Pound soars back to nearly €1.40 after Conservative Majority

As I said in my last post just over a week ago, the blog was going to be quiet while I took a short holiday. Much has happened since I’ve been away! As most readers will already know, the Pound has surged higher against the Euro as Sterling posted its largest gains against the Euro in years. As exit polls showed that the Conservatives would take an overall majority, GBP/EUR rose 4 cents, and touched the €1.40 level several times as the chart below shows: 

Why did the Pound gain so much on a conservative win? 

The Pound had fallen sharply before the election, due to political uncertainty for investors who had expected a hung parliament. Most polls had again and again shown the two main parties neck and neck, with neither expected to secure a parliamentary majority. The overall majority for the conservatives while not popular with everyone, is certainly very good news for the UK economy. As such, investors rallied to buy the Pound, helping to push it up against other currencies. 

Will the Pound/Euro rate get back to €1.40? 

I personally don’t think so. You can see the resistance GBP/EUR has at €1.40 in the above chart, and the currency pair seems unable to break through this. Indeed this week we’ve seen the rate drop back to the €1.38 level. I think the Pound/Euro rate could now fall again, and I’ll explain the reasons why… 

• The Conservatives now have a majority, they can implement much tighter monetary policy than they have done under the Con/Lib Dem coalition. This means that the Bank of England may now keep monetary policy easy and keep interest rates low, which would weaken the Pound, which could take some of the wind out of sterling's sails. 
• Cameron has pledged to hold a referendum on membership of the European Union within two years, and the uncertainty this will generate will also keep investors wary and limit any further gains.
• The Spotlight is now back on the EU and Greece, and actually recent figures suggest the European Central Banks stimulus program is having the desired effect, and the economy in Europe seems to be recovering. 
• Greece (which incidentally is where I have just been on holiday!) seems to be playing ball and, for the moment, is meeting its debt repayments. The Euro is weak at the moment due to Greece, and if this gets resolved, it could regain strength and become more expensive to buy. 

What should you do if you need to buy Euros this year?

I can’t predict what the rate will do, nobody can. What you can do however is speak to an expert currency broker like me to ensure you have an understanding of the options available. For example if you are worried about the rate falling, you can lock in the rate now for up to 2 years with a Forward contract. If you want to gamble on rates going higher, then you can use a ‘Stop Loss’ order to fix a rate should we see it plummet below a particular level, so you’re not exposed. Or, you could hedge your bets and fix a rate on half your requirement now, and see what happens later in the year with the remaining funds you need. 

Do you need to achieve the best possible exchange rates? 

The above is just an example of how I can help you if you’re looking to buy or sell currency. I can source you rates of exchange that are very close to the mid-market level you see published online and if you are converting a large sum, the savings could be thousands of Pounds. If you would like a quote on the exchange rate I can provide, or would like to discuss your options in more detail regarding when to fix a rate, then click below to send me a free no obligation enquiry today. 

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GBP/EUR drops to €1.3850 as Euro gains strength. GBP/USD rises.

Wednesday 29th April 2014 
In my last post a week ago, I talked about the Sterling/Euro rate breaking through the €1.40 level. As I predicted, this spike to a near 8 year high was short lived, and today the rate has fallen from 1.40 down to €1.3850 as you can see from the chart below: 

Why has the Pound/Euro rate fallen? 

Simply put, the Eurozone economy is starting to perform well. Euro and German bond yields rose to their highest level in several weeks today, after data showed bank lending has stopped falling, and consumer inflation expectations have risen. As the European economist at RBC Capital Market has said, "Happier days are on the cards”. He added that "The continued improvement in credit supply conditions bodes well for the sustainability of the euro area recovery overall." 

So it seems that the latest figures show that the European Central Bank's (ECB) Quantitative Easing programme is starting to have a good effect, much as stimulus programmes in the UK and USA have done. Also, there has been positive news on Greece. They are expected to present legislation to lenders to show it is serious in making efforts to repay it’s debts, and as a result the Euro has gained strength and become more expensive to buy. 

If you need to buy or sell Euros, would like a quote or to discuss whether the Pound/Euro rate is likely to go up or down in the coming weeks or months, send me a free enquiry today by clicking here. 

