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. 

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Pound/Euro has fallen 8 cents since last month

Monday 28th September 
The last week has been an interesting one for currencies, with the GBP/EUR exchange rate fluctuating between €1.39 and €1.35. Since last month, it's now fallen 8 cents. This means purchasing €350,000.00 today is costing you around £15,000.00 more than last month, which really illustrates how important it is to get your timing right, and have tools in place like 'Stop Loss' orders to protect against sharp drops in the market like we have seen recently.

Here's how the GBP/EUR rate has moved in the last 2 months:

What has been causing the volatility in currency prices? 

As I explained in my last post, the main reason for the fall in GBP/EUR rates last week was due to a strengthening of the Euro, which has now become more expensive to buy. The European Central Bank opted not to extend their stimulus programme, and have also said interest rates will not be cut. This has supported the Euro and is the main reason for rates dropping away. 

Also the global economic uncertainty has meant that the UK are no longer likely to tighten monetary policy, and this has halted the rise in the value of Sterling. I’d expect the USA to raise interest rates later this year, and the UK may follow them, but not until the latter part of 2016 in my opinion. (The rumour of an interest rate hike generally strengthens a currency due to the higher return on offer for investors).

What could happen to exchange rates this week? 

Below I’ve listed the main data releases I think will affect currency rates for the coming week. For those looking at GBP/EUR, there are lots of inflation figures from the UK and EU, and also UK GDP figures that could affect the rate. 

For GBP/USD, look for hints on interest rates from FED member speeches later today. 

If you have a currency transfer to make, would like a quote, or simply a chat about what is moving exchange rates, click here to send me a free enquiry today. 

Monday 28th September 2015 – Very quiet other that data from the USA – Inflation numbers, Home Sales and Speeches by FED members could all affect GBP/USD. So far rates have risen today, but the general trend in Pound/Dollar rates is likely to be down 

Tuesday 29th September 2015 – There is a speech by Bank of England governor Mark Carney, and he may give clues on UK interest rates that could affect the Pound. Also in the UK today we see Mortgage approval numbers and a measure of Consumer Confidence. Elsewhere, Germany has inflation figures, the USA also releases Consumer Confidence figures. 

Wednesday 30th September 2015 – We have the latest GDP figures today that could affect Sterling. European data includes Germany releases Retail Sales numbers and Unemployment figures, along with EU wide unemployment figures and inflation. The FED’s Janet Yellen gives another speech – watch for any hint on US monetary policy. 

Thursday 1st October 2015 – There is data on manufacturing today from Germany, Europe and the UK, in addition to an ECB monetary policy meeting, all of which could affect GBP/EUR rates. The USA has Manufacturing and Construction data due in the afternoon. 

Friday 2nd October 2015 – We end the week with Jobs day in the USA, with Non-Farm Payrolls one of the key releases that could affect the US Dollar this week. The EU releases inflation numbers. 

If you would like to know how any of the above data could affect exchange rates, 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.

Click here to get your quote and find out how much you could save. 

Bank of England could cause Pound to fall sharply

Friday 18th September 2015
FED leave interest rates on hold 

Last night the US Federal Reserve opted to keep interest rates at their low of 0.25%. There was a small chance that they would raise interest rates but this didn’t materialise. The FED Chair Janet Yellen cited the slowdown in China and emerging markets as the reason to keep the benchmark rate and this has weakened the Dollar making it a little cheaper to purchase. The rate climbed to around $1.5650 but has since started to slip away. They will raise rates at some point, probably early next year, so any rise in the rate should be taken advantage of, as it’s likely the GBP/USD will drop in the medium term.  Therefore if you need US Dollars, consider a 'Stop Loss' order to protect against a sharp drop. I've read forecasts from Barclays Capital with expectations of $1.43 by the end of this year!  

Click here for a quote on US Dollars.

Will Pound/Euro rates go up or down? 

