Pound/Euro rises to €1.39

Tuesday 22nd September 2015 
It’s been an interesting start to the week on the foreign exchange markets. Despite little economic data being released yesterday, the Sterling/Euro rate rose steadily throughout the day before settling around €1.3850. The upwards march continued this morning, with rates touching €1.39, before figures released at 09:30am this morning showed that UK government borrowing was much higher than expected. This halted the steady rise and at the time of writing, GBP/EUR sits just above €1.38: 

UK Interest Rates 

Last week the Bank of England’s chief economist indicated that an interest rate cut could be on the cards. I mentioned in my last post that I thought that unlikely, and today the chancellor George Osborne also indicated that the next move in rates is likely to be a rise. However, I still think that this is still quite a long way off. Indeed the Bank of England deputy governor has suggested that disinflationary forces from abroad meant there was no immediate need to raise interest rates, so I expect this to halt any rise in Sterling. 

European Central Bank (ECB) president Draghi to speak tomorrow 

Tomorrow at 2pm, Mario Draghi, the ECB president gives a speech. There is a good chance he will talk about how the EU economy is doing, and I think this could have an impact on Sterling/Euro rates. On the one hand, he might hint that further Quantitative Easing is needed in order to boost the economy, and there are also rumours he may float the idea of an interest rate cut. If one or both of these things happen, then I would expect the Euro to weaken, pushing GBP/EUR rates back towards the €1.40 level. If however neither of things are mentioned and he is positive about the economy, then we could see the pair drop back away. 

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Pound rises on employment data, but will it go higher?

Wednesday 16th September 2015
Today we saw the Pound/Euro rate rise on positive jobs data from the UK. Average earnings and the claimant count were both much better than expected, and you can see from the chart below that this strengthened the Pound, pushing the GBP/EUR rate from €1.36 to €1.3750 before dropping back away. We also had worse than expected inflation numbers from the EU, which helped push the rate higher as the Euro weakened and became a little cheaper to buy. 

Will the Pound continue to go up against the Euro? 

This is the question I’m asked daily by my clients looking for the best exchange rates to buy Euros. It is of course impossible to predict what will happen, but I don’t think the rate will get higher in the short to medium term. Indeed the current strength of the Pound is a problem for the Bank of England as it makes our exports more expensive, so if the rate does continue to climb, then I would expect the BoE to make noises about an interest rate being a long way off, in order to weaken the Pound to stop it hindering the economic recovery. 

Yes, the rate has fallen from the 8 year highs of €1.40+ we were enjoying last month. Those that need to buy Euros however should consider that the rate is still significantly better than when it was at €1.25 at the start of this year, so in the grand scheme of things it’s still a good time to buy Euros. 

It’s important to remember the only reason rates were so high before was 1) due to weakness in the Euro due to the Greek debt crisis that has now been resolved and 2) speculation interest rates were going to rise in the UK, which is no longer the expectation. For these 2 reasons I don’t think the rate will get back to €1.40 until into 2016, so if you need to buy Euros then consider fixing a rate sooner rather than later. (Click here to get a quote on your exchange and see how much you could save using my currency exchange services). 

All eyes on the FED 

Tomorrow’s decision by the Federal Reserve on US interest rates is the most anticipated for a very long time. The consensus is still that rates will be left on hold however there is a small chance they will increase rates. If they do, expect GBP/USD rates to drop sharply. 

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Sterling rises against Euro and US Dollar

Tuesday 8th September 2015 
Sterling has continued to gain against both the Euro and Dollar today, and as you can see from the charts below, we’ve seen rates rise steadily since the lows of last week: 

  GBP/EUR

   

    GBP/USD

Why has the Pound gained against the Euro and Dollar? 

Only a week ago, a raft of quite poor data from the UK had poured cold water on the idea that the Bank of England (BoE) would be able to raise interest rates any time soon, and due to this the Pound had weakened against other currencies. The BoE’s governor Mark Carney also said that the slowdown in the Chinese economy could affect UK inflation, further denting the Pound. 

Despite this however, this week we have seen the Pound fighting back. According to Reuters, the main reason for today’s GBP gains was an agreement from a Japanese insurance firm to buy a British insurer in a cash deal for £3.5bn. This huge demand for the Pound is what drove it up against other currencies. Even against the Euro, we saw the Pound rise by 1.5 cents, despite strong EU GDP data and Trade Balance data from Germany that would normally have caused the Euro to gain strength and cause rates to drop. 

What next for Sterling exchange rates? 

