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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Pound falls further on low inflation

Tuesday 14th October 2014
Sterling has fallen by a further cent today against the Euro, with rates dropping down into the €1.25’s. Against the US Dollar, rates have dropped by 1.5 cents bring rates down into to around $1.59. What has caused the Pound to fall? 

It is due to very low UK inflation numbers. Figures this morning showed that UK inflation fell to a 5 year low of 1.2%. The reason this has caused rates to fall is that these new low inflation numbers meant that an interest rate rise in the UK is very unlikely in the short term. I expect the Bank of England will now hold off well into 2015, probably after the general election. 

On the one hand, the UK economy is the fastest growing in the developed world, and this would normally mean a rise in interest rates. Indeed it’s this speculation that has been driving the Pound up in recent months. However these latest figures change all of that, so it looks like the Pounds run has come to an end for the time being. 

In my most recent report I warned that this could well be the case, and that rates were unlikely to go higher. That has proved to be true and rates have now tumbled away, repeating the trend as I suggested would be that case. 

If you need to buy or sell Euros, click here to make a free enquiry. 

What else could affect exchange rates this week? 

Tomorrow is a key day for Sterling/Euro rates, as we have the latest Unemployment figures for the UK In addition to this we have 2 speeches by the ECB president Mario Draghi at 8am and 7pm respectively, and his comments could cause a change in the value of the Euro. 

For Sterling/Dollar, watch out for a host of economic data from the states such as Retail Sales, manufacturing, Unemployment and House data. Also on Friday we have a speech by FED chair Janet Yellen. If these figures are impressive as recent US data has been, then we could see the US Dollar strengthen and GBP/USD rates drop even further. 

Are you looking for the best exchange rates? 

If you have a currency transaction to conduct in the coming weeks or months, then get in touch with me to see how I can help. I can provide excellent commercial exchange rates that are usually significantly better than banks and other brokers. I can also explain what is likely to move exchange rates in the coming weeks to help you make an informed decision on when to fix a rate. 

I have worked in financial services for over 15 years, specialising in commercial foreign exchange for the last 10. Why not take advantage of my free consultative service to see if I can save you money on your currency exchange. I look forward to hearing from you. 

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

Pound recovers over interest rate confusion

Monday 18th August 2014 
Things can move very quickly in the currency markets, and the Pound has recovered some of its losses today. So what has caused the Pound to rise? Strangely it is exactly the same as what caused it to fall last week; comments from the Governor of the Bank of England, Mark Carney. In today’s report I’ll look at the mixed signals he is giving on interest rates, and why this is affecting exchange rates.

Remember I can help you achieve exchange rates much better than available at banks, so if you need to convert one currency to another, click here to send me a free no obligation enquiry today.

Mark Carney continues to confuse the market over interest rates 

In my post last Wednesday, I explained that it was the expectation of interest rates going up in the UK that has been pushing the Pound higher and higher this year. Last week however Mark Carney hinted that rates would not be going up this year, and that is what caused the Pound to drop last week. (Higher interest rates strengthen a currency and vice versa).

Over the weekend however in an interview in the Sunday Times, he was very non-committal, saying that holding off raising rates is "an expectation not a promise". 

He seems to change his mind quicker than the weather in the UK; one week he says that “rates would not rise above their current historic low, of half a per cent, before next year because of a "remarkably weak" rise in real wages.” and just a few days later he says that “the base rate may have to go up before households enjoy a rise in living standards.” 

So which is it? Confused? We are, and I think Carney may be too!  A little while ago his mixed signals over interest rates have been compared by one MP to him blowing hot and cold, like an unreliable boyfriend, and it's causing volatility in exchange rates.

What effect has this had on exchange rates? 

His comments last week caused the Pound to fall, however this morning the Pound was up again as markets try to decipher when interest rates will go up. 

So which was could rates move in the coming weeks? It’s impossible to know, and much will depend on what Carney says next.

The most important releases for the UK will be Wednesdays Bank of England minutes. These will show what Carney and his Monetary Policy Committee discussed when they recently decided to keep rates on hold. With Carney not giving a very clear picture on what his thoughts are with interest rates, these minutes will be watched very closely to try and decipher what the other 8 members of the rate setting committee think. If one or more of them voted for a rate hike, expect exchange rates to go up. If all 9 members voted to keep rates on hold, expect the Pound to fall. 