The initial reaction to the FED move was for GBP/EURO to fall. There are 2 reasons this happened. Firstly, investors that had lodged funds in USD to take advantage of the possible rate hike moved them back to Euros, causing the single currency to gain. Also, the fact the USA have left rates on hold mean the UK are likely to do the same for many months, and this caused the Pound to weaken slightly. However, throughout today, the rate has clawed its way back up to around €1.37:



Rate cut by the Bank of England could send the Pound lower

The Pound/Euro exchange rate may move lower in the coming months however. A month or two ago, everybody thought the Bank of England would raise interest rates and this had caused the Pound to rise. A hike is now incredibly unlikely any time soon though, and in fact the UK may have to cut interest rates. 

The Bank of England’s chief economist has said that the bank may have to cut rates to combat low inflation, rather than raise. Inflation may not pick up in the second half of the year, and there are risks of fallout from emerging economies, he said in a speech. Should those risks materialise, a rate cut would be a viable option, he said. 

The UK economic recovery has stalled of late. Softening employment figures and weakening surveys on manufacturing and construction output suggested growth in the UK could slow in the second half of the year and inflation might not pick up as expected. Furthermore, problems in emerging markets could be a drag on UK growth and the headwinds from those economies were unlikely to abate any time soon. 

I personally don’t think a rate cut is on the cards, but at the same time there is very little chance of them opting to raise rates. This is likely to keep the Pound low for the coming months. Any clients looking to purchase Euros should therefore consider their options to ensure they don’t get a lower rate than is necessary. 

Get in touch to discuss your options 

If you need to buy or sell Euros, or indeed any international currency, then get in touch to discuss your options. I can explain the various ways you can protect yourself against the rate moving against you, and provide a quote for you to compare with your bank or exiting broker. I can typically secure exchange rates up to 3% better than banks and other brokers may offer, which could save you thousands of pounds if you are converting a large sum. 

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Will the FED raise interest rates this week?

Tuesday 15th September 2015
On Thursday, the US Federal Reserve will announce their decision on interest rates, and for the first time in many years, there is actually the chance of a change. It’s widely expected that the USA will be the first major western economy to start pushing interest rates up from the record lows they have been at for many years. 

It’s likely that they will keep them at their record low of 0.25% for another month, however there is a 20% chance that they will raise the benchmark rate to 0.5%. 

What would be the effect on exchange rates if they raise interest rates? 

A hike in interest rates would make the US Dollar an attractive option for investors, due to the higher return they would get on their funds. Therefore, if the FED do indeed raise interest rates I would expect the US Dollar to gain strength and become more expensive to buy, and this would push GBP/USD exchange rates lower. The small chance of a hike will already be priced into the market, so if they leave rates on hold, then GBP/USD may rise slightly. 

Looking further ahead, they are likely to raise rates at some point in the next few months, so I would not expect the GBP/USD rate to remain above the $1.50 mark for long. Most forecasts I’m reading at the moment suggest that the rate to buy Dollars will fall considerably in the medium term. Therefore if you have a requirement to buy US Dollars, click here to get in touch to discuss the ways I can help protect you against the rate moving against you. 

Do you want the best exhcange rates?

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 I would welcome the opportunity to speak to anyone that needs to get a quote on their exchange and explain how I can help you. Click here to send me your details and I will get in touch personally to discuss your requirements today.

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Pound falls slightly on poor Industrial and Manufacturing Production figures

Wednesday 9th September 
After gradually rising this week, the Pound has fallen slightly against the Euro and US Dollar today due to worse than expected UK data. Figures released earlier today showed that UK Industrial and Manufacturing production fell at its sharpest pace in more than a year. I warned on Monday that if the figures were worse than forecast Sterling could fall, and while the expected numbers were predicted to show slight growth, the actual numbers showed a decline of -0.4% & -0.8% respectively. As you can see from today’s GBP/EUR chart below, Sterling fell by around 1 cent against the Euro, however has since started to claw back its losses. (Click here to see my live currency chart)

Tomorrow key for whether Pound will rise or fall in the coming months 

At 12pm tomorrow, we will have a much clearer idea of whether Sterling is likely to rise or fall in the coming months, based on interest rate expectations. The Bank of England will announce its decision on interest rates, and they will almost certainly keep them on hold at 0.5%. Straight after the decision however, they will give a statement and release the minutes to the meeting. This will be key as it will show the views of the Monetary Policy Committee and what was discussed, and how many of the members if any voted for rates to rise. 

