Why has Pound/Euro fallen into €1.38's?

Friday 21st August 2015
Since my last post on Tuesday, Sterling/Euro rates have fallen from €1.42 into the €1.38's, caused by the Euro gaining strength. 

There are several factors that have caused the single currency to gain. Firstly the news that Greek Prime Minister and Syriza leader Alexis Tsipras stood down on Thursday, paving the way for new elections. This seems to have been taken as a positive move for the Euro and last night the rate starting slipping away. This continued this morning when German and European inflation numbers were better than expected, coupled with worse than expected UK Public Sector borrowing data. 

As you can see from the chart below, in the last week the rate has been in steady decline. With a resolution to the Greek debt crisis, and decent EU economic data, this could well spell the end of the record 8 year high GBP/EUR exchange rates we have seen recently. It’s good news however for those selling Euros, with a typical conversion of €250,000.00 netting £4500.00 more in just a few days. 

China Slow down affects currency markets 

Elsewhere, the slowdown in China continues with stock markets there dropping again. This affects other global currencies because China is such a huge economy. Countries like Australia that export to China are suffering, and so the Aussie Dollar has weakened recently. The US Dollar benefits and gains strength as investors become risk averse and seek safe haven currencies. 

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GBP/EUR falls 4 cents in a week. GBP/USD also set to drop

Tuesday 28th July 2015
Sterling has fallen sharply against the Euro of late, and in the last week had slipped from €1.44 down to €1.40. As you can see from the chart below, the rate has recovered slightly this morning, getting back above €1.41: 

The main reason for the gradual slide in Sterling is partly due to renewed optimism surround Greece, but also the global economic picture. If you look at the global economy, you will see that the Chinese market is in turmoil, and there has also been a sharp drop in Commodity prices. This is giving investors serious doubts over the strength of economic growth worldwide, and in turn this casts some doubt over whether the Bank of England will actually raise interest rates at the turn of the year. 

The global picture means that the Bank of England may well have to tighten their monetary policy, and this has pulled Sterling lower against other currencies. 

This morning however, strong UK Growth figures have shown that the economy has grown by 0.7% in the last few months, which is an improvement over recent measures. This positive news has pushed the Sterling/Euro rate up by 1% comfortably over the €1.41 mark. 

Sterling/Dollar 

It is interest rates driving this currency pair too at the moment. Today, the US Federal Reserve starts a 2 day meeting, with an announcement due tomorrow. If they give further signals that interest rates are going to rise within the next few months, then expect the US Dollar to gain strength and pull rates lower.

 
Currently GBP/USD is trading at around $1.56. I don’t expect the level to remain at these levels. As the US are widely expected to be the first western economy to start pushing up rates, this could mean the USD strengthens. I still expect rates to drop below the key $1.50 mark by the end of the year. 

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Why has the Pound/Euro rate fallen?

Thursday 23rd July 2015
Sterling/Euro rates have been threatening to fall for a week now, and today the market took a plunge pushing GBP/EUR rates down into the €1.41’s. After a quick look at the chart, I’ll go into more detail regarding what caused the rate to fall, and whether the Pound will go back up against the Euro. 

Why has the Pound fallen against the Euro? 

The first reason was Greece, which is becoming a regular and tiresome topic in the currency world! However it looks like things are getting closed to being resolved. They have taken a crucial step towards a bailout after its parliament passed a second set of reforms today, and this has given confidence back to the Euro. This is why the market initially started dropping this morning. There had been fears of a rebellion by Greek MPs, but the Greek Prime Minister Alexis Tsipras got the required support. This means that negotiations can begin on approving the terms of a third bailout. It looks like a final deal will be sorted out within the next 3 weeks, and if so I’d expect the rate to drop even further. 

The second reason for the decline was some very poor UK Retail Sales numbers this morning. The number was expected to show a rise of 0.4%, but actually sales dropped by -0.2%. As retail sales are seen as a good overall barometer of economic activity, the news sent the Pound lower, pushing rates even further from the 8 year high of €1.44 we’ve recently seen. 

Will rates recover?

Moving Forwards, longer term I think rates will continue to remain strong due to the UK economy performing well, despite today’s poor numbers. However in the short to medium term, if the ongoing Greek saga finally ends with a full €86bn bailout, expect the GBP/EUR rate to fall sharply as the Euro regains strength. 

