Weekly Pound/Euro & Pound/Dollar forecast

Monday 30th July 2012

Good morning. It's a new week, and as regular readers will know, it's when I take a detailed look back over the Sterling/Euro and Sterling/Dollar exchange rate, and take a look at whether rates will go up or down in the coming weeks. So, what's been happening?

• GDP figures show recession worse than thought
• ECB will do ‘whatever it takes’ to save Euro
• Pound/Dollar hits 5 week high, Pound/Euro in decline
• Round up of the week’s other data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Last week saw minor retracements of the Euro’s relative weakness against the pound. The GBP/EUR cross fell from Tuesday’s high of 1.2856 finding support around the 1.27 level. In this week’s report we consider the announcements that generated these movements.

Last week saw Moody’s deliver a blow to the stronger Euro-economies by placing Germany, Luxemburg and the Netherlands’ AAA credit-ratings on negative watch. The announcement, tarring the nations as guilty by association, highlighted two increasing fears for the single currency; a Greek exit from the Euro and the high likelihood that the strongest Euro members might be called upon to provide more financial support for countries that have not yet received bailouts, namely Italy and Spain.

However, Euro woes were offered a momentary reprieve on Thursday via an announcement from the ECB President Mario Draghi. The president’s “bumble-bee” speech vowed to do whatever it took to save the Euro, claiming that “the Euro is irreversible”. Realistically, the only measures available to the ECB will be to again cut their main interest rate by another 25 basis points and to create a negative deposit rate.

This approach, if introduced, would undoubtedly weaken the Euro further. Not only this, but if Citibank’s claim that there is a 90% chance that Greece will leave the Euro proves to be true, contagion fears could become reality affecting Spain, Italy, Portugal, and as Moody’s have highlighted, those who would be forced to bail them out.

Last week’s fall in the GBP/EUR cross must also be attributed to the UK’s second quarter GDP results. On Wednesday official figures stated that the UK economy shrank by a greater than expected 0.7%. Despite 0.5% of the fall being attributed to the additional bank holiday, the most significant factor from the report is that the British economy is still shrinking. Calls for the “work experience” chancellor to be removed are unlikely and Vince Cable will have to continue to play his part from behind the scenes. However, the Coalition is placing significant emphasis on the Olympic Games as a source of recovery, expecting the event to bring about a third quarter rally.

Looking ahead to this week, the most significant announcement will arrive Thursday as the Bank of England prepare to deliver their intentions with regard to interest rates and the potential for more quantitative easing. All those following currency rates will be watching with intent, as without doubt, whatever the Bank of England’s proposal for economic stimulus: the currency markets will react in kind.

Need the best exchange rates? Send a free enquiry.

Sterling vs. US Dollar;

The Sterling/Dollar rate was in decline for most of last week, however on Thursday and Friday the fortunes of cable were reversed and we saw the Pound hit a 5 week high against the dollar, tracking gains in the euro and other riskier currencies as speculation of European Central Bank action lifted investors' appetite for buying riskier assets and currencies.

The reason for the GBP/USD fall mid-week emanated from the UK and Eurozone, as has been the case for some time now. The poor UK GDP figures mentioned in the Euro section were the main reason for the decline, as the economy slumped far more than expected during the second quarter.

Having said that, the fortunes of cable were reversed later in the week. Firstly the comments from the ECB president, also mentioned in the Euro report, caused confidence to return to the markets. In recent times fears over the future of the Euro has caused investors to seek the safe haven of the US Dollar, which in turn has been causing it to gain strength. The ECB support for the Euro caused risk appetite to return, bolstering riskier currencies such as Sterling. The net effect of this was a weakening of the Dollar and a rise in GBP/USD rates to the best in over a month.

We also saw the latest US GDP figures on Friday, showing that the US economy slowed in the second quarter as consumer spending eased, compounding the weakness in the Dollar.

Last month, the US Federal Reserve cut its forecast for economic growth and the figures made dismal reading for the White House. The US economy is still growing but only just and at nowhere near the level required to make a significant dent in high levels of American unemployment, which in turn is bad news for President Obama's chances of re-election in November, however any worry will be tinged with a sprinkle of relief: the figures could have been worse.

The recent gains could well be short lived however, as sterling may be vulnerable to more weakness in the coming weeks as investors price in the prospect of further QE by the Bank of England, or even a cut in interest rates.

This week, watch for the latest interest rate decision from the US and UK on Wednesday & Thursday respectively, and the US Non-Farm payroll numbers on Friday, all of which could cause significant market volatility.

It is of course impossible to predict market movements, however if the economic data from the states this week continues to be weak, then it is more and more likely that the US will opt for more Quantitative Easing. However with the UK also expected to either cut rates/pursue more stimulus, it’s likely that events in the Eurozone will continue to drive the USD's value. If the bad news keeps coming out of Europe, expect Pound/Dollar rates to retreat back down as its safe haven status comes back into focus. This is likely to be the case until political uncertainty takes the driving seat towards November.

Need the best exchange rates? Send a free enquiry.

Weekly Economic Data that may affect exchange rates

Monday – There is a good mix of data today. Starting in the UK we have Consumer Credit, Consumer Confidence measures and Mortgage approvals. Moving to the Eurozone we have the estimated GDP figures, Retail Sales, Consumer Confidence, Economic Sentiment and Industrial Confidence.

Tuesday – Starting down under today we have Australian Building permits and New Zealand Business confidence. There is no UK data of note today. In the Eurozone we have Producer Prices, Unemployment and Spanish Retail Sales. Over in the states we have some inflation numbers, Consumer Confidence and Home Price Indexes.

Wednesday – The start of a new month, and the European Council meeting starts today. Staying in Europe we see Spanish Inflation data & French Manufacturing data. Fairly quiet in the UK with a bond auction the only data of note. In the states we have an interest rate decision from the FED, construction and manufacturing spending.

Thursday – An important day for the UK today as we have the Bank of England interest rate and QE decision both of which will likely drive Sterling value in the coming months. In Europe we also have an interest rate decision so could be interesting for GBP/EUR today. Elsewhere we have Australian and Swiss Retail Sales, and various jobless and unemployment measures from the USA.

Friday – We end the week with a host of data from the Eurozone including Retail Sales and Inflation data. There are no UK releases of note. In the states we have the all-important Non-Farm Payrolls data in addition to various other measures of unemployment.

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

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Weekly GBP/EUR & GBP/USD and the weeks data

Monday 16th July 2012
Good morning. The volatility continues in the Eurozone, and markets have reacted by dumping the single currency. This pushed GBP/EUR rates to new highs last week above the €1.27 level. As always for a Monday morning, today I will take a detailed look at what happened last week, what data may affect rates this week, and the different ways you can protect yourself against adverse exchange rate movements, and achieve the best exchange rates.

In this week’s report:

• Pound/Euro hit’s new highs of €1.27
• Sterling/Dollar tumbles to $1.54
• UK Could cut interest rates, weakening Pound
• Weekly market data that could affect rates

Pound/Euro breaks through €1.27

Sterling/Euro rates fared very well last week, pushing through the €1.27 several times, only to drop back away. Most recently on Friday, Moody's cut Italy's credit rating, sending the country's borrowing costs higher and putting further pressure on its struggling economy. The effect was further weakening of the single currency, creating great buying levels.