If these minutes give any hint that interest rates will rise early next year, then the Pound is likely to gain against other currencies. If they show that actually recent economic developments mean that rates will stay on hold for most of 2016, then expect the Pound to fall. 

How do I think the BoE decision could affect exchange rates? 

It’s impossible to predict currency movements of course, but I think that it’s quite likely the Pound could fall. I reach this conclusion because the current global economic downturn risks affecting the UK’s growth prospects, and raising interest rates too soon could hamper the steady recovery that Britain has been making relative to other major western economies. For this reason I think rates will stay on hold for around 12 months. This also means that investors are less likely to want to keep Sterling assets, and as a result Sterling exchange rates could fall. 

Of course, the BoE governor Mark Carney is highly unpredictable and it is impossible to second guess what effect his comments may have on the Pound. I’m quite sure however that tomorrow will see a change in the value of the Pound one way or the other. 

Are you worried about exchange rates moving against you? 

Regardless whether you are buying or selling foreign currency, the worst thing you can do is simply sit back and watch the market, hoping that the rate will move in a favourable way for you. The currency markets are highly unpredictable and this approach could cost you dearly. 

If you have a currency transaction to perform there are a number of ways I can be of help. Firstly, I can source rates of exchange that are very close to the published market level, and up to 5% better than banks or other currency brokers can offer. Secondly, with over 15 years’ experience in the FX Markets, I have a very good knowledge of what can affect exchange rates, and can help you to make an informed decision on when to lock in a rate of exchange. 

I would welcome the opportunity to speak to anyone that needs to get a quote on their exchange and explain how I can help you. Click here to send me your details and I will get in touch personally to discuss your requirements today. 

Send me an enquiry today by clicking here. 

Sterling continues to fall against the Euro

Wednesday 26th August 2015
Following ‘Black Monday’ there continues to be volatility with Sterling exchange rates. Looking at Sterling/Euro in particular, the recent 8 year highs of €1.44 are now a distant memory. Rates have plunged in the last few weeks, and despite recovering a little yesterday, it fell again last night at is now stable around the €1.36 level as you can see from the chart below:

Further volatility expected on currency markets 

This all began Monday when a global rout in the stock markets was prompted by a huge share sell off in China. Fears of a global slowdown intensified in recent days after China devalued its currency and data pointed to further signs of weakness, triggering volatility in global stock and currency markets. 

Interest Rates 

China cut its interest rates this week in an effort to avert disaster, and investors are now questioning whether the Federal Reserve in the USA and the Bank of England in the UK can change interest rates. Much of the Pound’s strength in recent months was on expectations interest rates would rise later this year. Even the recent Bank of England inflation report gave investors’ confidence rates would rise within 6 months, boosting the value of Sterling. However with the latest global developments, it’s now likely to be late next year, or even 2017 before rates rise from their current 0.5%. As a result the Pound has weakened. 

Experts expect market volatility to continue until at least next month when the USA decides what to do on interest rates. Just a few weeks ago, most thought they would raise their interest rate, but now it’s more likely up to a year away. 

Safe Haven Currencies 

An unlikely benefactor of the recent turmoil has been the Euro. Now that Greece is out of the news following an agreement to provide an €86bn bailout, the Euro has gained strength as I had predicted it would do for some time. Their stimulus programme seems to be working, and actually the EU economy is looking more and more robust. This has meant that due to the global turmoil, investors view the single currency as a safe place to park their funds while avoiding stock market turmoil and this strength is also a factor in the GBP/EUR rate falling away sharply. 

Do you have a currency transaction to perform? 

If you have a foreign exchange need in the next 6 months, then the current volatility should be of concern and you should take steps explore all the options available to you. You can get in touch with me by clicking here, to get a quote and find out about how you can protect yourself against adverse market movements. 

Whether you are buying or selling property abroad, a business that deals in foreign currencies, or simply need to top up a foreign bank account, I can help. I have been a currency broker helping private and business clients get better rates than their banks or existing brokers offer for more than 10 years. 

Get in touch today for free, have a brief chat, and get a quote on your exchange to see how much you could save. 