Pound/Dollar rates rise to nearly $1.55 

In contrast to the GBP/EUR rate dropping, GBP/USD has risen nicely in the last few weeks, rising from $1.46 to $1.55: 

This is because today figures showed that the US Economy is growing much slower than expected. In turn this means that interest rates aren’t likely to rise as quickly as previously thought, and as a result the US Dollar has lost value and become more expensive to buy. 

Which way will Pound/Euro and Pound/Dollar exchange rates move next? 

While it’s impossible to predict, I think that now the EU economy is looking more robust, focus will turn to the UK election, so we could well see Pound /Euro rates continue to fall. That assumes of course that Greece makes its upcoming €1bn debt repayments. If they don’t, a rise back to €1.40 could be on the cards. 

Pound/Dollar rates on the other hand are likely to keep dropping. I think this spike above $1.50 will be short lived and expect the rate to be back down in the €1.40’s before long. 

Getting the best exchange rates 

If you need to convert £5k+ from one currency to another, then it would be prudent to get in touch with me for a quotation. I can source exceptional rates of exchange for any major currency conversion on a bank to bank basis. If you would like a quote or to find out more about the service I offer, click below to send me a free no obligation enquiry. I regret I cannot help with cash or holiday funds, and can only assist those looking to have currency wired to a bank account. 

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Sterling/Euro exchange rate forecast

Tuesday 17th February 2015 
In today’s report I’ll take a look at the Sterling/Euro exchange rate forecast, and also what data releases the rest of the week has in store and how they could affect exchange rates. Today the Pound has fallen against other currencies due to the lowest inflation figures on record.

Sterling/Euro 

The Pound/Euro rate has been repeating its recent trend of rising above the €1.35 mark, only to drop back away within days. This has happened again this morning, with the rate falling from €1.3550 to €1.3450 over the course of this morning. What’s been going on? 

Continued uncertainty over what is happening in Greece has continued to weaken the Euro, and that’s what keeps pushing the rate higher However with very low UK inflation numbers this morning, the Pound has fallen back away which is why GBP/EUR exchange rates have dropped. To be honest I think sooner or later, the Greeks will reach an agreement with the EU regarding its debts, and when this uncertainty is removed, the Euro could gain back some of its losses and bring GBP/EUR even lower. I personally don’t expect rates to stay at the €1.35 level for long. 

Supporting that view was this morning’s UK inflation figures. The rate of UK Consumer Prices Index inflation fell to 0.3% in January, its lowest level since records began in 1989. 

On the one hand, this does provide a respite for consumers in the UK and increase spending power so it’s good news. On the other hand however, it means interest rates in the UK aren’t going anywhere, and so the Pound has weakened off. 

(Low interest rates usually weaken a currency and it’s this fact that’s keeping the Pound in check.)

If you need the best GBP/EUR rates, or indeed need to convert any international currency, click here to make a free enquiry on the commercial exchange rates I can offer you.

 

What else could move exchange rates this week? 

Tuesday 17th February 2015  

This morning we had the latest inflation figures, and they were slightly worse than expected. This means it’s getting less and less likely that interest rates will be going up any time soon in the UK, and the Pound has fallen today by over a cent against the Euro. 

Wednesday 18th February 2015 

Today is an important one for Sterling, as at 09:30am we will see the latest unemployment figures, and the Bank of minutes. I expect the unemployment number to remain at 2.6%, but if it’s higher than this expect the Pound to fall and vice versa. The BoE minutes will be important as it will show if any of the Banks Monetary Policy committee voted to hike interest rates at their last meeting. I would expect this to show all members voting to keep rates on hold in light of the recent inflation numbers. 

Thursday 19th February 2015 

Nothing of note from the UK today, however the Eurozone has a monetary policy meeting and a consumer confidence release, that could affect GBP/EUR rates. The USA also has some important jobs and manufacturing numbers today, so we could also see changes in the Pound/Dollar rate. 

Friday 20th February 2015 

Today is another important one for Sterling as we have the latest UK Retail Sales numbers. I expect these to be around the 5.9% mark, and any deviation from this figure could cause the Pound to move against other currencies. Retail Sales figures are important as they are a good overall barometer of economic activity. 