Do you have a currency transaction to perform? 

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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? 

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GBP/EUR hits €1.42 as Greek rescue falls apart

Wednesday 15th July 2015
In a new twist to the ongoing Greek saga, last night the IMF released a statement saying that they don’t think the proposed bailout goes far enough.

Effectively, this is a warning that the IMF will not take part in any rescue package for Greece unless the other EU creditors agree to much more debt relief than planned. This is a huge complication, and the amazing fact is everyone involved in the negotiations knew the IMF's position, but just ignored it.

Ignoring things doesn't make them go away, and the stunning developments means that the Euro has weakened even further, as nobody knows if this on-going issue is actually ever going to be resolved or not. 

The effect on the currency markets is a Euro that’s getting even weaker. The GBP/EUR reached €1.4240 this morning, before some poor UK employment numbers pulled it back down to the €1.42 mark as the graph below shows: 

 
 
What does all this mean for the Euro? 

It means that even if the Greeks agree to the plan today, it’s likely that the whole package agreed may now need to be re-negotiated, so in effect tomorrow morning we may well be back at square one. What an absolute mess this really is. The banks are still shut. They probably won’t open again for another month until an actual package is re-negotiated and ratified, so the ‘solution’ that came on Monday seems to be nothing of the sort. 

Result - GBP/EUR getting even higher.

Getting the best exchange rates 

These are very uncertain times, and having a good currency broker on your side can save you a lot of money if you are converting a large sum. Therefore if you want to get the best possible exchange rates, contact me for a quote. 

I provide commercial rates of exchange to private and corporate clients looking to trade £5k+.

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Greek Bailout – why has Pound/Euro risen?

Monday 13th July 2015
It was quite an eventful weekend for Greece and the Eurozone, with late night negotiations resulting in an announcement this morning that a deal has been made. If that’s the case, then why hasn’t the Euro strengthened? 

As you can see from the chart below, when markets opened this morning and reacted to the news, rates actually rose from €1.39 to €1.4050. As is often the case in the currency markets, the devil is in the detail, and in a moment I’ll explain why all is not as it seems and look at why Pound/Euro rates are still high. 

Greece makes deal, but Euro remains weak for now

The facts are as follows: Athens has been offered a third bailout, and this means the country will avoid bankruptcy. Greece will stay inside the euro and there will not be a 'Grexit'. However, it’s not quite yet a done deal. 

A proposal is on the table, however Greek Prime Minister Alexis Tsipras now has to rush through key measures on pension reforms, tax increases and a debt repayment, all of which needs to be approved by parliament by Wednesday, and only then will bridging loans be agreed to enable Greece to meet a payment to the European Central Bank in a weeks time. 

Eurozone finance ministers are due to meet later today to talk about some emergency lending to help Greece over the next few days. 

Some investors say even if a final deal is agreed, the lasting damage done to the Greek economy could still sour attitudes towards the currency union in the longer term. The tough conditions imposed by international lenders may also cause an outcry in Greece and bring down Tsipras' leftist government. Even before the final terms were known, his labour minister went on state television to denounce the terms. So it's not quite over yet, and while uncertainty remains, the Euro remains weak.

Summary 

So a deal is done. Sort of. But we have to wait until Wednesday to see if it will actually be carried through. The Greek parliament still need to agree to the terms, and the EU still need to discuss emergency funding, and until then capital controls are still in place and the Greek banks are almost out of cash. 

This is the reason the Euro is still weak and GBP/EUR rates are still holding above €1.40, while the final hurdles are negotiated in Greece and Europe. I will post regular updates on the blog throughout the week with the latest developments and t he effect on Pound/Euro rates. 

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/Euro rates slide as it looks like a Greek deal is imminent

Friday 10th July 2015
It looks like we’re edging closer to a deal over Greece, and the GBP/EUR has been edging lower ahead of a possible deal this weekend. (Take a look at my live currency charts, a snazzy new feature I've recently added to my blog that regular readers may have noticed!)  

Let's take stock of where everything stands...