Analysts said trade in sterling would continue to be guided by sentiment towards the euro, which remained vulnerable to further declines against a range of currencies. Moody's unexpectedly cut Italy's sovereign rating by two notches to Baa2, just two notches above junk status, warning further cuts could be on the cards if Italy's access to debt markets dried up. This came after Spain announced a further round of austerity measures following their €30bn bailout.

It’s important to remember the Pound is not very strong; it is the Euro that is weak. Any bad news from the UK could pull rates back down. There is nobody that can predict which way rates will go, but we do have tools to help you take control of your currency requirement such as Forward Contracts, Stop Loss & Limit Orders.

Some clients I speak to are holding out hoping rates will continue to climb, and of course they may well do that. Do beware however than in holding out for an inch, you may well lose a yard. The Bank of England have openly said they want a weak Pound to help exports; don't be surprised to see them talk Sterling down and these highs become a distant memory.

Of course you can hold out for more, but don't leave yourself exposed. Place a 'Stop Loss' to cover you should things not go your way. Those that always hold out for 'just another cent' usually end up with their hand caught in the cookie jar, and end up with a much worse rate than was necessary.

If you need to buy or sell Euros, and are worried about the exchange rate, then send me an enquiry. I can discuss your options and help you make an informed decision on what to do.

Pound/Dollar drops to new lows

In contrast to the Euro rate, the GBP/USD rate has been falling. This again is due to the EU debt crisis. The Dollar is a safe haven currency, and as global sentiment is very poor at the moment, the US Dollar is benefiting. This I’m afraid makes it more expensive to buy, and is the reason rates have fallen down to the $1.55 level.













Analysts also expected worries about a weak UK economy to keep sterling under pressure against the dollar, even as it continues to benefit from investors seeking alternatives to the euro. Those looking to convert Dollars to Euros however should note that the rate is close to the best it has been in years.

UK Could cut interest rates; will the Pound fall?

We recently saw another round of Quantitative Easing, however it didn’t weaken the Pound too much due to the fact is was widely predicted and priced in already. However the BoE can’t do QE forever, and should the economy not return to growth quickly, their only remaining option will be cutting the already low interest rate further.

There are reports this may happen soon, and if so could really take the steam out of Sterling’s rally against the Euro. The United Kingdom is still in recession, growth is slow and sooner or later focus will shift from the beleaguered Eurozone to the state of the UK economy.

When it does the Pound could well fall and I expect lower rates against most currencies. Whether we will see if fall against the Euro depends on developments within the Eurozone.

If you need the best exchange rates, click here to send me a free enquiry.


Weekly Economic Data that may affect exchange rates

Monday – The main data today is from the EU, where we see the latest Trade Balance figures and Inflation data. We also have some trade numbers from Italy. In the USA we see Retail Sales, inflation data and a speech from the FED. There are no UK releases of note.

Tuesday – UK Inflation numbers are released this morning, in addition to Retail Sales. In the EU we have some economic sentiment figures at 10am. Later in the day we have some US Inflation data. Moving on to interest rates, we have a decision from Canada today, in addition to the minutes from the recent Australian decision.

Wednesday – Today is important as we have the BoE minutes, so we’ll see what was discussed during the decision to conduct more QE. There are also a host of UK unemployment numbers today, so could be a choppy day for the Pound. Elsewhere we will see US Housing data, EU construction output, and a monetary policy report from Canada.

Thursday – UK Retail Sales numbers are seen at 09:30am this morning, following by some Jobless Claims and Homes Sales data from the states. We also have US manufacturing numbers. There are no scheduled releases from the EU; however the ECB is conducting its mid-month meeting.

Friday – We end the week with Import/Export prices from Europe, followed by inflation data from Germany. The only UK data of note is Public Sector borrowing. Other than that data is from Canada; consumer price index which could affect Canadian interest rates.

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

Click here to send me a free enquiry

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 25th June 2012
Good morning. As always for Mondays today I'll have a look back at last weeks events, what moved the market and the Pound Sterling Forecast for future exchange rate movements. Also I will outline the most important data releases of the week that could affect rates. In this week’s Report:

• More UK Quantitative Easing on the cards
• Spain could be next to seek bailout
• Greece forms government, calming exit fears
• Round up of the week’s other data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

It was a pretty quiet week on the rate front for GBP/EUR last week however the news and data released could have caused it to be much more volatile.













Greek Election Result

Firstly the Greek election results seemed Euro friendly as the New Democracy party was voted in with a slight majority over the anti-austerity Syriza party (without gaining enough seats to become THE majority party), as it reduced the likelihood that the Greeks would leave the Euro in the short-term, while pointing towards more favourable negotiations with the “Troika” (EU, ECB, IMF). However the fact that the Syriza party still managed to gain 26.9% of the vote (with the New Democracy party achieving 29.7%) showed the disquiet amongst the Greek population surrounding the currently agreed package.

As we moved through the week the negotiations between pro-bailout parties to form a coalition government continued until the the head of the ND party Antonis Samaras was finally sworn in as Prime Minister as head of a three party coalition government on Wednesday. This however didn’t give the Euro the push that we thought it would get as Germany continued it’s opposition to giving Greece any leeway on the current tough bailout conditions.

EU Bailouts

At the same time the Bank of Spain revealed that bad debts had risen to 8.7% of total lending for April which is the highest level for 18 years and further increased concerns over the country’s financial sector. This caused the 10 year Spanish bond yield to peak at 7.3%; this level is seen as unsustainable and is the level where other struggling Eurozone economies have sought bailouts. So while things seem to be calming in Greece at least in the short term, the eyes of the world will soon be firmly fixed on Spain which could be a much bigger problem.

Even news that Eurozone policymakers were discussing plans to reduce borrowing costs for countries under stress didn’t give the Euro any strength and we saw the mid-market rate start to climb from the week’s low of 1.2350 towards and over 1.24.

More Quantitative Easing?

Let’s not forget however that the UK is still in recession and on Wednesday the Bank of England minutes showed a much closer decision than forecast. While interest rates were held at their current all time low, the vote on further Quantitative Easing [QE] measures (previously 8-1 in favour of maintaining the current levels of monetary stimulus) showed a 5-4 split in favour of a hold. One of the members who have changed their stance towards more QE is the Governor Mervyn King and markets are now expecting another round to be announced at the next meeting on 5th July.

The last time this happened the Pound lost nearly 3 cents against the Euro in one trading day, but this was last October and was before the problems in Greece were quite as well known as they are now. After the minutes the initial drop in the Pound of half a cent was reversed later as we saw UK unemployment fall 51k for the first three months of the year, and retail sales showed an increase to 1.4% in May after the sharp April decline, and UK factory orders also showed an improvement.

Please don’t be fooled by the relative calm in the rate that we are seeing as both UK and Eurozone economies are still finely balanced and any further bad news out of Spain or Greece, or any kind of revision in UK GDP for quarter one that is released on Thursday could cause huge movements in the rate.

Do you want the best exchange rates for Euros? Send me an enquiry now.