To discuss your currency requirement and obtain a quote to compare with your bank or existing broker, click here.

Sterling/Euro exchange rate forecast Feb 2015

Monday 2nd February 2015
Good morning and welcome to a new trading week. After a very volatile couple of weeks that has seen GBP/EUR hit 7 year highs of €1.35, things have stabilised somewhat, and this morning the rate has dropped back into the €1.32’s. With no significant data of note today, the only thing I can attribute the drop to, is a rumour that the Swiss National Bank will be unofficially targeting a EUR/CHF rate of 1.05. 

Why has the Pound/Euro rate fallen? 

This is significant as they recently ended their policy of keeping the rate at 1.20. They did this by selling CHF and buying Euros to keep the desired rate. These rumours mean the SNB could be buying huge volumes of Euros to keep the rate where they want it, and this demand for Euros has strengthened the single currency and made it more expensive, hence why this could be the reason GBP/EUR rates have fallen a cent this morning. 

Will the Pound/Euro rate go higher or lower in February? 

All in all, with rates to buy Euro still above 1.30 which is close to a 7 year peak, it’s a good time to take stock of any Euro requirements you may have in the coming months. With all the bad news from Europe now priced into the rate, I think we’ll struggle to see it get much higher. Furthermore if the QE measures recently announced by the ECB have the desired effect, we could see the Euro gain further strength and pull GBP/EUR rates lower. 

It’s also worth mentioning Greece – it looks like they won’t default on their debts, and for the time being will be firmly remaining in the Euro, so the initial uncertainty after their election has now subsided, and that’s also why GBP/EUR has stopped climbing. 

Do you want the best possible exchange rates? 

Get in touch with me today to discuss the rates I can offer and the contract types you have at your disposal to ensure you don’t lose out. The consultancy service I provide is free, and involves a chat over the phone regarding your requirements. I can then explain the various options and choices you have to ensure you make an informed decision when to fix a rate. When you decide to fix a rate I can provide you a quotation; the rates I provide are often up to 5% better than banks and other brokers can offer so the savings can be huge. 

Click here to make a free enquiry with me today. 

What could affect exchange rates this week? 

Below I have outlined what I think will move exchange rates this week. To discuss how this could affect your currency requirement in more detail, click here to send me a free enquiry. 

Tuesday 3rd February 2015 – The only UK data of note is PMI construction, which looks at the construction sector. It’s a relatively minor release but could affect Sterling. GBP/AUD could face a volatile day however with an Australian Interest Rate decision and following statement. GBP/EUR has recently seen very good gains with trading levels above $1.90. Staying with the antipodean currencies, the NZD could also be affected by Unemployment figures and a central bank speech today. 

Wednesday 4th February 2015 – Again only 1 release from the UK today; services PMI. As an indicator of the economic situation in the UK it can often affect Sterling. Sterling/Euro could also be affect today however by EU Retail Sales, and a policy meeting from the European Central Bank. Across the Pond we have a host of data from the States, including Employment, Manufacturing and Services figures. 

Thursday 5th February 2015 – today we have the Bank of England interest rate decision. I think this will be a non-event; rates won’t change from 0.5% in my view for another year. Elsewhere today we have an economic bulletin from the ECB, Retail Sales from Australia and Jobless claims along with Trade Balance figures from the USA. 

Friday 6th February 2015 – Today the UK releases its Trade Balance figures, which show the difference between imports and exports, and this release often creates some volatility for the Pound. There aren’t any releases from Europe today, but in the afternoon we have Jobs data from the USA. The Non-Farm payrolls in particular can really move the GBP/USD rate. The forecast is for 235,000 new US jobs to have been created, but the actual figure is often very different which could move the Pound/Dollar rate around 1.30pm. 

To discuss how the above could affect your currency requirement in more detail, or to obtain a quotation on the rates I can offer, click here to send me a free enquiry.

GBP/EUR and GBP/USD forecast outlook

Tuesday 30th September 2014 
Good afternoon. It’s been a busy day in the currency markets, with Pound/Euro rising to €1.2850 but Pound/Dollar dropping to $1.62. in today’s post I will take a detailed look at both these currency pairs, what is causing the rate to move, and where I think rates could head in the coming months. 