Yesterday the Greeks delivered their proposals to European creditors as promised. Today they are rallying support ahead of a vote by the Greek parliament at 10pm tonight. If they vote it through, which looks likely at the moment, then on Saturday EU finance ministers will have to all vote to agree to the proposals. On Monday morning, the parliaments of the EU will vote on whether to agree the deal. If all of this happens, then Greece will be given the €3.3bn they need to pay their outstanding debts.

What affect could this have on the Pound/Euro exchange rate? 

It’s very hard to say and the currency markets are impossible to second guess, but logic would dictate that if all goes to plan, then the crisis is averted and the Euro could gain significant strength, and that would pull exchange rates lower as the single currency becomes more expensive to buy. This could be good news for clients that will need to move Euros to Pounds, however if you need to buy Euros then there is the potential for a sharp drop in rates.  We'll see how things pan out when markets open on Monday morning.

If you need to buy Euros, how can you protect yourself? 

If you have an upcoming Euro requirement then it would be wise to put a strategy in place rather than just sitting back and waiting to see what will happen to the GBP/EUR exchange rate. Some examples of the things you could consider are as follows: 

• Fix the rate now on a Forward Contract – This means locking in the exchange rate now for up to 2 years into the future. You lodge 10% of the total you want to convert, and the remaining 90% is due when you want the Euros to be transferred. This protects you against the rate going down, but leaves you unable to take advantage should the rate go higher. You fix the rate, and that’s what you get regardless of what the market does. 

• Use a Stop Loss Order – This works by setting a target level, below which your order to buy Euros is executed. For example if you place a ‘Stop Loss’ at €1.35, then if the market drops to that level, your currency is purchased. It’s useful as it gives you a worst case scenario should the market fall. If however the rate climbs higher and the Stop isn’t filled, you can still take advantage of a higher rate of exchange. 

• Hedge your bets – If you are unsure which way the rate will go and want to gamble on Greece failing to secure a deal and the rate going higher, then one strategy you can consider is fixing a rate on a portion of the funds you need to buy, 50% for example. In this way you reduce your exposure significantly, and have some level of protection regardless which way the rate goes. If it does drop, then at least you bought some of your funds beforehand. If the rate climbs, then great you can buy the remaining amount needed at a higher rate. 

The above are some examples of the services I can offer, along with excellent rates of exchange. If you would like to receive a quote on the rate that I can offer you, or discuss your currency requirements in more detail,click below to get in touch.

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Why has Pound/Euro dropped to €1.39?

Wednesday 8th July 2015 
In today’s report I’ll look at the latest developments in Greece, the effect of today’s Budget statement on Sterling, and also why the Pound/Euro rate has dropped to €1.39. 

Pound/Euro drops to €1.39 

Since the start of the week, we’ve seen GBP/EUR exchange rates drop from €1.42 to €1.39 today. There are several factors affecting the Sterling/Euro cross at the moment, and after a quick look at the chart I’ll address each one in turn. 

What has caused Pound/Euro rates to fall? 

Sterling had been performing very well recently, rising on the back of some better economic numbers in recent months and the returning of a majority Conservative administration in May's general elections. The Pound had strengthened as a result, however now seems to be on the back foot. Here is my take on why Sterling has weakened off today. 

Greek deal - The Greek situation seems to be coming to a head, with Greece set to submit fresh proposals on Thursday, EU ministers meeting on Saturday to discuss, and a decision on Sunday before a looming deadline for Greece to make a €3bn payment to the IMF. This could well be the last chance for Greece, and many sources are optimistic a deal will finally be done. The uncertainty of the last few months had largely already been priced into the Euro, and so the single currency is starting to regain some strength on the possibility of a resolution. 

UK Budget – today George Osborne delivered his first conservative majority budget. The Pound had weakened this morning, and while there were some very positive things announced, in general it was a budget of austerity, and the fact that they are looking to go harder on austerity and start reducing overall debt soon bodes ill for the immediate outlook for the Pound.UK growth figures have been revised down, House prices are rocketing due to low supply, and this means that while the UK economy is performing very well, it’s not as good as some had hoped several months ago. This has taken the steam out of the Pound. 

Flight to safety – there are real problems in China right now, with the stock markets there in free fall. Investors are wary of any uncertainty, and this combined with Greece and very low commodity prices means investors are placing their funds in ‘safe haven’ currencies like the US Dollar, Japanese Yen and Swiss Franc. The Pound has lost out as people move their funds to safer places riding out the global economic uncertainty. 