Are looking to get the best possible exchange rates? 

Get in touch to see how I can help you. Regular readers will know there is alot that can affect the exchange rate, and taking advantage of my 10 years  expertise in the currency markets could save you thousands.

You can have a free no obligation chat with me about the exchange rate, and I can explain what is moving the rate and discuss which way it could move in the future. In this way you can make an informed choice on when to fix your exchange rate. 

When you decide to fix a rate, I can provide commercial exchange rates that are significantly better than banks offer, by as much as 5%. This means that I can save you thousands of Pounds when converting one currency to another. 

 Click here to make an enquiry today and see how much you could save.

Pound falls as interest rates set to remain low for rest of the year

Wednesday 13th August 2014 
As you can see from today's Pound/Euro graph below, Sterling has plummeted today by around 1% against other currencies on comments made by the Bank of England governor Mark Carney, effectively signalling that interest rates are to remain low for the rest of this year. In my post yesterday I warned that if he was dovish about the UK economy then exchange rates could fall, and this is exactly what we have seen happen today. Let’s take a closer look at what he said and why the Pound has fallen against the Euro. 

What did Mark Carney say in his speech? 

 
The Bank of England has halved its forecast for average wage growth, and the Bank's latest quarterly economic forecast also indicated that it believed the level of spare capacity in the UK economy has narrowed to around 1% of GDP. 

Mr Carney said there were still "a lot of uncertainties to contend with" given record participation in the jobs market, "remarkably weak" wage rises and a rising number of threats to the global economy.   

He said that whenever interest rates did increase, they would still do so gradually. Chris Williamson, chief economist at economic data firm Markit said it is was likely that "calls to raise interest rates would start to gather strength in coming months," but that an interest rate rise still looked some way off.

Read a full outline of his comments here.

What does this mean? 

Effectively he is saying that as wages aren’t growing fast enough, there isn’t enough spare capacity in the economy to allow a raising of interest rates. This means that it is likely interest rates won’t be going up anytime soon, and when they do they will only rise very gradually.

Why has this caused the Pound to fall? 

Sterling has been strong recently on speculation interest rates will be going up, as this drives investment into the currency due to the potential higher return on offer. Today’s comments indicate that rates will remain at their record low of 0.5% for some time to come. This means that investors have sold the Pound for currencies that offer a higher return, and the sell-off has caused the Pound to weaken and exchange rates to move down. 

What does this mean for your currency requirement? 

The currency markets are very volatile, and when converting large sums even a small movement in the rate can end up costing you thousands. The service I provide is twofold. Firstly you can have a free no obligation chat with me about the exchange rate, and I can explain what is moving the rate and discuss which way it could move in the future. In this way you can make an informed choice on when to fix your exchange rate. 

When the time comes to fix a rate, I can provide commercial exchange rates that are significantly better than banks offer, by as much as 5%. This means that I can save you thousands of Pounds when converting one currency to another. 

If you need to convert funds and would like to discuss what is happening with rates, and obtain a quote to compare with your bank to see how much you can save, click below to send me a free no obligation enquiry today. It is free to make an enquiry and does not obligate you in any way. 

Click here to make an enquiry today and see how much you could save.

Pound/Euro recovers, but tomorrow is key for what happens next

Tuesday 12th August 2014 
Sterling has steadily recovered its recent losses today, clawing its way back to around €1.26 vs the Euro. This was in part due to an EU economic sentiment survey that was released this morning that showed there isn’t much optimism about the financial health of the EU economy. This caused the Euro to weaken off slightly and become cheaper to buy. 

That wasn’t the only reason though, as the Pound rose against most other currencies today including the US Dollar. I think this is purely Sterling recovering from the drops we saw at the end of last week due to geopolitical tensions in Ukraine and the Middle-East. The Chart below shows how the Pound/Euro rate has moved throughout today.

Bank of England and Unemployment figures on Wednesday - a very important day for exchange rates

Tomorrow at 09:30am we have some very important UK economic releases. The latest UK Unemployment figures are released, and as they are a good overall barometer of the health of the economy, they could affect Sterling exchange rates. I expect the figure to come in around 0.7%. Any lower than this would likely cause exchange rates to go up, and vice versa. 