Pound/Euro 

As you can see from the chart below, we have seen this exchange rate rise by a point in the last 24 hours. On the one hand the upwardly revised UK growth forecast has given Sterling a slight boost, but it was mostly to do with a weakening Euro. 

Eurozone inflation slipped again in September, with prices rising at their slowest rate in nearly five years. It is the lowest level for eurozone inflation since October 2009, adding to fears of a deflationary spiral. Earlier this month, the European Central Bank cut its benchmark interest rate to 0.05%, and introduced new stimulus measures in an attempt to kick-start the eurozone economy. 

Due to this poor Eurozone data the Euro has weakened and become cheaper to purchase. 

Which way could GBP/EUR head now? 

In light of the latest economic data from Europe, I think it’s quite likely they will have to now pursue a Quantitative Easing programme to stimulate the EU economy. If this happens then the Euro will weaken further. Also, as we get closer to UK interest rates going up, this could strengthen the Pound. So looking at these 2 events on their own would suggest Pound/Euro rates will go higher, although I think this will be into 2015. 

If you need to buy Euros, you could either fix the rate now while it’s close to a 6 year high. Alternatively if you wanted to gamble on rates going higher due to the reasons above, then you should place a ‘Stop Loss’ order to protect you in case the rates drops back away. This has happened several times this year, and with UK political uncertainty likely to affect the Pound next year, could this limit any gains for the Pound? 

Click here to discuss your Pound/Euro or Euro/Pound requirement and get a free quote 

Pound/Dollar 

This currency pair has fallen by a point today to $1.62. Part of this is due to the weak Euro, and investors dumping the single currency to buy the Dollar, strengthening the greenback. Rates have now dropped from $1.72 to $1.62 in the last few months. 

Which was could GBP/USD head now? 

The US economy is now performing very well, as is the UK economy. As the US winds up its stimulus programme, the greenback will likely gain further strength, so I wouldn’t be surprised to see it drop below $1.60 in the coming months. 

Summary 

It’s impossible to know which way rates will go, and I think interest rates and when they will go up in the UK will determine whether exchange rates rise or fall in the next few months. Regardless of which currency you need to buy or sell, having a good currency broker that can guide you through the process and secure you very good exchange rates can save you thousands of Pounds. 

Click here to send me a free enquiry today. I can provide you a quote, explain the options you have depending on your particular requirement and timeframe, and explain what is moving the currency markets. In this way you can make an informed decision on when to fix your rate, and get a quote to compare with your bank or existing currency broker. 

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

Pound/Euro & Pound/Dollar May 2014 forecast

Monday 1st May 2014
It’s been a little quiet on the markets today, with an EU bank holiday meaning trade is thin, and economic statistics are also thin. 

We have seen Sterling rise a little this morning however after UK Consumer credit and net lending figures were quite a bit higher than expected. This means if people are borrowing more money, there is in turn more confidence in the economy, hence the spike for Sterling. This has pushed GBP/EUR close to €1.22 and GBP/USD to $1.69. 

Today we will have a look at what might happen to exchange rates in the coming weeks. Remember also that if you need to convert currency, perhaps to buy or sell property abroad, then get in touch with me for a free quote and a chat about which way the rate could move. I can source excellent rates of exchange that could save you a considerable sum.

What next for Pound/Euro rates? 

Sterling/Euro is trading around the best it’s been since January 2013. It’s being kept strong by robust UK data, and the threat of monetary easing in the Eurozone. 

Next Thursday, we have the latest decision by the European Central Bank. While I don’t think that they will announce any change to interest rates, in the press conference afterwards they may well hint at some sort of monetary stimulus such as Quantitative Easing or a negative deposit interest rate. If they do, then this could well weaken the Euro a bit and push the rate higher. 

For those buying Euros, I think that’s your best hope of an increase, and I can’t see it going too much higher, as the Bank of England have also warned that if the GBP/EUR rate goes too high, it will hurt the UK recovery and so they may in turn take action to weaken the Pound. 