Do you need to convert currency at the best rates? 

Exchange rates can move very quickly, and having an expert currency broker on your side can make a huge difference. From exchange rates up to 5% better than the banks, free consultations to discuss your currency requirement and strategy, to various contract types to help protect against adverse exchange rate movements, there are many positives to getting in touch to see how I can help you. 

The first step is to send across an enquiry, and I can then personally get in touch to discuss your requirements, explain how the service works, and provide you a quotation on your rate of exchange. 

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How could Euro react to the Greek referendum?

Friday 3rd July 2015
Regular readers of my blog will be well aware that most moves in Sterling/Euro of late have been due to the ongoing problems in Greece. The failure to meet their debt payments and the ongoing negotiations have weakened the Euro significantly in the last few months, resulting in a cheap single currency. In fact the current GBP/EUR is very close to the best it’s been in 8 years. Below is a chart showing the exchange rate over the last 3 months. As you can see, it's risen to €1.40 several times before dropping back away again:

 

What’s happening this weekend? 

The Greek people are voting on a referendum called by the Greek government, on whether they support the bailout offer, in terms of further international loans. This follows months of tough talks with creditors. 

Currently all support to Greece has been stopped, and the banks are likely to run out of cash on Monday. You can read more about this here on the BBC website.  EU leaders have warned that a "No" vote could see Greece leave the Eurozone. 

What if Greece votes ‘No’? 

This would mean them rejecting the bailout plans, and the Euro could well weaken pushing Pound/Euro rates higher. Some say this would mean Greece leaving the Euro. Actually, there is currently no mechanism for them to do so, as it simply wasn’t envisaged when the Euro was created! Even if they decided to leave the Euro tomorrow, it would take months for the EU to work out how to do this in practice. A no vote though would mean back to square one, and negotiations would start again. I do think however that a No vote will keep Pound/Euro firmly above 1.40 and we could possibly see rates climb even higher. 

What if Greece votes ‘Yes’? 

This would be a blow to the Greek government. It would in no way resolve the problems, as all it would mean is that negotiations would start again. However, I think a Yes vote would strengthen the Euro, and pull GBP/EUR rates back below the 1.40 mark again. 

What does all this mean for Pound/Euro rates? 

This afternoon GBP/EUR has fallen as the latest polls suggest the Yes vote has a slight lead. This indicates that rates could tumble if the vote goes this way on Sunday. Personally, whichever way the vote goes on Sunday, I still firmly believe a deal will be done between Greece and its creditors, and when it does I would expect Sterling/Euro to drop sharply. 

It’s in everyone’s interest to do a deal especially Greece’s. If I needed Euros in 2015, I would give serious consideration to fixing a rate while it’s close to the best in 8 years. 

Do you need to get the best exchange rates? 

Regardless which currency you need to buy or sell, why not get in touch with me for a quotation, and to discuss the different tools I provide to protect you against adverse exchange rate movements. The rates I source are up to 5% better than banks and other brokers may offer, and it costs nothing to contact me for a free consultation and quote. 

I can also discuss your particular requirements, explain what may happen to exchange rates in the coming months, and explain the options you can consider so you can make an informed choice on how to proceed. 

Have a great weekend.

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Pound/Euro hits €1.41 on Greek uncertainty

Tuesday 23rd June 2015 
Since my post yesterday, the Pound/Euro exchange rate has risen by over 2 cents, and at the time of writing sits at €1.41: 

The reasons for the gains is there is as yet no agreement over Greece, and no deal to decide whether Greece and its creditors can get past the political barriers in the way of sealing a resolution. 

Euro zone leaders did agree late last night that the institutions representing Greece's creditors should try to wrap up a detailed agreement by Wednesday evening for their finance ministers to approve and present to them on Thursday. 

So, while there us uncertainty, the Euro is weak. Nothing has really changed though – most still expect a last minute deal to be agreed, and if that happens, expect the rate to correct sharply. 

If you need to buy Euros, then consider getting something done while it’s still over €1.40. While nobody can predict which way the rate will go, each and every time we’ve got to these levels in the last 6 months, it hasn’t lasted long and the rate has dropped back away again. 