Alastair Archbold

Sterling falls after Super Thursday

Friday 7th August 2015
Super Thursday was anything but for the Pound, as a dovish tone from the Bank of England caused a large sell off for Sterling, pulling GBP/EUR exchange rates lower. The decline has continued this afternoon so in just 48 hours exchange rates have dropped from from €1.44 to nearly €1.41: 

Super Thursday pushes GBP/EUR lower 

On Thursday, the Bank's Monetary Policy Committee voted to keep interest rates at their current historic low of 0.5%. What surprised many was that only 1 of the 9 members voted for a rate hike. The markets had been expecting at least 2 or more to vote for a hike. 

This means that earlier in the week expectation was for interest rates to go up at the end of the year. Deputy governor Ben Broadbent said the Committee had no specific time in mind for a rise and comments by governor Mark Carney had been misinterpreted. 

Following yesterday’s news it now looks like mid 2016 is more likely. Investors sold the Pound on the back of the news, pulling the Pound lower against other currencies. I said that exchange rates were likely to change yesterday and that has proved to be the case. 

Pound/Dollar rates fall on US Jobs data 

GBP/USD fell yesterday after the Bank of England’s releases, and today the USA posted much better than expected jobs data, which has strengthened the US Dollar further and pulled GBP/USD rates even lower: 

Looking for the best deal of foreign exchange? 

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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Exchange Rates volatile due to interest rate speculation

Wednesday 5th August 2015
There was some movement on both GBP/EUR and GBP/USD exchange rates overnight, and it’s interest rate speculation again that’s driving exchange rates. After a quick look at the charts I’ll explain what’s going on. As you can see below Sterling/Euro rates have climbed to €1.4350 and Sterling/Dollar rates dropped a cent overnight: 

Sterling/Euro

Sterling/Dollar

GBP/USD - US Interest rates affect exchange rates 

Last night, one of the US Federal Reserve members, Dennis Lockhart, who is one of the people who decides on interest rates, said that it would take "significant deterioration" in the U.S. economy for him to not support a rate hike in September. This means that chances are increased that the USA will be the first major western economy to start pushing rates back up. The hint of higher interest rates tends to strengthen a currency due to the higher return on offer for investors. 

On the comments, the USD gained strength and pulled GBP/USD Rates down. As investors moved funds from the Euro into the Dollar, the single currency weakened accordingly, and as you can see from the graphs above, the GBP/EUR rate moved inversely to cable, rising by over 1% to €1.4350. 

On Friday, we see some very important jobs data from the USA at 13:30pm, and if these numbers beat forecasts, expect the decline in GBP/USD rates to continue. I am still of the view that GBP/USD rates won’t stay above $1.50 for very much longer. 

GBP/EUR – Thursday very important for exchange rates 

With many analysts now expecting the US to raise interest rates next month, many are also starting to look at whether the UK will do the same. Tomorrow (Thursday) is a very important one for the Pound. Here is the data we’re going to see from Britain: 

‘Super’ Thursday’s eco-stats include: Manufacturing Production, Industrial Production, a GDP growth estimate, the BoE decision on interest rates, the BoE Inflation report, a Statement from the BoE’s Monetary Policy Committee, and a Speech by the BoE governor Mark Carney. 

Phew. There’s a huge amount of data to chew on tomorrow, and taken as a whole will paint a very clear picture on what direction the UK economy is taking. I think that at least 2 of the 9 member MPC committee will vote for an interest rate hike, and if this happens and the other data is good, expect Sterling to gain in strength. We could well see a decent rise for Sterling exchange rates if the UK economic picture is a robust one. 

Do you need to exchange currency? 

I don't just provide regular updates on exchange rates;I help clients source some of the best currency deals available. I am the foreign exchange manager for one of the UK’s leading currency brokerages. In July alone we helped clients exchange over £35,000,000.00 and due to these large volumes we trade, our exchange rates are some of the best you can find anywhere. 

If you need to convert over £5000.00 and have your currency transferred to a bank account, then get in touch with me by clicking here. I can provide you a quote and you can see how much you can save compared to your bank or existing broker. We’re fully authorised by the FCA in the UK so you can trade with us knowing your funds are safe.