Sterling vs. US Dollar;

Last week was yet another of Dollar strength remaining, broadly based on the currency’s safe haven status. Cable remained relatively range bound moving little more than 2 Cents throughout the week and not reacting in line with the host of disappointing data releases in the US throughout the course of the week. Both industrial production and manufacturing figures came in lower than were expected and so too did an employment data survey as well as home sales report.













Although this is welcome news for Dollar sellers, it provides little comfort to Dollar purchasers as it illustrates that Sterling positive (and Dollar negative) data seems to have little effect on the cross at the moment. The position of the GBPUSD cross seems to be governed by a far more macroeconomic and global viewpoint of the markets and the fact that in these time of uncertainly there is a clear flight to safety in the Dollar’s safe haven status.

This was evident by the fact that Sterling’s only actual gain against the greenback last week came on Tuesday following a rise in equities and commodity prices and hence investors took a movement away from the safety of the Dollar.

Operation Twist

The Dollar’s Strength isn’t a forgone conclusion as due to a run of poor data releases in the US, the Government have been forced to take action keep the economy turning and try to stimulate growth. They therefore extended operation ‘Twist’ which, although isn’t quite as dramatic as Quantities Easing is design to have a similar effect on the market and kick start the economy by encouraging spending. Since the Federal Reserve’s short-term interest rates are already at rock bottom, the bank plans to stimulate borrowing by dragging down the yields of long-term interest rates and thus make it a less attractive proposition.

The fact that the US have had to initiate this program shows that the US is struggling in the same way that economies in Europe and the rest of the world are and we may indeed see the Greenback weaken against the other major currencies as a result. Those needing to sell Dollars should certainly take this into consideration as even if it doesn’t weaken the Dollar by much it will most likely act as a limit to the gains the Dollar may be able to make.

Do you want the best exchange rates for US Dollars? Send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – The week kicks off with some German Import Price data and consumer confidence measures. Germany, Europe’s largest economy also releases its latest Retail Sales figures. Later in the day there is a Speech by the European Central Bank. Back in the UK Nationwide releases the latest house prices which are an overall barometer of the economy. In the states we see Home Sales.

Tuesday – Relatively quiet today, with only Public Sector borrowing from the UK. The rest of today’s data is from the United States: Consumer Confidence & Manufacturing figures.

Wednesday – Today’s main UK release is the latest Mortgage approval numbers. We have a raft of inflation figures from Germany at 1pm. Later in the afternoon the US has its latest durable goods orders, homes sales and consumption expenditure data.

Thursday – As is often the case, today is the busiest day of the week for fundamental data. There European council meets, with the debt crisis likely to dominate the agenda. Staying in the EU we see German unemployment, EU consumer confidence, Industrial Confidence and Economic Sentiment. The UK has its latest GDP figures to show if we are still in recession, in addition to consumer confidence numbers released this evening. The US also has its latest GDP figures in addition to Jobless numbers.

Friday – The EU council continues its meeting today, during which the EU releases its money supply data and Inflation numbers. The USA has its latest inflation numbers and consumer sentiment measures, followed by a speech from the FED.

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

Click here to send me a free enquiry

Sterling/Euro & Pound/Dollar forecast outlook

Saturday 2nd June 2012
Good morning. For a change today's post comes to you on a Saturday morning - I thought given the long 4 day break in the UK, I would post the latest currency news for the next 4 days. UK markets will re-open on Wednesday morning, and blog posts will resume then. Today I will do my usual analysis of where rates have moved in the last week, and the forecast for future exchange rate movements.

In today's Report:

• Pound/Euro falls back on poor UK data
• Pound/Dollar tumbles 10 points in a month
• EU debt crisis continues to spook markets
• Round up of the week’s other data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Last week we have again seen a similar fluctuation in the GBP/EUR cross to previous weeks, with the rates moving close to the recent 3 and a half year high near the mid 1.25’s, before dropping down to the high 1.23’s later on in the week. This has been as a result of some important activity within the Eurozone which includes increasing troubles within Spain and poor manufacturing data within the UK which will be explained in more detail below the graph.













Eurozone Problems Continue to weaken the Euro

Over recent weeks the main problems within the Eurozone were from within Greece due to the political unrest that we have seen recently. However this week we have seen fresh concerns from Spain surrounding their banking sector. The Spanish bank ‘Bankia’ on Friday revised their 2011 figures from a €300m profit to a €2.98bn loss, followed then by a request to the state for a €19bn bail-out. Shortly after this announcement, the rating agency Standard and Poor's (S&P) downgraded Bankia and four other lenders within Spain to ‘junk’ status.

Another big problem in Spain at the moment is the status of their bond yield. They are currently trading at a level of 6.5%. In the long term yields higher than 7% are deemed to be unsustainable. Greece, Portugal and the Rep. of Ireland were all at this level when they received international bail-outs, which is beginning to look like a very big possibility for Spain.

There is also still a massive amount of uncertainty surrounding Greece’s future within the Eurozone. Recent opinion polls within Greece have been contradictory of each other with varying results on whether the left wing Syriza party, or the right wing New Democracy party are leading the election, which is to be held on the 17th of June. With these problems in the Eurozone we saw the pound rise to mid €1.25’s throughout the week against the Euro, and we saw these levels stay quite flat until the end of the week.


UK Data disappoints, pulling Sterling lower

Pulling rates back down was the UK Purchasing Managers’ Index (PMI), which came in very low on Friday against what was expected. We currently have a level of 45.9 compared to the predicted 49.8. Companies cut back on production and employment as inflows of new business declined amid rising uncertainty among domestic and overseas clients. The headline index fell by 4.3 points over the month, the second-steepest fall in its 20 year history. At 45.9 we currently have the lowest PMI figures for over 3 years which has significantly weakened Stirling against a basket of currencies and pushing the GBP/EUR rate towards the high 1.23’s.

The only other key data releases of note within the Eurozone came from Germany. Unemployment change data was released with an unchanged figure following a predicted 5k decline. Consumer Price index data was also released at 1.9%, coming in 0.1% lower than predicted.

We have a very important week coming up with regards to data releases. There is lots of data being released by The European Monetary Union (EMU) including Producer Price Index, Retail Sales, GDP figures and interest rate decisions from the European Central Bank. Spain also have the release of their PMI data.

Back in the UK we have the very important releases of interest rate decisions and Quantitative easing, of which an increase of monetary stimulus has been predicted by many experts over the last month.

With some very important data being released it is shaping up to be a very volatile week for the GBP/EUR cross with the potential for the rates to fluctuate massively. It will definitely be worth your while if you are looking to exchange your currency over the next few weeks, to get in touch with us to discuss your options:

Click here to send me a free enquiry now

Sterling vs. US Dollar;

Last week was a dramatic one in the markets with the GBP/USD rate shedding around six cents in a week. Throughout last week the dollar strengthened against the pound ending the session around a four and a half month low. More talk of a Greek exit from the Euro-zone and a lacklustre response to the fiscal crisis in Europe is weighing on the pound, which had a miserable May, losing ground against the surging US dollar.