Click here to send me a free enquiry and find out what rate I can offer on your exchange.

How solution to Greek crisis could affect exchange rates

Monday 22nd June 2015 
This week, and today in particular, is quite a critical one for Greece, and the GBP/EUR exchange rate along with it. Many headlines are suggesting that this is the ‘Last Chance’ for Greece. There have been many of these before, and I don’t think today will provide a complete solution. 

What exactly is happening in Greece? 

They need to make a debt payment of €1.6 billion by next Tuesday, 30th June. However to be able to actually meet that payment, they need to get a further €7 billion in aid, and that’s what they’re trying to agree today, however to get the funds, the Greeks need to reform pensions and cut spending, which is difficult for their Prime Minister Alexis Tsipras to agree to, given he was elected on the premise of ending austerity. 

Early this morning, he met the leaders of the IMF, ECB and EU commission to outline his proposals. Just before lunch, the EU’s finance ministers started a meeting to see if they can agree on a deal to give Greece the bailout funds they need. Later this evening at 6pm all the EU leaders meet for an emergency summit to debate the crisis. 

How could Greece affect the GBP/EUR exchange rate? 

The uncertainty over Greece’s ability to obtain bailout funds has meant there is a risk of them leaving the Euro. This fear has been keeping the Euro weak, and that’s why the GBP/EUR exchange rate has been hovering around the €1.40 level of late. 

If they reach an agreement later today, or later this week, then I would expect the Euro to strengthen and cause the GBP/EUR rate to fall. However we’ve seen quite a few of these ‘last chances’ for Greece, and it could be that this weeks meetings simply kick the can down the road a little further, without actually sorting out the fundamental issues. If so, expect rates to remain supported. With worried Greeks currently withdrawing their savings from the banks in huge amounts, it's clear that a solution needs to be founds quickly. 

Personally I think they will all agree a way forwards sooner or later, which could mean the current GBP/EUR levels may not last for long. 

Are you looking to convert £5000+ on a bank to bank transfer basis, and keen on getting the best exchange rates? 

If you need to convert currency, and would like to get a quote to see how much I could save you on your exchange, then it is certainly worth sending me a free enquiry to obtain a quotation and more information on the services I offer. The rates I can achieve are significantly better than banks and other financial institutions offer, by as much as 5% in some cases. I also offer various types of contracts that can protect you against adverse exchange rate movements that banks don’t usually offer to private clients. 

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Pound/Euro rates near €1.40 again

Wednesday 17th June 2015
Sterling has gained strength in recent days, after figures showed that UK inflation has turned positive, Unemployment has fallen, and average wage earnings were much better than forecast. This has caused the Pound to gain against other currencies, hitting nearly €1.40 against the Euro, and $1.5750 against the US Dollar:

 Pound/Euro over last week:

 

Pound/Dollar over last week:

The other reason for the Pound/Euro rate gaining is the ongoing Greek situation. Relations between Greece and its creditors have fallen apart in recent days, and tomorrow there is an important meeting of EU finance ministers to discuss the situation. There are fears that Greece could default and leave the Euro, and this uncertainty is what is causing the Euro to remain weak. 

Most analysts still expect a deal to be reached at some point, and if that happens then I would expect Sterling/Euro rates to fall sharply. If you need to buy Euros and don’t want to take the risk of the rate dropping away, then you can place a ‘Stop Loss’ order to order your currency if it goes below a pre-agreed level. In this way should the market drop, you’re limiting losses and not leaving yourself open to a much lower exchange rate than necessary. 

Are you looking to convert £5000+ on a bank to bank transfer basis, and keen on getting the best exchange rates? 

If you need to convert currency, and would like to get a quote to see how much I could save you on your exchange, then it is certainly worth sending me a free enquiry to obtain a quotation and more information on the services I offer. The rates I can achieve are significantly better than banks and other financial institutions offer, by as much as 5% in some cases. I also offer various types of contracts that can protect you against adverse exchange rate movements that banks don’t usually offer to private clients. 

Click here to send me a free enquiry today.

Will Pound strengthen against Euro June 2016?