Looking forwards, in my view the next 2 days will be very important indeed for Sterling. Tomorrow we have Industrial and Manufacturing production data for the UK along with a GDP estimate. If these are better than forecast then the Pound may gain further. 

Of more importance though will be Thursday’s Bank of England announcements where the BoE's 9 member Monetary Policy Committee will meet and release minutes from the meeting. Last month just one MPC member voted in favour of an immediate rate hike, and there may well be further clues as to when the UK may begin raising rates. If 1 or more of the members vote for higher rates, then expect the Pound to make further gains. However if the minutes suggest that a rate hike is a long way off, with all 9 members voting to keep the status quo, then the Pound is likely to drop back away wiping out the gains we’ve seen this week against the Euro. 

Remember that EU data was very strong today, if it wasn’t for the huge Sterling purchase by the Japanese earlier today as I mentioned above, then Pound/Euro would actually have fallen today. 

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Why has the Pound/Euro rate fallen?

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

Why has the Pound fallen against the Euro? 

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

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

Will rates recover?

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

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€1.43 - Will Sterling go higher against Euro?

Thursday 16th July 2015 
The Euro remains incredibly weak today, with GBP/EUR rates settled around the €1.43 mark, a fresh 8 year high. In today’s post I’ll look at the developments over the last few days, what happens next with Greece, why the Euro remains weak, and what might happen to exchange rates in the coming weeks. First, let’s look at how exchange rates have moved so far this week:

ECB agree €7bn loan to Greece

Last night as expected, Greek MPs passed through the reforms that were part of the recent EU bailout deal. As a result, today the European Central Bank (ECB) agreed to provide a €7bn loan to Greece to help it until an actual bailout is approved. The ECB also said it would give more emergency funding to Greece, which could help the banks to open in the coming weeks after being closed all month so far. 

Why is the Euro still weak? 

Many thought once an agreement had been made that the Euro would strengthen and exchange rates would drop back away, however the single currency remains very weak indeed. I’ve seen €1.4350 on the markets today however at the time of writing, GBP/EUR sits around the €1.43 mark. 

The reason the Euro is still weak, is that when you pick apart the current agreement, it’s clear that it’s not actually likely to fix anything. Yes a loan has been granted, but all that means is there will now be a new round of talks on a full third bailout from the EU. Not a great deal has changed, the can has just been kicked further down the road, and what a long road it is!

What happens next with Greece? 

The EU will likely provide the lending to Greece tomorrow. Germany now needs to agree to continue negotiating on the full €86bn bailout. Later this month Greece needs to pass further reforms, and if all that happens, then talks begin again to a full bailout using the European Stability Mechanism. So actually, we are still a long way off from a proper solution to help Greece, hence GBP/EUR exchange rates the best they have been in close to a decade. 

Which way will exchange rates move now? 

It’s impossible to predict of course, but with everyone now likely to have to go back to the negotiating table, and the IMF stating much more needs to be done, all the uncertainty that has been keeping the Euro weak remains. This could keep the Euro weak, and other developments may now push GBP/EUR higher. 

Perhaps they should start printing the Euro on Greece proof paper in the meantime!

If we look at interest rates in the UK, USA and EU, then it’s clear that Britain and the United States will start to raise rates before our European partners. As I explained in a post earlier this week, the rumour of higher interest rates drives investment in a currency due to the higher return. With the EU still pursuing a Quantitative Easing programme, interest rates there are likely to remain low for a long time to come. This means investors will move funds away from the Euro into Sterling and the US Dollar, and this also means the Euro is likely to weaken, and GBP and USD will strengthen. This could mean that GBP/EUR goes higher, but we’ll have to wait and see. 

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Greek Bailout – why has Pound/Euro risen?

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

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

Greece makes deal, but Euro remains weak for now

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

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

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

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

Summary 

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

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

Getting the best exchange rates 

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Could pound/Euro rates be about to fall?

Thursday 9th July 2015

Deadline day for Greece 

By midnight tonight, Greece has to submit its plans and new proposals to its creditors to try and secure a bailout and prevent a possible exit from the Eurozone. What they submit will then be looked at by EU Finance ministers at the weekend, and a decision is likely to be taken on whether to accept them at an EU Summit on Sunday. 
 
Greece needs to make a deal. At the moment the banks there are still closed, and a €60.00 limit on ATM withdrawals. At this rate, it’s likely the banks will run out of money by Monday, so it really is crunch time for the Greeks. 

