coming weeks.

Sterling remains range-bound vs Euro

Let's start with the Pound/Euro exchange rate, which remains around the €1.20 level. It did briefly drop by half a point yesterday morning when the first round of economic figures were released, however the drop was not to last.

At 12:00pm yesterday the CBI Distributive Trades Survey was released by the Confederation of British Industry. This is an indicator of short-term trends in the UK retail and wholesale distribution sector, and tends to have an impact on the formulation of economic policy at the Bank of England and within Government, and so can often impact Sterling.

The figures were much better than analysts had forecasts, and the Pound steadily recovered throughout the day, pushing back towards the €1.20 level.

What is the Pound Euro Forecast for where rates may head?

We're getting mixed messages from analysts at the moment. On the one hand the EU debt crisis is not resolved and this is keeping the Euro weak. It's important to remember however that there is no fundamental strength in the Pound, it's simply the fact that we have our own central bank to print money, and a well established austerity plan that the markets like. This is keeping the Pound supported against other currencies... for the moment.

Supporting this view was Bank of England policymaker David Miles, who said earlier this week that economy had effectively stalled, with growth rates near zero over the last six months, keeping alive slim chances of another round of quantitative easing. A bulletin released by the BoE yesterday suggested that asset purchases by central banks have helped economies weather their crises, and so the sluggish UK growth is keeping alive the prospects of more QE.

My view is that while the threat of more QE is on the horizon, the Pound will not make any significant gains against the Euro. It will likely remain range-bound between €1.18 and €1.20, but any resolution to the EU debt crisis could pull rates back down. In fact for several years now, we have seen rates above €1.20 only to sharply drop back away within a month or two. If you need Euros at the best possible rates, then send me an enquiry now to find out how you can protect yourself against the rate dropping.

EU Debt crisis: OECD urges eurozone rescue fund boost

The OECD has said that the eurozone needs to double its bailout fund to €1 trillion, however German Chancellor Angela Merkel said she would favour only a temporary increase. The reason for the proposed increase is that some fear that the fund will not be able to cope with another bailout.

At the moment we've seen bailouts already for Greece, Ireland and Portugal. While this has given some stability to the markets and kept exchange rates stable, the chance is still there that other countries, namely Spain and Italy, could require some funding. This shows that the EU debt crisis is far from over, and is keeping rates supported around the €1.20 level.

Adding to the problems in the EU, Spain confirmed yesterday that they had fallen back into recession. It contracted again in Q1 this year, and in the last quarter of last year. 2 consecutive quarters of negative growth is a 'technical' recession.

Sterling hits 4 month high against US Dollar

Despite the stability in GBP/EUR rates, the Pound/Dollar rate actually gained quite well yesterday, and rose to its highest in more than 4 months. The dollar was hit by increasing chances of more U.S. monetary easing, which weakened it and made it cheaper to purchase.

Given rates are now quite favourable, those that need the best exchange rates for Dollars can look at a Forward contract - lock in the rate now for up to 2 years, and only lodge 10% of the funds now, the remainder due when you want the currency. If this is of interest to you contact us to discuss it further.

Today's Data to watch out for

We start in Germany again today, with inflation numbers at 7am. A few hours later the EU releases money supply data. US figures this afternoon include Durable Goods orders. There are no releases of note today from the UK.

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