Wednesday 10th June 2015
In the last few weeks, the Pound/Euro rate has fallen significantly, mainly due to the fact it looks like Greece are making progress with regards to their debts. Having said that, in the last 24 hours we’ve actually seen a very slight recovery in GBP/EUR rates, although we’re now a long way away from the 8 year high we saw just a month ago, as you can see from the chart below: 

Since my last post on Monday, Sterling had fallen further against the Euro and other currencies, hurt by concerns over the strength of the UK economy. The Pound is suffering from persistent concerns over the strength of Britain's economy. Recent figures have shown growth in Britain's service sector slowed a great deal in May, while inflation has turned negative for the first time in over 50 years, suggesting the Bank of England will hold off from raising interest rates until at least the middle of next year. 

However despite the GBP/EUR rate falling into the €1.35’s, this morning we’ve seen a slight recovery to almost €1.37, due to much better than expected Industrial production figures. Manufacturing data disappointed, but overall the markets took the Industrial figures as positive, helping to push the Pound higher against other currencies including the Euro and US Dollar. 

Will the Pound strengthen against the Euro? 

There are a few key things today that could affect the GBP/EUR exchange rate one way or the other. Later today we have a Gross Domestic Product estimate from the NIESR. The last reading was 0.4% so any deviation from this number could affect the Pound. 

Later this evening at 21:00pm, we have a very important Speech by Bank of England governor Mark Carney at Mansion House. Last year when he gave this speech, regular readers may remember that he stated that interest rates may rise sooner than people think. The reaction to this was a huge boost for Sterling. This time around, while I don’t expect him to be quite as loose with his words, everything he says will be very closely watched indeed for any indication on future monetary policy. I don’t think that interest rates are going anywhere for at least 12 months, and if this expectation is pushed back even further tonight, the Pound could suffer and exchange rates could drop. 

Are you looking to convert £5000+ on a bank to bank transfer basis, and keen on getting the best exchange rates? 

If you need to convert currency, and would like to get a quote to see how much I could save you on your exchange, then it is certainly worth sending me a free enquiry to obtain a quotation and more information on the services I offer. The rates I can achieve are significantly better than banks and other financial institutions offer, by as much as 5% in some cases. I also offer various types of contracts that can protect you against adverse exchange rate movements that banks don’t usually offer to private clients. 

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Greece defers debt payment, but Pound/Euro rates fail to recover

Monday 8th June 2015

Greece defers debt payment, but Pound/Euro rates fail to recover

On Friday, it was announced that Greece will defer the payment that was due, and lump it together with a series of other payments due into on single payment of €1.5bn at the end of the month. So given they didn’t make the payment, why didn’t the Euro weaken and GBP/EUR rates rise? 

The news was actually a non-event, and had been widely expected. In fact, the markets seem to think that the delay gives all parties additional negotiating time which could lead to a formal agreement to conclude the bailout. 

The Pound/Euro rate this morning has already fallen nearly a cent, due to the CBI cutting UK growth forecasts, weakening the Pound.

Other EU data in the last few days has been strong, which is stopping the Euro getting any weaker. If the Greeks can indeed come to a conclusion over their debts by the end of this month, expect GBP/EUR rates to fall further. 

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US Jobs data causes GBP/USD rates to fall 

On Friday we saw the latest US Non-Farm Payrolls, which is a measure of new jobs created excluding the agricultural sector (because that’s seasonal). The number was 50,000 more than expected, which is a very robust result for the US. As such, the US Dollar gained strength and pulled GBP/USD rates lower. 

What could affect exchange rates this week? 

Below I’ve listed the main scheduled releases that I think could affect exchange rates. Of course ongoing developments in Greece, and the current G7 meeting could also affect things at any time. For a more in depth discussion about what could affect the exchange rate you’re looking at, feel free to get in touch with me. 

Monday 8th June 2015 – Today is relatively quiet, with some Industrial Production data and Trade Balance numbers from Germany, which had little effect on exchange rates. Later today we have Retail Sales numbers from the UK that are a good barometer of overall UK economic activity. If good, Sterling may gain. 

Tuesday 9th June 2015 – IN the UK today we have an inflation report. Depending what it contains, it could cause speculation on when UK interest rates may rise, and so could affect the Pound. We also have EU Gross Domestic Product. I’m expecting a quarterly reading of +0.4%. If the actual number is higher than this then GBP/EUR rates could fall. 