I look forward to hearing from you and providing you a quotation for your exchange. 

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. 

Do you have a currency transaction to perform? 

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Sterling gains on BoE MPC minutes

Wednesday 22nd July 2015 
Yesterday was not a good one for Sterling/Euro rates, with levels sliding all day from €1.44 to €1.42. The reason for the drop was renewed confidence about Greece, and in particular credit rating agencies increasing Greece’s rating as they felt there is now much less chance of them leaving the Eurozone. 

This morning, Sterling has fought back slightly after the release of the Bank of England (BoE) minutes from this morning’s Monetary Policy Committee (MPC) meeting. The full minutes can be read here.  

The key phrase I noticed was “the decision between holding Bank Rate at its current level versus a small increase was becoming more finely balanced”. This means that despite all 9 members voting to keep the interest rate at the record low of 0.5%, it shows that they are going to start leaning towards finally raising rates towards the end of this year. The next meeting is in 6 weeks’ time, and we may start to see some of the members voting for a hike in rates. 

This has given Sterling a boost, as the rumour of an interest rate rise usually does. The same effect has been seen on the US Dollar this week. 

View live currency graphs here

Today’s Data 

All eyes were on the Bank of England and the inflation report this morning, and at 10am there is a parliamentary inflation report. For the remainder of today, the only data of note is an Interest Rate decision and policy statement by the Reserve Bank of New Zealand. Their inflation is very low at the moment, and the NZD is very weak due to the low commodity prices (See my post about commodity currencies to learn more). I think there is a chance they will cut interest rates to try and boost the economy. If they do, then expect GBP/NZD rates to go higher. 

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. 

Click here to discuss your currency requirements today.

 

Pound rises on interest rate comments from BoE

Tuesday 14th July 2015
We have seen a sharp spike for Sterling this morning, after the Bank of England governor Mark Carney has said that the time for a UK interest rate rise is getting closer. This is despite figures this morning showing that inflation sits at 0%. This really shows how simple things like a few words from a central bank governor can affect exchange rates. Here's a look at how the Pound rose by over a cent against the Euro as soon as he made the comment at 09:53am:

Why did his comments cause the Pound to rise?

It's due to the fact that he has hinted interest rates may go up in the UK this year. Higher interest rates make Sterling a more attractive investment for investors due to the higher return on offer, and so the Pound has strengthened, pushing exchange rates up against other currencies. 

In recent times it's been things like Greece and elections that has affected the rate, but years ago things like interest rate movements and economic data were the main things that caused exchange rates to move. I'm sure there will be further developments tomorrow from Greece, and once that issue is resolved, focus is likely to return to traditional economic stats and things like interest 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. 

Click here to discuss your currency requirements 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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Sterling/Euro exchange rates & the General Election

Monday 30th March 2015
Exchange rates have been a little more stable in the last week, with the Pound/Euro rate remaining in a 2 cent range between 1.3550 and 1.3750 as the chart below illustrates: 

Interest Rates and Exchange Rates

In my last post, I pointed out the Bank of England’s chief economist had warned interest rates may need to be cut to combat zero inflation. Well on Friday the day after my post, the governor Mark Carney said precisely the opposite, which is that the next move in interest rates will likely be up. 

Interest rate speculation has been a major driver of Sterling strength of late, and the comments on Friday caused the Pound to recover. It should be noted though that 2 of the main decision makers within the BoE seem to be at odds with regards to which way the rate will go, which is only going to create more uncertainty. The fact remains that if the numbers continue to show inflation so low, a cut is more likely and this could weaken the Pound. 

General Election and Exchange Rates

For the next month, the main news will be the UK election. The Pound is likely to weaken against other currencies over the next month due to the election uncertainty, and as I outlined in a recent post, this is because the result is so uncertain. This is likely to push the Pound lower in the coming weeks. I personally don't think we'll see things back at €1.40 any time soon.

If you need to buy or sell Euros and would like to discuss your currency requirement with me and obtain a quotation, click here to send a free no obligation enquiry. On average the rates I provide are 3% better than banks and other financial institutions so you could save a significant amount of money. 