Of more importance will be the BoE Inflation report and following speech by the BoE governor Mark Carney. Regular readers of my blog will now that it is the rumour of interest rates going up in the UK that has been strengthening the Pound to 2 year highs against the Euro, however it’s still not clear if rates will go up later this year, or early next. (The rumour of higher interest rates tends to strengthen a currency due to the higher return on offer, making investors buy the Pound). 

We will be closely watching what Carney says tomorrow. Any hints of rates going up would cause the Pound to rise, however if he is quite negative about the economy saying that there are lots of factors to consider such as wage growth and house prices, then the market could take this as a sign rates won’t go up until 2015. If that’s the case, expect the exchange rate to drop. 

Fix an exchange rate now or wait to see if rates will improve? 

This is a question I’m asked many times each day, and the simple answer is nobody knows which direction exchange rates will take. Personally I think that we won't see much more than €1.26/€1.27 in the near term, and there are lots of risks to the downside that could move things down, such as the Scottish Independence vote which I talked about recently. What we can do however is look at recent trends, the things that are moving rates, and make an informed decision on when to fix your rate. 

Do you need to buy Euros perhaps for property overseas? Are you bringing your funds back to the UK after selling? Maybe you are a business that deals internationally and currently use your bank? 

Whatever your currency needs are, get in touch for a free quote on the rates I offer. I have over 9 years’ experience as a currency broker and can help you achieve exchange rates far better than banks and other financial institutions may offer. It costs nothing to make an enquiry and you could find the savings run into thousands of pounds. 

Click here to send me a free enquiry today. 

A busy week for exchange rates - what could happen to the Pound?

Monday 11th August 2014 
Good afternoon. Exchange rates have recovered slightly today after the drops we saw at the end of last week, caused by global uncertainty over the conflicts in Ukraine and the middle-east, as explained in my most recent post. Today has been quite quiet as there is little economic data for the markets to digest. 

This week however will be anything but quiet, I think today could be the calm before the storm as we have some significant data releases this week that could affect which way exchange rates move in the coming weeks. 

For the UK, we have unemployment figures, a Bank of England (BoE) report, the latest Gross Domestic Product (GDP) figures, and a speech by the BoE Governor Mark Carney. In recent speeches he has given mixed signals on when interest rates may start rising, even being accused of behaving like an unreliable boyfriend, and that had caused the Pound/Euro rate to go up or down. So his comments could well cause further volatility in exchange rates. 

So, lot's that I think could affect the market this week and a full breakdown of this week’s data is listed below. 

Do you want the best exchange rates? 

Are you buying selling property abroad and need to convert funds? Do you have accounts overseas you need to keep topped up? Perhaps you are a business that buys and sells goods in the Eurozone and need to convert between Pounds and Euros? 

Whatever your currency needs, I can help you source excellent exchange rates, fast international transfers, and various contract types to protect against markets moving against you. 

Send me a free enquiry today to get a quote and see how we can help you. 

This week’s economic data releases 

Tuesday 12th August - There is no UK data of note, however GBP/EUR rates could still be affected as we have EU and German Economic Sentiment figures released at 10am. We also have House price data from Australia that could move GBP/AUD, and the monthly US budget statement could give indication on future US economic policy, so watch for GBP/USD today. 

Wednesday 13th August – In my view today is the most important one for Sterling exchange rates. We have the latest UK Unemployment numbers, along with a Bank of England inflation report, followed by a Speech by BoE Governor Mark Carney. As I stated above, his comments could cause changes to the value of the Pound. Elsewhere, US Retail Sales are released later this afternoon from the United States. 

Thursday 14th August – Today is busy for EU data – Inflation numbers, Gross Domestic Product, and a monthly report from the European Central Bank, all of which will give indications how the EU economy is performing and so GBP/EUR rates could be affected. From the USA today we have the latest Jobless Claims numbers 

Friday 15th August – Another important day for the Pound as we have the latest Gross Domestic Product figures. I expect the monthly figure to be 0.8% and the annual figure 3.1% - any lower than this expect exchange rates to drop and vice-versa. Elsewhere the USA has inflation figures released later in the afternoon. 

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

Pound falls after uncertainty over interest rate timing

Tuesday 24th June 2014 
The Pound has fallen against other currencies this morning after the Bank of England chief Mark Carney was quizzed by MP’s over their recent inflation report and comments on interest rates. 

When being quizzed this morning he cast doubts on when interest rates may rise. In recent weeks he made comments that the market took as a sign rates would be on the way up later this year, which gave the Pound some strength and pushed exchange rates up to multi-year highs. 