Contact me to discuss GBP/EUR or EUR/GBP.

What next for Pound/Dollar rates? 

It’s been a little quiet on the markets today, with an EU bank holiday meaning trade is thin, and economic statistics are also thin.

Sterling/Dollar rates are trading at their highest level in 5 years! Again, much of this is to do with the strength in the Pound, and weakness in the US Dollar. This week US growth figures came in at 0.1% - it was forecast to be 1.2% so it’s much worse than thought. This has caused the Dollar to weaken, become cheaper to buy, and push rates above $1.69 today briefly. 

If you need USD, it would be wise to consider fixing the rate while it’s so good. Their economy will recover at some point, and when it does expect them to taper their stimulus measures which could give the Dollar back to strength and bring rates back down. How long this will take to happen though is impossible to know. 

Contact me to discuss GBP/USD or USD/GBP

Getting the best exchange rates 

The chances are that if you are reading this blog, you are keen to know what is moving the exchange rate, which way it may go in the future, and also that you want to get the best possible rate. 

I update this blog to keep people up to date with exchange rates in simple terms. In this way I hope I can help people decide when to fix their rate. I work for one of the UK’s leading foreign exchange brokerages and have over 8 years’ experience as a currency broker. 

So if you need the best rates, click below to get in touch with me for a quote to see how much I can save you on your exchange. 

Send me a free no obligation enquiry by clicking here.

Alastair Archbold

This week's data that could affect exchange rates

Monday 28th April 2014
Good morning. Today I will give a brief outline of how Sterling exchange rates start the week, and then I’ll list all the economic data releases that I think will affect currency prices this week. 

Let’s start with how the Pound is performing this Monday morning. Sterling has risen against the US Dollar this morning, hitting $1.6850. This was due to a strengthening of the Pound after U.S. drug maker Pfizer confirmed it had made a bid approach to Britain's second-biggest drugs group, AstraZeneca.  

There weren’t any gains for Pound/Euro however, as the Euro is being kept strong by expectations that EU inflation will rise when figures are released later this week. 

Below I will list the main data releases I think will affect exchange rates. If you have a currency transaction to perform, and would like to get a quote or discuss how I can assist you, click here to send me a free no obligation enquiry. 

This week’s economic data releases. 

Monday 28th April 2014 

It’s been a quiet start to the week, with the merger and acquisition news about Astra Zeneca giving the Pound a lift. The rest of today is also quiet, with some US Home Sales data due at 3pm. Later this evening we will see New Zealand’s latest trade balance data that could affect GBP/NZD rates. 

Tuesday 29th April 2014 

Today is the main day this week that might affect Pound/Euro rates. At 09:30am we will see the latest UK Gross Domestic Product figures. They’re expected to come in at 0.9% (quarterly) and 3.2% (annually), so any deviation from these numbers could see the Pound rise or fall accordingly. 

This is followed at 10am by EU Investor and Consumer confidence, so the Euro’s value could also be affected today. There are also German inflationary releases due at 1pm. 

Wednesday 30th April 2014 

Late on Tuesday evening UK Consumer confidence figures were due to be released, so when the markets open at 8am we could see some reaction. Also today we have Germany Retail Sales and Unemployment, and EU inflation numbers, so GBP/EUR could be affected. 

It’s a busy day stateside today, with GDP figures, a FED interest rate decision, and FED policy statement all expected to affect Sterling/Dollar rates. 

Thursday 1st May 2014 

Some minor Credit and Mortgage data is released from the UK this morning but I don’t expect it to affect rates. The rest of today’s ecostats are from the USA: Jobless Claims, a speech by Janet Yellen the FED chair, Manufacturing and Construction. GBP/USD will therefore be the currency pair most at risk today. 

Friday 2nd May 2014 

UK Construction data, along with EU Unemployment and growth forecasts will drive the Sterling/Euro pair today. This afternoon we have the US Non-Farm Payrolls – these are usually very different from forecast so often causes GBP/USD to move - the numbers are released at 1.30pm so expect a choppy day’s trade for cable. 

Find out more about the rates and service I offer 

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Pound/Euro up after Unemployment data. What next for Sterling?