In the US, consumer confidence fell to its lowest levels in eight months as fears over the global economy caused unrest. The Consumer Confidence Index fell from 68.7 in April to 64.9 its lowest levels since October 2011. Consumer spending currently makes up around 70% of the U.S economy activity so the figures are watched closely, but even with the announcement the dollar continued to gain strength over the course of the day.

A run of positive UK data midweek could not save sterling from falling to its lowest levels for a long time. Worries over Spain’s rising borrowing costs and banking sector once again caused the value of the greenback to increase as investors headed back to the safe haven dollar.

Last Friday data showed that British manufacturing activity shrank at its fastest pace in three years in May as a broad-based global economic slowdown hit demand for British goods. This weakened the pound heavily and saw fresh lows for the currency pairing.

Also on Friday the hotly awaited non-farm payroll figures were released, American employers in May added the fewest workers in a year and the unemployment rate unexpectedly increased as job-seekers re-entered the workforce, further evidence that the labour-market recovery is stalling. There was not much of a reaction to the figures but as soon as the US markets opened, Greenback weakened against Sterling and rates pushed up higher.

It is a brave person who simply waits for the rates to move in their favour. With so much uncertainty in the markets it is important to know your options to help you make an informed decision as to when you make your move.

Click here to send me a free enquiry now

Weekly Market data that might affect exchange rates

Monday – UK Markets are closed for Spring Bank Holiday, however we will see some Halifax House Price data. There will also be various EU releases however including inflation data and Investor Confidence measures.

Tuesday – UK markets remain closed for the Jubilee. There are some EU retail Sales, Inflation data and German factory orders. There is also an interest rate decision for Australia and Canada.

Wednesday – UK Markets reopen today and there’s a lot to digest. EU GDP figures are released at 10am, and later in the morning we have an interest rate decision for the EU, followed by a press conference. There could be GBP/EUR volatility on the back of what happens today. Over in the states there are some productivity measures and the Fed’s Beige Book (this reports on the current economic situation in the USA).

Thursday – Today we see the latest decision on UK interest rates and Quantitative Easing. It’s this that will likely drive Sterling’s value in the coming weeks, so keep a close eye on what happens today. Over in the USA we see Jobless Claims and measures of consumer credit.

Friday – We end the week with a raft of data from Germany, Europe’s biggest economy: Wholesale Prices, Imports and Exports & Trade Balance figures. These releases are followed by inflation measures for the UK. Later in the afternoon we see US Trade Balance figures and Unemployment data from Canada.

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

Click here to send me a free enquiry

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 30th April 2012
Good morning. As always for a Monday morning, today I'll take a look back over the last weeks events in the currency markets, and the forecast for where GBP/EUR rates may go in the next few months. It was certainly a very interesting week with the UK officially back in recession, but despite this, GBP/EUR rates are at a 22 month high, and GBP/USD rates at a 7 month high. So without further ado let's find out why!

In this week’s Report:

• UK returns to recession
• Pound remains strong vs. Euro and US Dollar
• EU political uncertainty weakens Euro
• Round up of the week’s other data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

What could have been a very bad week indeed for the Sterling/Euro cross ended up with Sterling sitting on a 22 month high against the Euro, despite the UK going into recession.













The start of the week saw the markets waiting in anticipation for the GDP figures which were released on Wednesday with most analysts believing that the UK economy would continue to grow. News came out that the economy had shrunk by 0.2% which led to a sharp downward spike in the markets pushing the interbank into the mid-1.21s.

It was a big surprise that the UK had slipped back into a double dip recession, the first since the mid ‘70s, especially as UK consumer confidence is at a nine month high, showed by figures released by the Nationwide Building Society. Despite the figures showing contraction, the GDP figures will be revised several times in the next 6 weeks, which is another reason the markets didn’t react too much to the news, as the revised figures could of course show that we are not in recession after all.

GBP/EUR rates briefly flirted with the idea of dropping below the 1.21 level, but the drop was short lived and gains were quickly seen for Sterling as it climbed back up towards the highs that we have seen recently. Fundamentally the Euro zone still has its problems and these seem to outweigh the fact that the UK is back in a recession, hence the reason why rates remain supported at high levels

The Euro dropped further against the pound as the fragility two Euro governments came to light. The French elections are rumbling on with Sarkozy losing in the first round, and Dutch Prime Minister Mark Rutte resigning due to losing the support of the liberal-conservative coalition government sending the Dutch Government into crisis.

Also weakening the Euro was news from the Bank of Spain, when they said that their economy contracted by 0.4% for the first 3 months of the year plus by 0.3% in the final quarter of last year. This bad news was further compounded when Spain was hit by the news that rating agency Standard & Poor's downgraded its credit rating.

All of this has helped the pound keep its strength against the Euro which is now at a 22 month high. It means that this is potentially a good time to buy Euros, so if you haven’t already spoken to your FX Trader it is time to do so. Even if you don’t need your funds for some time, with a ‘Forward Contract’ you can fix the current rate for up to 2 years into the future, and only lodge a 10% deposit of the total you want to convert.

If you need the best exchange rates, send me a free enquiry now.

Sterling vs. US Dollar;

What a week it’s been for the pound/dollar cross, after Wednesdays news that the UK slipped back into recession cable jumped to its highest levels for seven months to $1.6230 as the graph below shows. Dollar weakness was the main driver as Fed Chairman Ben Bernanke left the door open for further monetary stimulus.













After a relatively stable start the week the GDP data release on Wednesday saw Sterling fall away as the UK economy fell back into recession. As the data was released rates fell from $1.6160 to 1.6080 before recovering throughout the day and pushing back over the $1.61 mark.

The UK economy slipped back into recession after contracting by 0.2% during the first three months of 2012. A recession is described as two consecutive quarters of contraction and the recent results follow on from the fourth quarter of 2011 where the economy dropped by 0.3%.

The news that the UK economy had shrunk for a second consecutive quarter came as a bit of a surprise, over the last few weeks we had seen a batch of positive data support claim that the UK could avoid the double dip. However, a fall in construction output was believed to be the reason behind the unexpected contraction.

You would think that the UK heading back into a technical recession would have led to further losses for the GBP/USD cross. But with U.S unemployment being so high it was always likely that Mr Bernanke would keep the door open for further monetary stimulus; these thoughts were also supported by the US data release that core durable goods orders contracted by 1.1% when the forecast had been for 0.6% growth.

On the back of the Fed Chairman’s speech Sterling climbed to its highest level for more than seven months against the dollar, Mr Bernanke said that U.S monetary policy was “more or less in the right place” but the central bank would not hesitate to enter into another round of quantitative easing if the U.S economy were to weaken.

It seems the UK has bounced back from Wednesdays news as data released towards the end of the week showed that UK consumer confidence reached a nine-month high in March, according to the Nationwide Building Society, the confidence index increased to 53, up nine points from February.

There is so much uncertainty surrounding the U.S and UK economy, getting the timing right on your currency transfer remains critical, if you are buying or selling dollars in the coming months contact your FCG account manager to discuss the different options available.

If you need the best exchange rates, send me a free enquiry now.


Weekly Economic Data that may affect exchange rates

Monday – We kick off the week with a host of data from the Eurozone: German Retail Sales, EU Money Supply and EU Consumer Price Index. In the afternoon we have Canadian GDP figures and Industrial Production, followed by Income data from the USA. There is no UK data of note today.