So what did he say and why has the Pound fallen?

The exact timing of a hike is now in doubt however. He said that any increases in interest rates would be driven by economic data, and that the most important aspect of the guidance they’re giving is that any increases in the rate when they come, will be limited and gradual. 

He also said that the Pound’s strength could be a worry. “On the export side where the data is a bit choppy ... there are still reasonable challenges there given the weakness of demand abroad and the strength of sterling, the recent strength of sterling which has not yet been supported by improvements in productivity and competitiveness.” He had previously warned that a strong Pound is not good for exports. 

One MP accused the governor of being like an unreliable boyfriend, blowing hot and cold in his hints over interest rates, and this is reflected in the up and down volatility of Sterling presently. 

As you can see from the chart below, the Pound fell after his comments, falling from 1.2530 to 1.2460 against the Euro, and dipping below $1.70 against the Dollar. So it seems the recent highs were a short lived spike and the market has now corrected slightly. 

Pound/Euro today:

So what might happen next with exchange rates? Up or down? 

We are now below the key technical levels that Sterling recently broke: €1.25 against the Euro and $1.70 vs the US Dollar. Given today’s comments, it’s likely the market will be very volatile as data releases indicate how the economy is performing, and the markets try to gauge what this means for the Pound. 

For those converting currency back to Pounds, then the spike today is a slight move in your favour that is worth considering taking advantage of. I think medium to long term the Pound will continue to remain strong. For those with Pounds to convert to another currency, the short term outlook is very hard to predict. Exchange rates are still very attractive, so you could fix a rate now to protect against it dropping further, or place a Stop Loss order to limit any losses should the market drop away, while still being able to take advantage of a recovery. 

Regardless what your currency requirement is, I can help you with both excellent commercial exchange rates much better than banks and other brokers may offer, in addition to expert market knowledge and a wide range of currency contracts to help you get the most out of your exchange. 

Click here to send me a free no obligation enquiry and find out how I can help you. 

(Please note I can only help with bank to bank transfers of amounts of £5k+, we cannot assist with cash or holiday money.)

GBP/EUR rises to €1.22 after BoE Inflation report

Wednesday 12th February 2014 
Sterling has gained significant strength today following the Bank of England’s inflation report, and the press conference by Governor Mark Carney that followed. In today’s post I will look at exactly what he said, the effect it had on Sterling exchange rates, and what may happen to currency rates in the coming weeks. 

Pound gains strength on Mark Carney’s BoE speech. 

This morning at 10.30am the Bank of England published its quarterly inflation report, and this was followed by a speech from the BoE governor Mark Carney. You can read a full report on his comments here on the BBC website.

In effect the speech caused the Pound to rise against other currencies by around 1%, pushing GBP/EUR rates to €1.22 and GBP/USD up to $1.6550 – excellent buying levels for both currencies. 

The main reason for the gain was an increase in the UK’s growth forecasts. The Bank revised up its projection for UK growth to 3.4% this year, from a previous projection of 2.8%. This gave Sterling a nice boost and caused exchange rates to rise. You can see from the chart below the effect it has had so far on Sterling/Euro:

So is the Pound likely to go up or down in the coming weeks? 

The Pound will likely remain strong at current levels, so the direction of exchange rates, GBP/EUR in particular, will now rest on what happens in the Eurozone. European growth is quite poor, and there is the chance they may have to cut rates. This could cause the rate to rise further. 

This afternoon at 15:30pm there will be a speech by the ECB president Mario Draghi. If he hints at a rate cut, Pound/Euro may rise higher still. If however he hints rates will remain low for the time being, we could see the spike today retract back to the €1.20’s. 

There is also the persistent strength of sterling which adds to the BoE’s challenges. If the Pound gets much stronger and the Eurozone continues to face problems, it’s going to affect our exports which means any further gains could be limited as the BoE moves to keep in check any significant rise in the Pound. 

Carney also said that interest rates in the UK will remain low for some time to come, adding that while he wouldn’t be a pessimist about the ability to return to (normal) rates, it is well beyond the forecast horizon of the Bank of England. 

What can you do if you need to buy or sell Euros? 