Wednesday 16th April 2014 
The Pound has surged higher today, after the latest UK unemployment figures were released. These showed that the jobless rate has dipped below 7%, the first time we’ve seen that for 5 years. As a result, Sterling has surged higher, finally breaking above the €1.21 mark as you can see from today’s chart below: 

UK Unemployment causes Pound to rise 

As the chart clearly shows, as soon as the numbers were released, Sterling/Euro rates rose to €1.2150 before settling off. Sterling/Dollar also rose, hitting resistance at $1.68 to the Pound. You can read a full report on the Unemployment figures here on the BBC website  , and the ONS result can be found here.

So why has this caused the Pound to gain? 

It’s to do with interest rates again. The Bank said last August that it would not begin to think about raising rates until unemployment fell below 7pc. At the time, it believed this would not occur until 2016. Higher interest rates, or the possibility of higher rates in the future, generally strengthens a currency due to the increased return potential, and that’s what we’ve seen happen today. 

As the level started to drop below this, they revised their guidance saying that when the rate falls below this, it won’t trigger a rate hike, but it does mean the Bank of England will move away from its focus on a single threshold to decide when to raise interest rates. It will now look at a broad range of "key judgements" including business investment, exports and productivity, which it outlined in February. 

Will the Pound go higher or drop back away? 

That’s the question everybody wants the answer to, but is impossible to predict. I think that much will now depend what the Bank of England say. They could as I’ve stated above, introduce new judgements before raising rates. This will probably be inflation falling to the 2% target – until we hear the reaction from the BoE the market probably won’t go much higher. 

Those that need to buy Euros should be aware rates were actually even higher than this earlier in the year, but then fell back away. For the last few months the GBP/EUR rate has hovered between €1.19 and €1.21. Today’s events have broken above that barrier. If I needed Euros, then I would consider the risk of the Bank of England moving to weaken the Pound off, which they have already said they would look to do if the exchange rate rose too much. That’s now happened, so we could see it drop back towards €1.20 again in the coming weeks. Don’t take the risk – place a Stop Loss order to protect against the market moving against you. 

Those selling Euros will not be pleased with today’s news. I don’t think that the rate will drop below €1.20 any time soon, and is likely to remain roughly where it is until we hear what the BoE have to say about today’s news. 

Take control of your currency requirement 

Don’t just sit back and hope the rate will move your way; hope is not a reliable economic tool. 

I can provide various tools however to protect against the market going the wrong way, ways to fix your rate well in advance of when you need to convert your currency, and explain the different scenarios that could happen in the coming weeks and months. 

In this way you can take control of your currency requirement and make an informed decision on what to do and when to do it. 

Click here to get in touch

I look forward to hearing from you. 

Alastair Archbold

Sterling/Euro €1.21 & Sterling/Dollar $1.6740

Tuesday 15th April 2014
Sterling is holding firm above €1.21 against the Euro, and has risen to $1.6740 vs the US Dollar. The Pound has however remainder relatively range-bound this week without pushing much higher than that. Its 2 things keeping the rate supported: firstly we had the ECB president over the weekend say that if the Euro strengthens, they will look at stimulus. Today, UK inflation numbers were as expected, increasing the chance of an interest rate hike in the UK next year. 

In today’s post I’ll take a look at these 2 things that are keeping rates supported, and explain how you can take advantage of the current rates which are around a 16 month high. 

ECB warns of stimulus if Euro strengthens further 

ECB President Mario Draghi said in Washington on Saturday that "further strengthening of the exchange rate would require further stimulus." 

So what does this actually mean? 

If the Euro were to strengthen, it would become more expensive to buy and Sterling/Euro rates would fall. His comments effectively say that if the Euro were indeed to strengthen, they may pursue a Quantitative Easing programme to stop it doing so. This has kept GBP/EUR rates at the €1.21 level. 

So if this is the case, could rates go higher? I don’t think so, unless they actually decide to go ahead and pursue a QE programme. At the moment it’s just rhetoric, so while it’s keeping rates from falling, it’s unlikely they will rise in the short term. 

For those of you that need to sell Euros, this means rates are likely to remain range-bound so you may wish to consider fixing a rate sooner rather than later. It’s the same story for Euro buyers, as rates have failed to go higher than these levels recently. 