Tuesday – In Australia today we have an interest rate decision, and there is the chance of a cut. House Prices and commodity index is also released from down under this morning. UK data is quite light with only Purchasing Managers Index being released at 09:30am. We are data heavy from the US today including Construction Spending, Manufacturing, a FED Speech and vehicle sales.

Wednesday – We’ll start in the UK today where we see Halifax House Prices, Money Supply, Consumer Credit and Mortgage approvals. Over in the EU we see German Inflation data and unemployment measures, EU wide inflation numbers are also released. In the USA we will see employment data, mortgage applications and factory orders.

Thursday – We have Nationwide House Prices and UK PMI data this morning from the UK. In the EU we see Producer Price Index numbers, an Interest Rate decision and a speech by ECB president Mario Draghi. In the USA there is also another speech from the FED.
Friday – Starting in the EU we see German inflation data and EU wide Retail Sales. The main data today though is from the USA where we see Non-Farm Payrolls, which often causes volatility for GBP/USD rates. Staying in the states we also see average earnings and the unemployment rate.

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

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Weekly Forecast GBP/EUR & GBP/USD and the weeks data

Monday 23rd April 2012
Good morning, I hope everyone had a lovely weekend. As usual for a Monday morning, today I will look back over last weeks events that pushed Sterling up to new highs against the Euro and Dollar. I will also analyse the exchange rate forecast for Euros and Dollars, in addition to what economic data is out this week that I think could affect exchange rates.

In this week’s Report:

• Pound Surges through €1.22 / $1.60
• Positive BoE report and unemployment strengthen Pound
• UK GDP figures this week key to future rate movements
• Round up of the week’s other data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Euro purchasers celebrated last week after Sterling extended gains against a beleaguered Euro as investors scaled back expectations of further stimulus from the Bank of England, putting the Pound on course to allow it to rise against the euro to levels not reached since the middle of 2010.













Pound gains very well against Euro

The pound rose to its highest weekly average in over 3 years against the single currency and a five-month high against the U.S. dollar, which helped it to climb to a 20-month peak on a trade-weighted basket of currencies, data from the Bank of England showed.

Minutes from the BOE's policy meeting released on Wednesday showed the committee voted 8-1 against further stimulus, with one policymaker Adam Posen who had consistently voted for more stimulus moving away from a dovish to a more hawkish stance.


How is the debt crisis in Europe affecting things

Analysts and Traders commented that while sterling was potentially poised for more gains, a lot would depend on how the euro zone debt crisis panned out. The Spanish 10 Year bond auction went through smoothly but with limited success and borrowing costs have been rising as investors remain sceptical about whether other countries in the Eurozone can solve their fiscal problems without seeking more aid from agencies like the IMF. While a steady erosion of confidence in the euro zone supports sterling against the euro, the pounds gains can be limited to a certain extent, given the UK's large exposure to the crisis-hit euro zone.

What about further UK data? How could that affect exchange rates?

Furthermore the UK's labour market is at best sluggish at the moment, domestic demand patchy and the economic recovery uneven. So while the signs of a slight recovery lessen the need for further stimulus, a rapid deterioration in the euro zone crisis could actually worsen the UK's outlook and drive the BOE towards quantitative easing again.

On Thursday, BoE's Posen said he is worried that underlying inflation pressures have not eased in recent months and added if last month's pick-up in inflation persists, the central bank would need to rethink policy.

Whilst the Pound’s performance against the Euro can be welcomed by those people in the UK buying a property abroad, a degree of care should be taken. It is certainly true that Sterling has benefited from negative Euro sentiment recently, however the Pound shifted this week on reasonably indifferent news. The news that further QE is unlikely for the time being, acted merely as a trigger to push the cross in Sterling’s favour, although it certainly wasn’t a green light to indicate that all is well within the UK economy.

Next week sees a host of data releases including preliminary GDP figures that could potentially push Sterling back and undo that gains that we have seen this week.

In order to ensure that you remain in control of your currency purchases in order to capitalise on positive market movement and protect yourself in the event of the market moving against you, you should speak to us about our exchange rates.

Click here to send me a free rate enquiry now.

Sterling vs. US Dollar;

Last week saw the Pound continue its bullish start to 2012 against the Dollar, with the enticing level of $1.60 tangibly close as a trading level to buy. A string of positive data releases in the UK allowed the pound to flex its muscles throughout the week, with several choppy trading sessions representing fantastic buying opportunities as well as a few selling opportunities for those who got their timing right.













Many people had wondered whether the surge in rates would continue in the back drop of an improving US economy, thinking, and not illogically, that the Dollar would strengthen with economic growth. Perhaps however, US growth is exactly what is supporting the Pound in its rise against the Dollar?

Regular readers of this report will be keenly aware of the phrase ‘safe haven currency’. The US Dollar has benefited from this throughout the global recession, with investors seeking low risk investments where their money would at least be safe, even if it wouldn’t grow.

Risk sentiment drives investment away from the US Dollar

With the US economy still the largest in the world people ploughed funds into the Dollar through cash and low yield bonds to see out the storm and subsequently the Dollar strengthened massively; remember the 1.36 ‘s back in 2009? Indeed even through the mildly positive 2011 we entered this New Year with the pound struggling in the low 1.50’s with the real changes seen amid the positivity in the US economy in 2012. Droves of previously risk averse investors have sold their bonds and got out of cash and back in the hunt for yield, unsurprising then that the Dollar is now testing levels in the early 1.60’s.

So, great news then if you are looking to buy Dollars. As always though, in the most volatile markets in the world a cautionary note should be heeded. Next week sees the official GDP figures released for the UK in Q1 2012.

Have we all got ahead of ourselves? Will the OECD’s prediction of a second UK recession come true or has the UK Chamber of Commerce correctly predicted growth, however small, in the UK last quarter? Wednesday could be a key day to see whether the pound surge kicks on and continues these great buying opportunities but may still prove a sting in the tail for those looking to squeeze that little bit more out of the market.

If you are looking to buy Dollars, now is obviously a great time to talk to us given that it went to a 5 month high on Friday.

Click here to send me a free rate enquiry now

Weekly Economic Data that may affect exchange rates

Monday – UK Nationwide House Prices are released today, which reflect the health of this sector and is a barometer of overall economic activity. In the Eurozone, inflation data from Germany will be closely watched as it could affect EU interest rates in the future. Elsewhere the only data of note is Producer Price Index info from Australia, which is an inflationary measure.

Tuesday – Today the only UK data is Public Sector net borrowing, released at 09:30am. EU Industrial New Orders are released at 10am, along with some further EU inflation data. Across the pond we have US Home Sales, Consumer Confidence numbers, and Canadian Retail Sales.

Wednesday – A very important day for Sterling, as we have the latest UK GDP figures. This could move the Pound either way depending on the results showing growth or contraction. This is the most important release of the week. In the USA we have Mortgage Approvals, an Interest Rate decision and a press conference from the FED.