Euro buyers should look at today’s gains and consider that we are less than 1 cent away from a 13 month high. We’ve got to these levels several times in the last few months, and each and every time the rate drops back away within several days. You may wish to fix a rate now to take advantage of the gains. You can do so even if you don’t need your Euros for up to 2 years, by lodging 10% of the total you want to convert, and I can guarantee your rate on the full amount. 

If you are selling Euros and moving them back to Sterling, then today’s events have pushed rates the wrong way for you. I don’t expect the mid-market level to drop below €1.20, and bad news for the Eurozone would cause rates to move further against you. A stop loss order is a good strategy to employ in the current conditions. 

Get in touch to discuss your options. 

How to go about getting the best rates, at the best time 

The first step is to get in touch with me to take advantage of a free consultation over the telephone. I can discuss your particular requirements and timescales, and then let you know the different options you can consider, such as Stop Loss Orders and Forward contracts. You can then make an informed decision on when to fix a rate. 

When you decide to do so, I can provide you a quote to compare with your bank. The rates I can source are up to 5% better than banks usually offer, so you can save a considerable sum by taking advantage of my services. 

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

Alastair Archbold.

Pound falls significantly after Mark Carney comments

Friday 24th January 2014 
Good afternoon. We have seen Sterling weaken significantly today, after the Bank of England governor poured cold water on the chances of interest rates going up any time soon. 

Speaking at the World Economic Forum in Davos, he admitted that its new "forward guidance" on increasing interest rates will need to change because unemployment has fallen far faster than expected. He added it was time to "evolve" the guidance, raising the possibility the Bank may abandon the 7% unemployment trigger to consider an increase in rates. You can read more about what he said here on the telegraph site. This is what happened to Sterling/Euro rates after he spoke:

What does this mean for exchange rates? 

Earlier in the week the excellent unemployment figures pushed Sterling to a 12 month high against the Euro, and this was because the level was falling to the 7% target that analysts thought would trigger an interest rate rise. 

The comments from Mark Carney today counteract that, and as a result the gains are gone, and as is often the case the spike was short lived, the Pound has fallen back away. I think it’s now unlikely Sterling will make any further significant gains now the market has corrected, although we are still above €1.20 against the Euro which is a good buying level. Those that need Euros may wish to fix a rate to protect against rates falling further. 

I have been saying for some time that if exchange rates rose much higher, don't be surprised to see the Bank of England move to weaken the Pound back off so that UK exports don't become too expensive, and that's exactly what we have seen happen today.

If you are converting Euros or another currency back to Sterling, then today's move represents a decent move in your favour. Medium to Long term, the Pound will likely strengthen again, so it’s worth discussing your options with me regardless of which currency you need to move. 

Getting the best exchange rates 

This is all about timing. If you look at my post on Monday, you will see I highlighted the fact that Wednesday’s unemployment figures would be key for Sterling, and indeed they were as we saw rates surge. I also warned that any comments from the BoE that hinted no rate rise was on the cards would cause the Pound to drop in value, which again proved to be the case. 

This demonstrates that having a good currency broker on your side to help explain what could move the market is key to getting the best possible exchange rates. If you have an upcoming currency transfer to make, and would like to discuss your requirements, then you can click below to send me a free no obligation enquiry. I can discuss what you need to do, run over the options available to you, and explain what could happen to move rates either for or against you. 

Click here to send a free enquiry now 

In this way you can take control of your requirement and make an informed choice about what to do. Getting your timing right and achieving a good exchange rate can save you thousands of Pounds. 

I will be back on Monday as usual, with a full breakdown of what is happening throughout next week that could affect exchange rates. 

Have a great weekend. 

Alastair Archbold

Sterling surges higher as Mark Carney issues Forward Guidance

Wednesday 7th August 2013 
Good afternoon. Today has been extremely volatile on the currency markets with Sterling surging higher against other currencies. The new Bank of England governor Mark Carney addressed Parliament and delivered his Quarterly inflation report. 

After months of decline for Sterling, the Pound has surged against other currencies today, so in my post this afternoon I will analyse what he said, the impact on the economy, why it caused exchange rates to rise, and what this means for exchange rates going forwards. 

‘Forward Guidance’ from the Bank of England 

The new Bank of England (BoE) governor Mark Carney today addressed parliament, giving his quarterly inflation report, his first since taking over the helm last month. It was already widely expected he would outline his new policy of ‘Forward Guidance’ and indicate that interest rates would remain low for some time. 

How did it affect exchange rates? 