Wednesday 10th June 2015 – Today is a very important one for the UK. We have: Manufacturing Production, Industrial Production, RICS House Prices and the latest GDP estimate from the NIESR. All of these releases give a good idea how the UK economy is faring, and so simply put, better than expected numbers would strengthen the Pound and vice versa. Further afield, New Zealand has its latest Interest Rate decision and policy press conference, so GBP/NZD could also be affected. 

Thursday 11th June 2015 – Today Australian releases lots of Unemployment numbers along with House prices, so those watching the GBP/AUD rate should watch for today. Over in the United States we have Jobless Claims, and the latest measure of US Retail Sales. If these numbers continue to show an improvement in the US Economy, expect GBP/USD rates to fall. 

Friday 12th June 2015 – A very quiet end to the week, with the only data of note Germany wholesale Prices and US inflation data. 

To discuss your currency requirement, find out what data could affect the exchange rate you’re looking at, or to simply get a quote on the exchange rate I can offer you, follow the link below. 

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UK data disappoints, pulling GBP/EUR rates under €1.40

Last week we saw the Pound/Euro rates above the key €1.40 level, however as with the other 4 or 5 times that’s happened this year, the high rate was not to last, and at the end of last week, poor UK data weakened Sterling, and pulled rates back into the €1.39’s:

Why has the Pound fallen against the Euro? 

On the one hand, it looks increasingly likely that Greece will be able to meet its upcoming debt payments. My view is they are simply trying to negotiate a better deal, hence the delays. This expectation is giving some strength back to the Euro making it more expensive to buy. 

On the other hand, the Pound is coming under pressure due to a poor run of economic data. Investors are starting to worry about the implications of the UK leaving the EU, and this uncertainty is stopping investment and weakening the Pound. Prime Minister David Cameron's introduced a law last week that will guarantee the EU referendum will be held by the end of 2017. 

Also last week we saw other poor data, such as slightly weaker than expected growth figures. This coupled with other data signals that interest rates in the UK aren’t likely to rise until well into 2016. 

Which way will exchange rates move this week? 

Below I’ve listed the main data releases that I think will affect Pound/Euro rates, and exchange rates for other major currencies. Of course any further developments with the Greek situation are also likely to affect rates. 

If you are looking for the best exchange rates, then click here to send a free enquiry about the rates and service I can offer you, which are up to 5% better than available at banks. 

This week’s economic data releases 

Monday 1st June 2015 – This morning we have already seen manufacturing figures for the UK that were worse than expected that weakened the Pound slightly. We have also seen a raft of US data, most of which was better than analyst forecasts, which has strengthened the US Dollar and taken GBP/USD rates to around $1.52. 

Tuesday 2nd June 2015 – Today we have UK Mortgage numbers, construction figures, and credit data, all of which could affect the value of the Pound. In Europe, a raft of inflation data is a very important release for those watching Pound/Euro rates, as it could affect how much money the EU pump into the economy through their QE programme. 

Wednesday 3rd June 2015 – today’s main release is the latest EU decision on interest rates. While no change is expected, the comments made in the press conference at 13:30pm could really affect the Euro, especially so if they make changes to their QE expectations. 

Thursday 4th June 2015 – Today is the UK’s turn for interest rates, and as with the EU, no change is expected. Any comments made by the Bank of England governor Mark Carney however could well affect Sterling. 

Friday 5th June 2015 – Today is jobs day in the USA, and there are lots of employment figures including the Non-Farm payrolls numbers. This release in particular often causes large swings in the GBP/USD rate as it’s so hard to forecast. In Europe today, the latest GDP figures could affect Pound/Euro rates. 

Getting the best exchange rates 

Rates are very volatile at the moment, moving very quickly. In order to get the best possible rates you need to have a good currency broker who can monitor the market for you, explain the options you can consider on when to fix a rate, and get you a much better rate than banks will offer. The worst thing you can do is just watch the rate and hope it will move your way, or use the bank to convert your funds. 

Why not give me a try? The rates and service I provide are exceptional, and with over 10 years’ experience helping personal and business customers with their currency requirements, it may be prudent to see if I can do the same for you. Send me a free no obligation enquiry today by clicking below. 

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