With the referendum out of the way, I think it’s quite likely that Greece will now soften its demands. They really have taken the negotiations as far as then can, and they know it’s in their interests to now make a deal to restructure its debt. EU leaders are almost out of patience, Greece knows this, and so a deal could be struck this weekend. 

What could this mean for Sterling/Euro exchange rates? 

I am still of the view that a deal will be done and Greece will remain within the Eurozone. If a deal is indeed done to restructure Greece’s debts this weekend, then it will remove much of the uncertainty that has been weakening the Euro of late, and so in this eventuality I would expect Pound/Euro rates to fall. We’ve already seen it drop down to €1.39 as investors await news of a potential bail out deal, and I would expect a further fall should the saga finally be resolved. 

The other scenario is Greece rejecting whatever solutions the EU Summit present. If this were to happen, then the negotiations could break down entirely. There isn’t actually a mechanism in place for Greece to leave the Euro, so all parties know that the only real solution is a deal. 
 
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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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Why has Pound/Euro dropped to €1.39?

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

Pound/Euro drops to €1.39 

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

What has caused Pound/Euro rates to fall? 

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

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

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

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

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Euro weakens as Greek crisis continues

Pound/Euro rates were trading as high as €1.43 this morning when European markets opened, due to the mess that is the Greek debt crisis. When markets opened the Euro gained back some of its losses, and at the time of writing GBP/EUR is around the €1.41 mark. Let’s take a look at what’s been going on.

Greece fails to agree to bailout deal 

It now looks almost certain that Greece will miss its debt repayment to the IMF tomorrow. The European Central bank have stopped its emergency lending that was keeping the Greek banks afloat, after Greece announced at the weekend that it would hold a referendum on their bailout terms, and this referendum is next Sunday. Greek banks are now closed, and they have implemented capital controls, meaning that people there are limited to taking out only €60.00 per day. 

Last week, talks between Greece and the Eurozone countries over bailout terms ended without an agreement, and Prime Minister Alexis Tsipras then called for a referendum on the issue to be held on 5 July. Until then, the Euro is in a complete mess. They may well agree to the deal, and this will simply kick the can further down the road as negotiations begin again. 

The reason the Euro hasn’t fallen further than it has is because there is still a feeling within financial markets that a deal can be done here to keep Greece very much within the European Union. It’s in everyone’s interest to make a deal, especially Greece. However until the referendum is held, there will be huge uncertainty that is likely to reflected in very volatile trading in the Euro. 

Are you worried about how the Greek crisis may affect exchange rates? 

If you need to buy or sell Euros, then the coming week will be an incredibly volatile one for exchange rates. If you need to buy Euros, or perhaps convert Euros back to Sterling, then the current market volatility and lack of liquidity could make huge differences to the exchange rate. 

If you have a currency transaction to perform, then feel free to get in touch with me to discuss how the exchange rate could be affected and the options you can consider to protect yourself against a very choppy currency market. I can also provide a quote on your exchange to compare with your bank or existing broker. 

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Pound/Euro hits €1.41 on Greek uncertainty

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

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

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

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

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

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Pound/Euro rates near €1.40 again

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

 Pound/Euro over last week:

 

Pound/Dollar over last week:

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

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

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

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

Why has the Pound fallen against the Euro? 

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

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

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

Which way will exchange rates move this week? 

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

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

This week’s economic data releases 

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

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

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

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

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

Getting the best exchange rates 

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

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Will the GBP/EUR rate rise or fall in the coming weeks?

Monday 20th April 2015 
Good morning. Before we look at what has been happening with exchange rates this week, I would like to take a moment to thank both regular and new visitors to my site for their support. Today my blog logged its 1 millionth unique visitor! Readers that chose to send an enquiry to find out more about the services I offer have now converted over £35m, at rates up to 3% better than banks can offer meaning I have saved my clients over £1 million pounds to date, which is something I am very proud of. If you would like to see how I can help with your exchange, you can send me a free enquiry by clicking here. 

What has been happening with the Pound/Euro rate? 

After quite a bit of volatility this year that have seen GBP/EUR rates between a range of €1.25 and €1.42, the last week has been relatively stable. The exchange rate has remained within a 1 cent range between €1.3850 and €1.3950: 

Will Pound/Euro rates drop as the election approaches? 

Well that’s what many analysts have been saying for several weeks, and I agreed that it was likely the rate would drop. This was based on what happened as the Scottish referendum last year created similar uncertainty. However I’m starting to think it’s not a given the same thing will happen. The Scottish vote seemed to catch the markets by surprise, but this time most investors have put plans in place well in advance of the election, which means we may not see the Sterling sell off that would cause the Pound to fall. That would explain why rates have remained supported around the 1.39 mark despite a hung parliament looking very likely.