 

As you can clearly see from the chart, when the speech started at 10:30am, Sterling immediately dropped quite significantly, as had been expected. You can see the dip at 10:30am this morning when Pound/Euro rates fell from 1.1530 to 1.1440.

The dip was not to last however, and very quickly the Pound recovered its losses, and kept on going. Again looking at the chart you can see the exchange rate rocketing higher, above where it started the day, and eventually levelled out around 1.1645 against the Euro. 

Click here to get a quote on our commercial exchange rates. 

So why did the rate drop, and then make a huge recovery? 

Firstly the reason it dropped was speculation that he would indeed say interest rates would remain low for some time. Market analysts, myself included, have been saying for some time that if he did indeed say interest rates would remain low, expect Sterling to drop, and initially this is indeed what we saw. 

The reason there was such a massive bounce back was the terms that he outlined as parameters for when rates would start to rise. He pledged to keep them on hold until the official unemployment rate fell below 7%. This is his ‘forward guidance’. Under its central forecast, though, the Bank does not expect unemployment to fall to 7pc until September 2016. So in effect, he’s saying interest rates will remain low for another 3 years. 

So you would have expected the Pound to fall further on this news, however Economists said traders were expecting a much tougher target than 7 % unemployment, hence the reason for today’s robust performance for Sterling. The Institute of Economic Affairs said Mr. Carney's forward guidance was "the most dangerous development in UK monetary policy since the late 1980s". So experts are mixed on the effect it will have. 

So what does this mean for the economy? 

If rates do remain on hold until 2016, they will have been at their record low for nearly 8 years. The last time this happened was the 12 years that spanned the Second World War and the period of austerity that followed. 


The economy does seem to be recovering however. Recently we’ve seen good Retail Sales, good growth figures, strong manufacturing and industrial production, good growth forecasts and decent house price increases. And although welcoming the recovery, Mr. Carney stressed that it “remains weak by historical standards”. 

“There is understandable relief that the UK has begun growing again. But there should be little satisfaction. Much is at stake as we seek to secure the recovery and return inflation to target,” he said. 

The Bank expects inflation to remain at 2.9pc this year, fall to 2.4pc by the end of 2014 and hit 2pc in late 2015. The Bank stressed that it will keep the stock of quantitative easing steady at £375bn until the end of 2016 as well, and could increase it if the economy slipped backwards. 

You can read a detailed report here on the BBC website of what he said and the impact on the economy.

What does this mean for exchange rates? 

Right now this means good buying opportunities for anyone that is buying a foreign currency with Sterling. The gains are a surprise to the market, and so if you need to buy currency, consider taking advantage of the gains we have seen. We can fix your exchange rate for up to 2 years into the future, and you only lodge 10% of what you want to convert now. This protects you from the rate falling. 

Moving forwards much will depend on economic figures. If they start to disappoint, then we could still see further QE from the BoE which would cause the Pound to fall back away. 

Need Euros at the best exchange rate? Send me a free enquiry. 

For those selling converting currency back in to Sterling, rates are now moving against you. A week ago the Euro to Pound rate was close to a 2 year high, with Forward guidance in place and the economy recovering, further good figures could mean the rate gets worse for you. 

Selling property abroad and want the best Euro to Pound rate? Make a free enquiry now and find out about your options.

How to get the Best Exchange Rates

The first step is to send me a free enquiry by clicking here. I can discuss your requirements in detail, run over the options you have available, and help you decide on the optimal time to convert your funds. This means you can make an informed choice on what is best for you.

When you decide to fix a rate, the levels I can achieve are incredibly good commercial rates, that are up to 5% better than you can achieve at banks and other financial institutions. 

Send me a free enquiry now and find out how good our exchange rates are.

Pound/Euro rises from 3 month low after BoE MPC Minutes

Wednesday 17th July 2013 
Good afternoon. It’s been an interesting week for Sterling exchange rates, with GBP/EUR falling to its lowest in more than 3 months, before recovering on positive news from the Bank of England this morning. In today’s post I’ll take a look at what has caused the swings in exchange rates. 

Pound hits 3 month low vs. Euro 

Earlier this week, poor inflation figures pushed Sterling lower, dropping into the €1.14’s against the Euro, which is its lowest in more than 3 months. The reason the Pound weakened is that the economic numbers lent support to the case for more monetary stimulus from the Bank of England. 