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What could affect exchange rates this week? 

Below I’ve listed the scheduled releases for the coming week that I think may affect exchange rates. Remember that other things such as election uncertainty could also change rates at any time without warning. To discuss your currency requirement in more detail, or have a chat about which direction the exchange rate may go, click here to send a free enquiry today. 

Tuesday 31st March 2015 – Today we have the latest UK GDP forges, which are expected to show monthly and annual growth at 0.5% and 2.7% respectively. If the numbers are worse than this then expect the Pound to fall against other currencies. GBP/EUR could also be affected today by the EU inflation and Unemployment numbers. For those watching GBP/USD then US Consumer confidence figures at 3pm is something to watch out for. 

Wednesday 1st April – Today the main events for the currency markets will be inflation numbers from Europe and the UK. This is important as it indicates future interest rate movements, and so often affects exchange rates. Construction and Manufacturing numbers from the USA could affect GBP/USD 

Thursday 2nd April – Nothing major from the UK today, but there is an ECB meeting that looks at the economy and financial markets. It’s basically an assessment for the EU economy so this could affect Pound/Euro rates. Most other data is from the USA – Unemployment Jobless figures and Factory orders. 

Friday 3rd April – Very quiet today as most markets are closed for Good Friday. The USA remains open however and we have some important releases; Unemployment and Non-Farm Payrolls. These numbers often move GBP/USD rates as the figures are often quite different to what’s expected. 

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Pound/Australian Dollar drops as RBA leaves rates on hold

Tuesday 3rd March 2015
At 3:30am this morning the Reserve Bank of Australia announced its decision on interest rates. The consensus was that they would cut rates to 2.00%, and that had already been priced into the market as it was widely expected. However, the RBA decided to leave rates on hold at 2.25%. 

Australian Inflation had fallen to a 6 year low, and the lack of Chinese demand had meant everyone thought a rate cut was on the cards in order to boost their cooling economy. It looks however like they are hoping the rate cut in China will boost demand. 

What does this mean for the GBP/AUD exchange rate? 

It caused the Australian Dollar to gain strength, and as you can see from the chart below the GBP/AUD rate fell from $1.98 to the low $1.96’s. You can see the immediate drop the moment the decision was announced: 

What's happening with Sterling/Euro rates?

The Sterling to Euro exchange rate over the last week has continued to strengthen, touching €1.38 over the weekend before dropping back into the €1.37’s. As the European Central Bank starts it’s Quantitative Easing programme in earnest, this and the ongoing saga in Greece continues to drive this currency pair. 

The negotiations over Greece’s debt seem to be making slow progress, and I think as and when a full agreement is put in place, this could start to give the Euro back some strength. We also have the election coming up in a few months which could also cause uncertainty and weakness for Sterling. 

For the moment however, 7 year highs are available for those that need to buy Euros. 

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Sterling rises on Interest Rate comments

Monday 8th December 
The Pound has had a good start to the week, rising by nearly a cent against the Euro to 1.2720 and also up against the US Dollar, from 1.5550 this morning to 1.5630 this afternoon: 

What has cause the Pound to gain against EUR & USD? 

There hasn’t been any significant data today, so I’ve put the rise down to comments from the Bank of England, that say the UK economy can cope with higher interest rates. They’ve stated that the majority of people with mortgages could cope with a rise in interest rates, if levels rose to 2.5% from their current 0.5% historic low. 

The comments mean there is more chance of a rate hike in the first half of 2015 and the Pound strengthened accordingly. (A currency strengthens on the rumour of higher interest rates, as it attracts investment into the Pound due the potential higher return on offer). 

It’s worth noting however that the Pound/Euro cross seems to be range-bound between 1.25 and 1.28 at the moment, so I don’t think we’ll see rates continue to climb. If you need to buy or sell Euros, get in touch for a free quote and a brief chat on the options you can consider to help you get the best rate.  

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What else could affect exchange rates this week? 

Tuesday 9th December – The most important releases today are from the UK, including Industrial and Manufacturing production, along with a NIESR GDP estimate, forecast at 1.8%, 3.2% and 0.7% respectively. If the actual numbers are higher or lower, the Pound could rise or fall accordingly. 