UK Inflation numbers also keep the Pound supported 

Inflation numbers came in as expected at 1.6% this morning. Some in the market thought the number would be a little lower, which would have meant less chance of an interest rate hike in the UK in 2015. 

Higher interest rates mean a higher return for investors, so speculation it will happen sooner rather than later is good for the Pound. As the number was as expected, it remains the case we think rates will rise in 2015, so this gave Sterling a little boost this morning. 

Are you looking for the best exchange rates? 

Whether you need to convert Sterling to Euros, move Euros back to Pounds, or convert any other major currency – I can help you source excellent rates of exchange that are up to 5% better than banks can offer. When converting large volumes, the savings can be very considerable indeed. 

Why not get in touch for a free chat about the service I can offer? I can offer you a consultation to discuss the options available to you, provide you with a rate to compare with your bank or existing broker, and discuss with you what’s happening in the currency markets to help you decide when to fix a rate. 

Click here to send a free enquiry 
Call me directly: +44 (0) 1442 892 066 

Ask for Alastair Archbold, and quote ref ‘FERF’

Will Pound go up or down against Euro this week?

Tuesday 18th  March 2014
The Pound has fallen again today, dropping as low as €1.19 before settling at that level. There hasn't been any data of note from the UK today, so this is simply the market positioning itself ahead of tomorrows key day for the currency markets. 

What will affect exchange rates in the next few days?

The next 24 hours will be key for exchange rates, so the following information is important if you need to buy or sell currency at the best exchange rates. Firstly I will look at the key events, and what effect they may have on the market. I will then give my view on what effect this could have on rates, specifically the Sterling/Euro exchange rate. 

Later this afternoon at 17:45pm we have a speech by Bank of England governor Mark Carney. This could affect exchange rates depending on his comments. If he were to be very upbeat about the UK economy including growth forecasts, then we could see Sterling bounce back. What we're looking for is any hints that interest rates may have to rise, as this would strengthen the Pound. If however he does the opposite and indicates that a rate hike is some way off, then Sterling could fall.

Tomorrow morning at 09:30am we have 2 key releases. Firstly the Unemployment figures are released. If the number is 7.2% or higher, then expect the Pound to fall. If it's lower than this, then the Pound will likely rise in value. 

At the same time, the BoE releases it's minutes which show how they voted, and what was discussed, in their recent meeting to hold interest rates. Much like Carney's speech, we're looking for hints as to their policy on interest rates and growth. Positive comments will cause Sterling to rise.  We then have the Budget at 12.30pm. While this will generate the most headlines in the news, I think it will have little impact on exchange rates as I don't expect any surprises in terms of the UK economy.

So does this mean the Pound/Euro rate will go higher or lower?

Unfortunately it's impossible to predict which way the market will go. What I can do however is give my views on what's happening to help you make an informed decision on when to fix a rate. 

My personal view is that we will see the rate recover tomorrow. It's dipped for several days in a row now, falling from recent highs of €1.22 down to €1.19. The UK economy is still fundamentally strong, so I think the figures tomorrow will support this view, and I expect rates to be sat back at €1.20 by the end of this week. We'll have to wait and see whether I'm right or not! I don't expect it to break through €1.20 for some time though, as it's a key resistance level.

Having a good knowledge of the market can save you thousands it you need to buy or sell currency at the best rate. If I had to convert Euros to Pounds I would want to move quickly to take advantage of the current rate - it's the best it's been all year. 

If I was buying Euros, I would probably hold off to see what effect tomorrows data will have. I wouldn't want to risk losing out though, so I would do one of two things. I would either hedge my bets and secure half of my currency now, allowing me to take a risk on the other half. This reduces exposure to the market by 50%, but still allows you to take advantage of any rise. 

Alternatively, I would place a Stop Loss order, which lets you place a limit below which your exchange rate is fixed - €1.18 for example. In this way you can still take advantage of any gains in the rate, but have a safety net should the market keep dropping.

Find out more about the rates and service I offer 

I can help with market knowledge, various contract types, and can source exchange rates that are significantly better than the banks usually offer, sometimes by as much as 4% or 5%. If you need to convert currency, then it will do you no harm to contact me for a quote to compare.  