It has been speculated for some time now, that the new BoE governor would pursue aggressive Quantitative Easing, which would weaken the Pound significantly. This view was not to last however, as today we saw the latest minutes from the Bank of England’s (BoE) Monetary Policy Committee (MPC) meeting. 

Bank of England’s MPC vote unanimously to hold QE and interest rates, causing a surge in exchange rates. 

This morning at 09:30am, the minutes to the decision a few weeks ago to hold off QE were released. These showed that the Bank of England had voted unanimously against increasing its quantitative easing programme at its latest meeting, sending the Pound higher. 

The vote surprised those who were hoping to see signs of more stimulus measures from the Bank. Indeed I was expecting at least 2 or 3 of the members to continue voting for QE as has been the case for several months. 

The fact that all 9 members decided against QE dampens speculation that Mr Carney's arrival might prompt an injection of additional monetary stimulus sooner rather than later. 



As you can see from the clear spike in today’s GBP/EUR chart, the news immediately sent Sterling over a point higher against the Euro, lifting the Pound from its recent slump. 

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UK Unemployment 

Also sending the Pound higher was the news that UK unemployment fell by 57,000 to 2.51 million in the three months to May, the Office for National Statistics said. Ministers said it showed that recovery was taking hold, but critics said the human costs were still too high. 

It seems that even with low growth rates, the UK economy can create jobs. Since this time last year about 300,000 more people are in work. And that continues to surprise economists. In past economic downturns. Unemployment has risen much higher - and fallen very slowly. 

The better figures, combined with the BoE vote, has helped the Pound recover and exchange rates have risen as a result. 

Summary 

Things can turn around very quickly in the currency markets, and this is what we have seen today. Doom and gloom and a 3 month low has turned into economic optimism and a strengthening Pound, all within 24 hours. 

If you are looking for the best exchange rates to buy or sell a foreign currency, send me a free enquiry today. I can discuss your requirements, explain what is moving exchange rates, and help you to decide when to fix your rate. 

When that time comes, I can help you achieve rates of exchange that can be up to 5% better than available at banks and other financial institutions. When converting a large sum, using my services can save you thousands of pounds. 

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Will Pound/Euro rates go up or down in the coming months?

Friday 28th June 2012 
Good afternoon. The last week has seen the Pound/Euro exchange rate fall away as I have been predicting could happen for a few weeks. Sterling also fell against other currencies, due to data showing the UK economy is not quite as healthy as thought. 

In today’s post I will look over what has caused rates to move recently, what data is coming this week that might affect rates, and look at ways you can protect against the exchange rate moving against you.

• Pound weakens following revised growth forecasts 
• New Bank of England governor takes over this week 
• Announcement due Thursday on QE and interest rates 
• Where GBP/EUR and GBP/USD could go in coming months 
• Getting the best exchange rates

Pound weakens following revised growth forecasts 

There was a revision to UK GDP this week, which is an overall measure of growth in the economy. The numbers were both good and bad news. Let me explain. The ONS periodically updates its previous measures of growth, and they have said that growth was flat in the first quarter of 2012, revised from an earlier estimate of a 0.1% contraction. This means that the UK economy did not experience a double-dip recession at the beginning of 2012. That was the good news. 

However the revised figures showed that the economy is now estimated to have dropped by 7.2% from peak to trough, against a 6.3% fall previously recorded. That means that GDP in the first quarter of 2013 was 3.9% lower than its peak in the first quarter of 2008 - previously it was estimated to be 2.6% below. 

So in a nutshell this means that the UK had fallen deeper into recession than previously thought, meaning we therefore have further to go to recover lost ground. 

So what does all this mean for exchange rates? Well after the numbers were released, Sterling fell quite sharply against other currencies. This is due to the fact the economy is not as healthy as previously thought, and increases the chance of robust action from the Bank of England to combat the slump. I will go into more detail about what the BoE might do, and the effect this could have on exchange rates… 

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New Bank of England governor takes over this week 

This week the new governor Mark Carney takes of the helm of the Bank of England. So what does he have to look forward to? The economy remains trapped in the longest downturn for a century, the banking system is still broken, and the financial markets are in a febrile state. Interest rates have been at a rock bottom 0.5 per cent since March 2009 and £375billion has been pumped into the economy through quantitative easing to drive growth despite inflation remaining stubbornly above the 2 per cent target. A nice welcome then!