Wednedsay 10th December – Another important day for Sterling as we have the latest trade balance figures. These show the difference between what we import and export so can often affect exchange rates. Elsewhere GBP/NZD could change as we have an interest rate decision from New Zealand and a press conference afterwards. 

Thursday 11th December – Nothing of note from the UK today, but GBP/EUR could be affected by inflation numbers from Europe, and a monthly report from the ECB. We also have Australian Employment figures that could alter GBP/AUD rates, and in the USA we have raft of jobless numbers and the latest retail sales. 

Friday 12th December – Nothing from the UK today, and from the EU we have Employment numbers and Industrial production figures. We end the week with US Inflation figures, and a consumer sentiment survey. 

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iness buys and sells goods from the Eurozone. Whatever your currency needs, you could save thousands by achieving a better exchange rate. 

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Sterling/Euro falls into €1.24’s – will it go back up?

Tuesday 18th November 2014 
The Pound has continued to fall against the Euro, and today has dipped into the €1.24’s. A week ago rates were €1.28+ so this is a big drop in a short period of time. The rate started to drop when the UK inflation numbers came in very low, which I touched on in a post last week. This means that the Bank of England are likely to keep rates on hold for quite a while. 

The reason for today’s drop was twofold. Firstly we had further UK inflation numbers that were slightly lower than expected, compounding the view the economy isn’t ready for a rate hike, and the Pound dropped a little. Soon after, we had some sentiment data from Germany, Europe’s largest economy. This showed that sentiment rose in November for the first time in almost a year, surpassing expectations and raising hopes of an improvement in their economy after it dodged recession in the third quarter. 

This data gave some strength to the single currency, and made it more expensive to purchase. 

What will happen with Sterling/Euro next? 

It is very hard to call. On the one hand you can look at the trend over the last 3 months. If you look at the chart above, you can see that rates have dropped to these levels quite a few times, only to then bounce back up. This could well happen again, especially as the EU may well pursue a Quantitative Easing programme which could weaken the Euro. However this is not a given; past performance is not necessarily an indicator of future performance. 

Tomorrow we have the minutes from the recent Bank of England interest rate decision. Last time 7 of the 9 members voted to hold rates, and 2 voted to raise them. In the light of the recent inflation numbers, if less than 2 voted to raise rates this time, expect the Pound to fall further. 

When should you buy or sell Euros? 

Given there is no way to predict the market, the best course of action is to use tools to make sure you don’t get a lower rate than necessary. In this climate if I had Euros to buy or indeed convert back to Pounds, I would use a ‘Stop Loss’ order. 

This allows you to instruct me to convert your sums if the exchange rate drops below a pre-agreed level. If the rate gets better for you, great you can take advantage of a swing in your favour without leaving yourself at risk of a further drop in rates. 

This is just one example of the tools I offer to help you get the most out of your currency, in addition to very sharp exchange rates that are close to the mid-market level. If you have an upcoming currency requirement, why not get in touch with me by completing an enquiry form here. I can discuss your particular needs, run over your options, provide you a quote and see if we can save you money over your bank or existing broker. It’s free to make an enquiry and does not obligate you in any way. 

The exchange rates I achieve for my clients can be as much as 5% better than banks offer, and when converting large sums the savings often run into thousands of pounds. 

Click here to send a free enquiry today.

What could affect exchange rates this week?

Monday 3rd November 2014 
We have seen Pound/Euro rates reach €1.28 today, due to slightly better than expected manufacturing numbers that gave Sterling a boost. The other reason rates have climbed up from €1.27 is a weaker Euro following last week’s decision from the USA to end their QE programme. 

The end of QE in the states strengthened the US Dollar, pulling rates down below $1.60 where they remain today. 

Below I have listed this week’s economic numbers that I think could affect exchange rates. I personally think that Pound/Euro will slip back away again in the coming days, as has been the general trend in the last few weeks. The high GBP/EUR rate is not good for the UK economy as it makes our goods and services more expensive. 

In the last few weeks we’ve seen BoE members and even the Prime Minister stating their wish for interest rates to stay at record lows for a long time to come. This could well be an attempt to weaken the Pound to help our exports, and I believe this could hold the Pound back from making further gains.