Thursday – Quite a lot from the EU today, including Economic Confidence, Consumer Confidence, Industrial Confidence and Retail Sales for Germany. There is nothing of note from the UK. The USA has some jobless numbers and Home Sales, and in New Zealand we will be privy to their latest interest rate decision.

Friday – We end the week with German Consumer Confidence and a US GDP data. Also in the US is consumption expenditure data and measures of Consumer confidence.

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

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Sterling/Euro Forecast, Sterling/Dollar, Fundamental Data

Monday 26th March 2012

Good morning. Regular Readers will notice the blog has had a Spring clean and a fresh new look for the new season. While the look of the blog has changed, the content has not - knowledgable currency reports to help you decide when to convert your currency, and commercial exchange rates that are significantly better than you can achieve elsewhere. As always for a Monday, today we will look at last weeks movements in exchange rates.

In this week’s Report:

• UK Budget has little impact on exchange rates


• Sterling/Euro remains range bound at €1.19/€1.20


• Pound/Dollar climbs near $1.60, but forecasts mixed


• Round up of the week’s data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Last week began positively for Sterling as it climbed to a 13-month peak against the euro on a recent run of improved UK data. Additionally, there were no surprises in the UK budget, but analysts warned that the key to whether sterling would sustain a bounce will be the response of ratings agencies, which may express concern if the budget focuses too much on growth-boosting measures at the expense of deficit-reduction efforts.

Sterling slipped on Tuesday but remained close to its recent highs after UK inflation eased less than forecast in February, but focus remained on the Chancellors Budget announcement. Wednesday morning saw Sterling fall away from the 13-month high by a little over 0.5% after the release of much higher-than-anticipated public sector borrowing for February. Any future deterioration in the borrowing figures could persuade ratings agencies Fitch and Moody's to carry out their threat to downgrade the UK's prized AAA sovereign debt status, which in turn could be a potential source of weakness for the UK currency.

The BoE minutes later in the day contributed to further weakness as the minutes returned a little more negative than most analysts were expecting. George Osborne’s much anticipated 2012 Budget however was perceived as largely neutral for Sterling, the chancellor was seen to be sticking with the coalition government's austerity drive which aims to bring the country's finances back into line in five years.

Sterling fell a further half a per cent on Thursday, after weak UK retail sales data resurrected concerns over a lack of growth in the UK economy, fuelling a reversal in speculation of more Bank of England asset purchases (QE). Retail sales suffered their biggest monthly drop in nine months in February, with further disappointment coming from sharp downward revisions to January's releases.

The Pound ended the week on a much quieter note with Friday bringing little in the way of the volatility we had seen during the rest of the week. If this week demonstrates one thing, it’s that the outlook for the UK economy and Sterling is far from certain. The economy continues to send out mixed messages and if you have an impending currency requirement the market uncertainty could leave you paying significantly more for your currency than is necessary.

If you need to get the best possible exchange rates, then you should compare the rates I can help you achieve to make sure you're getting the best possible deal. Click here to send me an enquiry and have a free consultation on what I can offer.

Sterling vs. US Dollar;

After experiencing a seven week low in mid-march, the GBP/USD rate strengthened last Monday and crossed the $1.59 barrier (interbank) which was the highest level seen since the beginning of March.













In the early part of the week the GBP/USD remained flat as the markets awaited key data in the form of Bank of England minutes and the UK budget. The minutes showed a surprisingly negative slant as rate setters Adam Posen and David Miles pushed for more quantitative easing to try to stimulate the economy. Sterling subsequently slipped against the dollar with this news and is a stark reminder for investors that the British economy is still in a vulnerable position.

"Sterling is being moved a lot more by what's going on elsewhere but I was shocked by the dovish nature of the minutes as most people thought more QE in May was off the table and this puts the risk of it back on," said Kathleen Brooks, research director at FOREX.com.

The following day the pound showed little reaction to what analysts and ratings agencies described as a fiscally neutral UK budget. Fitch ratings said finance minister George Osborne's proposals showed commitment to deficit reduction and would not impact the UK's AAA rating. The outlook for sterling depends on the economy - it could take a long time for recovery to take root, and sterling probably will only rally when there are signs that's happening. “About the best you can say of the budget was that it won't hurt” said analysts at Societe Generale.

It was a busy week in the US for data with most of it having little effect on rates. But unemployment data released last week showed a drop to the lowest level in four years, reinforcing signs the U.S. labour market is picking up. Jobless claims also decreased by 5,000 to 348,000 which continue to keep rates at a decent level.

GBP/USD has been choppy recently with the mixed economic figures coming out of both countries. We continue to see the pair make moves in both directions and many analysts are torn over their forecast with some thinking that the cross will end up towards the $1.50 level within the next twelve months, and others believing firmly that the 1.60 barrier will be broken very soon.

With so much volatility between the GBP/USD, it's wise not to leave things to chance. If you need to buy or sell dollars, send me a free enquiry now to find out what rate I can achieve for you.

Weekly Economic Data that may affect exchange rates

Monday – We start the week in the UK with Nationwide Housing Prices. At 9am Germany releases sentiment measures including Business Climate, Current Assessment and Expectations. Stateside we have some Home Sales Data at 3pm.

Tuesday – Germany has the first release of the day, with Consumer Confidence released at 7am. At 09:30am UK data starts to flow, with GDP figures and Business Investment measures. GDP in particular could have an effect on Sterling. There is also a Trend Survey from the UK today. Other data today is from the USA: Home Prices, Consumer Confidence, Manufacturing numbers and a speech by FED chairman Ben Bernanke.

Wednesday – We start in Germany again today, with inflation numbers at 7am. A few hours later the EU releases money supply data. US figures this afternoon include Durable Goods orders. There are no releases of note today from the UK.

Thursday – German unemployment is released today, but most data is from the UK: Consumer Credit, BoE Credit report, Money Supply, Mortgage Approvals and net lending. All of this is released at 09:30am so watch for any effect on the Pound. We also have UK Confidence measures released in the evening. Before that there is a host of US data including GDP, Jobless Claims, Industrial Production and another speech by Ben Bernanke.

Friday – There are no UK releases today. To end the week we have German Retail Sales, EU Consumer Confidence. Stateside watch for Personal Consumption Expenditure figures, Inflation data, and a consumer sentiment survey.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 27th February 2012
Good morning. A new week, and as usual I will take a detailed look at the last weeks movements in Sterling/Euro, Sterling/US Dollar and the forecasts for where rates are headed through 2012. I will also list the weeks economic data releases that I think will have the biggest impact on exchange rates.

In this week’s Report:

• Pound falls to 10 week low vs. Euro
• Dovish BoE Minutes pushes Sterling down
• Greek debt crisis – is it really over?
• Round up of the week’s data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Last week saw the single currency gaining on investor relief that Greece’s second bailout package was agreed by European authorities. The end of the week saw the GBP/EUR Interbank rate around the 1.18 level, and the sharp decline is clearly illustrated in the chart below:













The start of the week saw the Euro strengthen against the Pound as the markets showed renewed optimism towards the Greek bailout fund being agreed. Talks progressed Monday and continued through the night. In the early hours of Tuesday morning Euro groups President Jean Claude Juncker announced that the €130bn agreement had been reached.