Indeed with the UK economic recovery being praised by the IMF chief we could well see the Pound hang on to it’s relative strength. Also, the Euro remains very week indeed especially with the ECB President Mario Draghi making clear last week that quantitative easing would last until September 2016, then there is every chance we may actually see rates remain around these levels and possibly even rise higher. 

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

Of course there is no way to predict which way the rate will go, so what you should do is contact me to discuss the various options you could consider. For example if you need to buy Euros, then you can place a ‘Stop Loss’ order to fix a rate should it drop below a pre-agreed level, for example €1.35. In this way you’re not exposed to a huge fall in the rate should the election cause Sterling to plummet, but you're still able to take advantage of higher rates if we see things get back to the €1.40 level. 

This is just one example of the type of thing I can offer, but of course every particular currency requirement is different. You may need to convert Euros to Sterling following a property sale for example. 

Whatever currency you need to buy or sell, why not get in touch to discuss the options available to you, and get a quote to compare with your bank or existing broker. You can do this for free without any obligation by sending me an enquiry here. 

I look forward to assisting anyone that needs to convert £5k+ on a bank to bank transfer basis. I’m afraid I can’t help with cash or holiday money. 

Alastair Archbold

Pound/Euro starts to plummets as election uncertainty takes hold

Thursday 2nd April 2015
Since my post a few days ago, we have seen the general downward trend in Sterling/Euro rates resume, falling from €1.38+ to €1.36 in the last couple of days. As the chart below shows, in the last 3 weeks alone the Pound has lost nearly 5% against the Euro: 

Economic data from the UK has actually been quite good! Growth has been revised up, manufacturing has picked up, and the UK is now the fastest growing major western economy. Despite this, it looks like the Pound is going to drop further against the Euro. 

The main reason as I’ve touched on a few times in the last few weeks is the general election. The latest polls suggest a hung parliament and it was this that was the catalyst for the drop earlier in the week. If we cast our minds back to last year’s Scottish referendum, the uncertainty that created pulled Sterling significantly lower against other currencies. The election is likely to have the same effect, and it could potentially be a much greater one. Tonight will also be interesting with the televised debate for 7 leaders, and could also cause the pound to come under pressure. 

Nearly every forecast I’m reading suggests a drop. As an overall majority is highly unlikely, this uncertainty is likely to continue for at least several weeks after the election, which means a very volatile couple of months for the Pound. 

When is the best time to buy Euros? 

If you have Euros to buy in the next 6 months, then you’re still doing very well. Yes the rate has dropped from the recent 8 year high, but the rate is still very good indeed and around 10 cents higher than the start of the year. 

If you need to buy Euros then you can lock in the current rate for up to 2 years by lodging 10% of the Sterling you want to convert. You are then protected against further declines in the rate and know exactly where you are. 

To discuss this or any other Euro purchase we can help you with, click here to make an enquiry. 

When should you sell Euros back to Pounds? 

If you need to convert funds back to Pounds, perhaps from a property sale overseas, then there is every chance the rate could get better for you as the Pound gets weaker. You should just hope this is the case though. 

You can utilise what’s called a Stop Loss order, which means if the market moves against you your rate is fixed at a pre-agreed level, while still allowing you to take advantage of any gains in the market.  

To discuss this or get a quote for your exchange, click here. 

Getting the best Exchange rates 

I work for one of the UK’s leading Foreign Exchange Brokerages; one of the few to be granted an e-money licence from the FCA, which gives you significantly more protection than a firm that is simply authorised by them. Clients that have contacted me directly from this blog over the last 6 years have now converted over £350m Sterling, and saved around 2 to 3% compared to their bank/existing broker. 

I can trade over 35 currency pairs on a bank to bank basis for both private and business clients. We also have segregated client accounts, so you can trade with us safe in the knowledge your funds are very safe and secure. 

If you need the best rates, are converting over £5k and needs funds wired to a bank account, then it is certainly worth getting in touch to see what rate I can offer you. It costs nothing to get in touch for a quote and you will likely be pleasantly surprised how much I can save you by getting you a better rate. I can also talk over various options and strategies you can consider so you can take control over your requirement. Don’t simply sit back and hope an exchange rate will get to a particular level; hope is not a reliable economic tool. Take advantage of my 15 years of experience in Financial Services today. 

Click here to send me a free no obligation enquiry. 

We will be closed over the Bank Holiday weekend, and will be back in action on Tuesday. Enjoy the break!