If you need the best exchange rates, would like a quote, or to simply find our more about the foreign exchange services I can offer, click here to send me a free no obligation enquiry today. 

This week’s economic data releases 

Tuesday 4th November – There are various economic figures from Australia today, including an interest rate decision, Trade Balance figures, and the latest Retail Sales numbers, so GBP/AUD could face some volatility. In the UK the only data of note is construction numbers. Over in the USA we have Trade Balance numbers, and the Bank of Canada’s Governor gives a speech. New Zealand has its latest employment numbers which could affect GBP/NZD 

Wednesday 5th November – A very quiet day for economic data releases. The only UK release is Services PMI. The Eurozone releases Retail Sales numbers in the USA we have manufacturing figures. 

Thursday 6th November – Today could be interesting for the Pound. We have Industrial and Manufacturing numbers at 09:30am, followed at lunchtime by the BoE decision on Interest Rates. I expect no movement, but any accompanying statement could affect Sterling. The Eurozone also has its interest rate decision. Again rates will be left on hold in all likelihood, but any hint of stimulus in the accompanying statement could weaken the Euro, pushing up GBP/EUR. In the afternoon, a GDP estimate will also be closely watched as an indicator of how the UK economy is performing. 

Friday 7th November – Today’s main UK release is Trade Balance data. This is important as if exports are down, it could mean the BoE talking the Pound down to try to help this area. In the USA we have Unemployment and Non-Farm payrolls, which are very hard to forecast. As a result, the actual figures often surprise the markets and affect GBP/USD rates. 

For more information on how the above could affect your currency requirement, or to get an exchange rate quote to compare with your bank or existing broker, click below to send me a free enquiry now. 

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GBP/EUR gains unlikely as UK interest Rates set to remain low

Wednesday 29th October 2014 
Pound/Euro rates have slipped slightly in the last 24 hours, bringing the mid-market rate down to €1.2647. While a little lower than the recent 6 year high, it’s still a very attractive buying level for Euros given that last summer rates were as low as €1.14. 

GBP/EUR gains unlikely as UK interest Rates set to remain low 

Part of the reason the Pound has failed to go any higher against the Euro is the fact interest rates are no longer expected to go up any time soon. Reinforcing this view was a speech this week from the Bank of England (BoE) deputy governor Jon Cunliffe. 

In it he said that interest rates can be kept at their current record low level for longer than first thought, saying that weak pay and lower inflation, coupled with slower UK growth and slowdown in the global economy meant the BoE should remain "cautious". 

So with rates now set to remain at their record low of 0.5% for quite some time, it’s hard to see what would push Sterling exchange rates higher. Those that need to buy Euros should therefore consider locking in a rate now while it is still close to the 6 year high. 

Those selling Euros however should be cautious. While the Pound is unlikely to gain, a deterioration of the EU economy could weaken the Euro, meaning less Pounds for those that are converting the single currency back to Sterling. 

If you need to convert Pounds to Euros, or Euros to Pounds, click here to get a free quote and find out more about the foreign exchange services I offer. Rates I source are up to 5% better than banks can offer, so you could save thousands of Pounds by comparing the rates I offer. 

Pound/Dollar set to drop? 

GBP/USD has been on the way down for a few months now, dropping from $1.72 to $1.60. Currently rates hold firm around $1.6140. However the US Federal Reserve is expected to announce the end of its quantitative easing (QE) programme later, and this could strengthen the Dollar, make it more expensive to buy and pull the GBP/USD rate down further. 

The FED has been gradually cutting back the scheme, which began in 2008, since late last year. The end of QE, assuming it does indeed come, will nonetheless be an important milestone in the repair of the US economy and likely strengthen the Dollar. 

Whether it makes a difference to the GBP/USD rate however remains to be seen. As it’s widely expected to happen, it will be priced into the rate already, but it’s impossible to know by how much. I wouldn’t be surprised to see rates drop below the $1.60 level throughout the rest of 2014. 

If you have a requirement to buy or sell USD, click here to send me a free enquiry to see how I can assist you in getting the best possible rates.