He knows the challenges he is facing, and he has already hinted that he will take robust action to return the economy to growth. This could mean, amongst other things, a re-start of Quantitative Easing. 

If he does decide to add more to the £375bn already pumped into the economy, then the likelihood is that the Pound may weaken significantly, pulling exchange rates down. Of course he may decide instead to start raising interest rates, which may strengthen the Pound due to the better return on offer. 

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First meeting for new Governor this week 

On Thursday, Carney will make take his first meeting at the BoE’s rate setting Monetary Policy Committee, and it will be interesting to see how many of the 9 members vote for an increase in QE. We’ll have to wait 2 weeks to see who voted for what, but it will be interesting to see what Carney does in his first week in the job. I personally don’t expect QE, but it remains a possibility.

Protecting against adverse exchange rate movements 

With so much volatility and uncertainty surrounding the UK and global economy, it’s impossible to predict where exchange rates will move. Let’s look at Pound/Dollar rates as an example: In the last month alone we have seen rates as low as 1.50 and as high as 1.57 – a fluctuation of nearly 5% in just a few weeks, meaning a typical purchase of $350,000.00 has differed in cost by over £10,000, clearly illustrating how quickly exchange rates can move, and the impact of these fluctuations on the cost of a currency purchase. 

Against the Euro, we have seen rates between €1.13 and €1.23 this year alone. And nobody knows which direction rates will take for the remainder of the year. Some forecasts suggest more QE could weaken Sterling by between 10% and 15% which would mean exchange rates could tumble. 

Other forecasts suggest an escalation of the EU debt crisis will weaken the Euro and rates will rise. One thing is for sure, rates will not remain stable and any fluctuations can have a huge impact on how much your currency costs you. There are ways to take control of the market however, and not simply leaving things to chance and hoping rates will move the way you want them too. 

To give you just a few examples: You could fix the rate now for up to 2 years, and only lodge 10% of the total to be converted now. This protects against the rate dropping. Alternatively you could place a ‘Stop Loss’ or ‘Limit’ Order, which automatically secures your rate if it rises above, or drops below, a pre-agreed level. 

Click here to discuss how we can help you protect against rates falling.

So how do you go about getting the best exchange rates? 

I can help you achieve commercial exchange rates up to 5% better than the banks, and you can also take advantage of my 10 years’ experience in the FX markets in help you decide when to fix a rate. 

Whatever currency you need to buy or sell, why not take advantage of a free consultation with an expert currency broker. I can discuss your requirement, the forecasts and possible direction of your exchange rate, and explain the options you can consider. In this way you can make an informed choice on when and how to fix a rate, and not simply leaving things to chance. As I have said before, hope is not a reliable economic tool. Take action now, click below to send a free no obligation enquiry and take the first step to making the most of your currency. 

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Economic Data 

Every day economic data is released across the world, and is often the most common thing that affects exchange rates. Below I list the main data releases for the coming week that I think could affect exchange rates. For a free consultation on how these released could affect your particular currency requirement, send me a free enquiry now by clicking here. 

Monday – Today we have various inflationary measures from Europe, which could dictate future interest rate movements. Staying in Europe, we have Unemployment numbers. In the UK we have Inflation data, and the new Bank of England governor Mark Carney takes over today. Over in the USA we will see Inflation and Construction data that may affect GBP/USD rates. 

Tuesday – There are only 2 UK releases today Construction data and Retail Sales data. In Europe we have further inflation numbers. Further afield we have an Interest rate decision from Australia. The only other data of note is Factory Orders from the United States. 

Wednesday – Starting in Australia today, we have Retail Sales and Trade Balance data. In the UK we have House Prices and Inflation data, along with a BoE report on Credit Conditions. Over in Europe its Retail Sales and more inflation numbers. In the USA today we have some unemployment numbers and Trade Balance figures. 

Thursday – A very important day, as we have the BoE decision on Quantitative Easing and interest rates, and it will be the first meeting with the new governor at the helm. Whether he will make changes to interest rates or QE we will have to wait and see. Shortly after, the ECB make their decision on rates. 

Friday – Sterling gets a day off today as there are no releases of note. It’s quiet in the EU also, with German Factory orders the only data of note. It’s all about the USA today – Unemployment, Non-Farm Payrolls and average earnings. Expect a volatile day for Pound/Dollar.