The Euro group made clear that reaching these debt levels was conditional on strict implementation of future policies. Greece would have to show that they are actively decreasing their debts, and accept a permanent presence of EU monitors to oversee economic management. The Euro did show gains through the day but not by much as many think it will not be the answer to Greece’s debt crisis and it is only helping to delay the inevitable Greek default.

Sterling reached a 10 week low against the EUR on Wednesday after the Monetary Policy Committee (MPC) minutes revealed an unexpected vote split with two MPC members voting in favour of more Quantitative Easing (QE). Analysts have expressed that further QE in May is highly unlikely and BOE actions will be tied to economic prospects. As a result the GBP/EUR cross fell from a high of 1.1928 to a low of 1.1820 with the pair opening slightly lower on Thursday morning.

The end of the week saw Sterling pull away from the 10 week low, although expectations of more monetary stimulus by the Bank of England could prevent the GBP/EUR cross hitting the 1.20 levels we saw earlier this month. It now seems that the UK economy may avoid another recession after a rise in customer spending and an upsurge in exports to help the UK economy bounce back, but the ever present threat of further QE will likely hamper any decent gains.

GBP/EUR has now broken €1.20 quite a few times in the last few years, but each and every time the spike is short lived and rates tumble back away. For those hoping rates will recover, recent UK data suggest the Pound will remain weak for some time to come.

A forward contract is an excellent option for anyone wanting to lock into the rate of exchange now and to secure the purchase or sale price of a property, and protect yourself against adverse exchange rate movements.

If you're looking for the best exchange rates, click here now to send a free enquiry.

Sterling vs. US Dollar;

Last week was relatively quiet in the US after Presidents Day on Monday, but it did not stop it from being another volatile week for the GBP/USD cross as rates swung on the back of news from the UK and Europe. We started the week in the mid $1.58’s but as the week progressed we saw a sudden 1.5% drop as rates fell back into the $1.56’s before slowly recovering. To put this kind of movement into prospective a £200,000 trade would have seen you receive $4000 less on Wednesday than at the start of the week.













As news of the Greek bailout package came to light the GBP/USD cross began to move towards the highs we saw in October. However, Wednesday morning saw the Pound lose ground against the US Dollar as the Bank of England (BoE) minutes were released. In his last speech Sir Mervyn King announced that the bank would inject a further £50bn into the economy through its Quantitative Easing (QE) programme. However data has shown that two of the nine Monetary Policy Committee (MPC) members actually voted for a £75bn boost.

As soon as the data was released we saw rates drop across the board, the GBP/USD reacted by dropping briefly into the $1.56 level before recovering back into the low $1.57’s. With two MPC members voting for further stimulus it shows that some still believe the UK to be on fragile ground and believe the BoE should increase its asset purchasing programme. So far the bank has pumped £325bn into the economy since the UK credit crisis began.

With the recent gains from the from the Greek bailout and the positive data that has come out of the UK (retail sales and public sector borrowing) it shows how quickly the markets can move against you.

As the week progressed, news from Germany that business confidence was at a 7 month high would have given investors added belief that the Euro-zone could be about to turn a corner. When you have positive news coming from Europe investors tend to leave the Safe Haven status of the Greenback and head back into the bloc currency, this will lead to the dollar losing strength and make it cheaper to purchase.

With many analysts still concerned that the Euro is under threat any talk of a Greek default or a Euro recession could see the pound/dollar start to move back towards $1.50 as investors look to protect themselves with a flight to safety.

If you need the best exchange rates, click here to send a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – Today in the UK we will see House Price data from both the Halifax and Nationwide, showing how this sector is performing. It’s also a barometer of the economy as a whole and so could affect Sterling. German Retail Sales will also be watched and could affect GBP/EUR rates.

Tuesday – In the Eurozone today we will see measures of Economic Confidence, Consumer Confidence and Industrial Confidence. In Germany, there are some inflation measures and a Consumer Sentiment Survey, so lots that could affect the Euro. The only UK data of note is a CBI Trades Survey. In the USA we will see Consumer Confidence measures and Durable Goods Orders.

Wednesday – We start the day with German unemployment data, followed by inflation data from the Eurozone. In the UK we have Mortgage Approvals. Stateside the GDP figures will be closely watched to see how the economy is performing.

Thursday – The EU economic summit today could affect the Euro. In terms of Fundamental Data the most important releases are Swiss GDP, EU Inflation and Unemployment data, and US Jobless numbers. Also in the states we see Construction and Manufacturing numbers. Unusually for a Thursday there is nothing of note from the UK.

Friday – The EU economic summit continues, and there are further inflation numbers for the EU. There are some minor construction numbers from the UK, and GDP figures released from Canada at 13:30.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exhange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 20th February 2012
Good morning. As always on a Monday, today I will take a detailed look at movements in the last week against Pound/Euro, Pound/Dollar and the forecast for what might happen with exchange rates this week, in addition to the weeks economic data that might move the markets.

In this week’s Report:

• Key deadline on Greek bailout today
• BoE Inflation Report strengthens Pound
• Forecast for GBP/EUR and GBP/USD
• Round up of the week’s data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Sterling finished in a strong position last week against the Euro following better than expected retail sales and nervousness amongst investors over whether the long awaited Greek Bailout will be approved.













The Euro was also on the back foot on Friday following the resignation of the German President Christian Wulff. He was forced to resign after prosecutors asked for his immunity to be lifted as part of a corruption investigation. Whilst Chancellor Merkel played down the significance of his departure, it was significant enough for her to cancel a trip to meet the Italian Premier today ahead to the Greek bailout decision on Monday – which incidentally is deeply unpopular and controversial in Germany.

Movements in sterling have been dominated by developments in Greece recently, with the pound outperforming the Euro. Greece now expects Euro zone finance ministers to approve a deal on Monday that will pave the way to a debt swap with private bondholders, seen as crucial if the country is to avoid a disorderly default.

Earlier in the week the Pound drew support from the Bank of England's decision to keep interest rates on hold again and also the latest inflation report which dampened expectations of further monetary stimulus. But gains were limited as BoE Governor Mervyn King said there were still downside risks to a UK economic recovery given the tight fiscal conditions at home and weakness in Britain's major trading partners such as the Eurozone.

The BOE raised its two-year inflation forecast to around 1.8 %, higher than the expectation of most economists. The lower inflation expectations had been keeping alive prospects of it further quantitative easing. More QE usually has an adverse impact on the strength of the currency and so therefore this news bolstered the Pound.

All eyes will be on Greece heading into the new week and whether the bailout will be approved. An approval, despite its austere implications to the people of Greece will offer the markets some certainty and may see the Euro strengthen against the Pound. Send me a free enquiry now and discuss your options to protect yourself against any unwelcome market movement. A ‘Stop-Loss’ order can limit any losses to you in a falling market yet keep your position open for you to capitalise should the market do the opposite and move in your favour.

Looking for best exchange rates for Euros? Click here to send an enquiry.


Sterling vs. US Dollar;

It was a choppy week for the GBP/USD cross with rates moving between the $1.56 level and reaching highs of just below $1.59 on the mid-market.