If you have a currency transaction to perform and would like to find out how I can help you, get in touch in the following ways: 

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Ask for Alastair Archbold, and quote ref ‘FERF’

Pound/Euro & Pound/Dollar exchange rate forecast

Wednesday 27th November 2013
There has been some volatility on the currency markets this week, with the Pound initially losing value causing exchange rates to drop. This trend however was reversed today after some strong UK data has given strength back to Sterling, pushing exchange rates up against other currencies. In today’s report, I’ll take a look at what’s been happening and the forecast for Pound/Euro and Pound/Dollar...

• Bank of England takes dovish tone on UK economy 
• UK GDP growth confirmed at 0.8% 
• Pound/Euro forecast 
• Pound/Dollar forecast
• Best Exchange Rates

Bank of England takes dovish tone on UK economy  

On Tuesday the Bank of England Governor Mark Carney delivered his latest Inflation report. It’s important because the BoE control interest rates, which have a big effect on the value of Sterling, and therefore exchange rates. 

The Bank has said it will not consider an interest rate rise until UK unemployment falls below 7%, a rate that many economists now believe could happen sooner rather than later. However Mr Carney poured a little cold water on this yesterday, when he said that the 7% is a "threshold, not a trigger". 

He said: "The exact timing of when that 7% threshold will be achieved is subject to uncertainty. We do our best to give our estimates of that uncertainty... One month's unemployment figures does not have a material change on those likelihoods." 

So while overall he was quite positive about the economy, these comments caused the Pound to fall to €1.19 vs. the Euro and $1.61 against the Dollar. We’ll look at each currency pair in more detail in a moment. 

UK GDP growth confirmed at 0.8% 

Before we look at the rate forecast, let’s review today’s data. This morning figures confirmed that UK growth is at 0.8%, according to figures released by the Office for National Statistics. The figure of 0.8% confirms the economy is growing at the fastest pace for three years. Read more about this on the BBC website here.

As the figure was as forecast, the immediate reaction was that the Pound fell. This was only momentary however, as clearly analysts quickly realised that while the number was as expected, it’s actually a very good number indeed! The UK is the fastest growing western economy at the moment, and so investors started to buy the Pound. 

This caused the Pound to rise, and recover its losses from earlier in the week. As I write this post, Pound/Euro is back at €1.20 and Pound/Dollar is at $1.63. So let’s take a detailed look at each currency pair. 

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Pound/Euro forecast

As you can see from the chart showing this year’s movements, the rate is looking good. 

 

It’s the best it’s been since January, and settled at around the €1.20 level. Over the last few weeks we’ve seen rates reach this level only to drop back away, for reasons I explained in a recent post. 

I expect this trend to continue for the rest of the year, and while it’s impossible to forecast, I don’t expect rates to breach this level this year. They will eventually, when the UK ecostats convince investors and the BoE that interest rates may have to rise. So if you need to buy Euros, consider taking advantage of the current level. Euro sellers may wish to consider a Stop Loss Order and hope the market retracts down. 

Want the best rates to buy or sell Euros? Click here. 

Pound/Dollar forecast

Again the chart clearly illustrates how good the Pound/Dollar rate is at the moment.

 

This is a 1 year chart, but rates haven’t been significantly above this for nearly 3 years! 

So again worth considering taking advantage of the current rates while they’re above $1.60. For Dollar sellers the direction is less clear, as we don’t know if or when the FED will start tapering their QE programme. 

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Best exchange rates

If you are looking for the best rates for Euros, Dollars, or indeed any major world currency, then send me a free enquiry today.

I am an expert foreign exchange, integrating market knowledge with a range of foreign currency contracts. I have great pride in the excellent rates of exchange I achieve for my clients, combined with exceptional customer service. 

Because I buy currency at wholesale prices, directly from the market, it enables me to pass on significant savings, often achieving up to a 5% better exchange rate than the banks. There are also no fees or commissions. 

So if the best exchange rates is something that is of interest, click below to find out more about what I can do for you. 

Click here to send me a free enquiry.

Alastair Archbold