The main factor behind the early week lows was the threat of a downgrade of the UK’s AAA credit rating by the credit rating agency Moody’s. This was due to a combination of weak growth and also due to the UK’s exposure to the Euro zone debt crisis. There was also key data released which showed that unemployment rose by 48,000 to 2.67 million in the three months to December, official figures have shown, the smallest rise in almost a year.

However, the number of claimants was nearly double the forecast. The rise in unemployment had been forecast because there is simply no growth. With this in mind, Sterling still took a hit pushing down into the $1.56 region against the Dollar.

The pound gained momentum after comments from BOE Chief Mervyn King regarding the interest rates being kept on hold and prediction of no further stimulus in the UK. This positive news for the pound was also coupled with a rise in retail sales which rose 0.9% in January compared with December, according to the latest figures from the Office for National Statistics (ONS). The figure was much stronger than forecast as many economists had expected sales volumes to fall.

Everything surrounding the future of where rates are heading depends on the outcome in Europe. With an announcement on new bailout due to be released today, it will be interesting to see what the outcome holds for Sterling and the Dollar.

If approved it could well see a flight from safety and see the dollar strengthen against the pound. A flight to safety is when global investors worry about economic uncertainty and flock to the ‘safe haven’ status of the US Dollar. This in turn strengthens it and makes it more expensive to buy, pushing the exchange rate lower. This could be reversed should a bailout be agreed today, and this in turn may push GBP/USD lower.

With so much movement between the GBP/USD timing is essential when buying or selling currency. By clicking here and making a free enquiry you can have a free consultation to help you make an informed decision as to when you make your move.

Looking for the best exchange rates for Dollars? Click here to send an enquiry.

Weekly Economic Data that may affect exchange rates

Monday – Markets will be very quiet for fundamental data today as the US is closed for President’s Day. This by no means mean the currency markets will be stagnant however, as today we expect the Greek bailout vote to be agreed by the EU, which is likely to have a big impact on exchange rates. The only fundamental data of note is UK House Price info and the RBA minutes from Australia.


Tuesday – Markets will continue to react to yesterday’s Greek bailout decision. We also see UK Public sector borrowing, Consumer Confidence measures from the EU, and Retail Sales from Canada.

Wednesday – A key day, as we will see the BoE minutes from the recent decision to increase QE. The discussion notes and votes often impact GBP. In the EU there are various inflation numbers from Germany and the whole EU. In the USA, Home Sales and mortgage applications are the main releases.

Thursday – Today in the UK we see the latest mortgage approval numbers showing the health of the housing market. There is also a UK Industrial Trend Survey. In the Eurozone there are some German Confidence measures. Stateside we have Housing Prices and Jobless claims.

Friday – Another key day for the currency markets. There is the G20 meeting which could affect exchange rates. Germany and the UK both release Gross Domestic Product figures; these often have a big impact on the value of a countries currency. In the USA we see home sales and consumer sentiment.

If you need to buy or sell foreign currency, click below now to send us an enquiry for free. Our exchange rates are up to 5% better than offered by banks. Take the first step to making the most of your currency now.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 13th February 2012
Good morning. So, the start of a new week in the currency markets, so a review of the last weeks movements is in order, in addition to forecasts for Pound/Euro and Pound/Dollar, and the weeks economic data releases that I think will affect exchange rates.

In this week’s Report:

• Bank of England announce £50bn Quantitative Easing
• Greek Bailout – will they or won’t they?
• Forecasts for GBP/EUR and GBP/USD
• Round up of the week’s data that may affect rates

(For currencies other than GBP, EUR and USD, contact us for a consultation)

Sterling vs. Euro;

Events in the euro zone continued to drive currency movements with Sterling beginning the trading week with a rise against the euro as Greek politicians struggled to find a consensus on bailout terms, heightening anxiety over the debt crisis in Europe. Failure to secure a second bailout would result in an unruly default by Greece on its sovereign debt.













Last week’s run of positive UK economic data gave some added support to sterling, though it seemed unlikely to dissuade the Bank of England from announcing an increase in the asset purchase programme (Quantitative Easing) that has been weighing on Sterling. Quantitative easing involves flooding the market with more pounds and is usually negative for the currency.

As expected and predicted here on the Blog last week, the BOE left its key interest rate at a record low of 0.5 per cent on Thursday and said it would buy another 50 billion pounds of assets mostly government bonds with freshly printed money. This resulted in Sterling falling into the high 1.18 level before recovering on an accompanying statement in which the BoE sounded more upbeat, saying recent surveys painted a more positive picture of the UK economic recovery however Europe’s debt crisis still posed the biggest risk going forward.

Developments in Greece remained firmly in focus to see out the week. Greek political leaders said they had clinched a deal on economic reforms needed to secure a second EU bailout, but euro zone finance ministers demanded more steps and a parliamentary seal of approval before providing the second bailout. A Crucial parliament vote was due over the weekend or today.
So despite the QE uncertainty now being settled, rates could go either way depending on developments in the Eurozone in particular Greece.

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Sterling vs. US Dollar;

Last week saw the Pound make steady gains against the Dollar despite fears that Thursday’s announcement of more quantitative easing by the Bank of England would weaken Sterling across the board and drive GBP/USD rates down.

Conversely, Sterling Dollar rates actually climbed half a cent at the time of the announcement as investors saw the Bank of England’s decision as a positive step towards stimulating economic growth.













Subsequently, investors moved away from the perceived safe-haven of the US Dollar and into riskier currencies, benefiting the Pound and driving GBP/USD rates upwards.

As has so often been the case recently, it is difficult to comment on the movement of Cable, without mentioning the effect the current Eurozone crisis is having on the currency pairing. In what seems to be a never-ending saga, all eyes were on Greece last week as it was hoped that they would reach an agreement on austerity measures and avoid a disorderly default. The belief that a deal would be struck broadly buoyed riskier currencies, strengthening the Pound and weighing heavily on the safe-haven Greenback, driving Cable up to 1.5929, its highest level since mid - November.

The Bank of England sounded a bit more positive about the UK’s economic prospects last week after better than expected PMI data was released on Thursday. Recent surveys had painted a more positive picture and inflation is expected to undershoot 2 % in the medium term without the need for further adjustments in monetary policy.

The Pound was further boosted after UK industrial data beat forecasts and the trade deficit narrowed more than expected. However, Sterling’s rally proved to be fleeting as GBP/USD rates dropped off sharply on Friday, dropping around a cent over the course of the day, after a reversal in risk sentiment as investors once again moved towards the safe-haven.

"We have a slightly more risk averse environment today but sterling has performed relatively well in the aftermath of QE," said Simon Derrick, head of currency research at Bank of New York Mellon. Analysts said further jitters about Greece would probably push the pound higher against the euro, but put it under pressure against the safe haven dollar. GBP/USD ended the European session last week in the mid $1.57s.

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Weekly Economic Data that may affect exchange rates

Monday – We ease into the week with a quiet day for fundamental data releases. Of note we have German wholesale prices and a press conference with US president Barack Obama, where he is giving a speech on a range of issues including the economy, which may have an indirect impact on the financial markets.

Tuesday – Today is much busier, particularly for the UK. The key releases are House Prices, Consumer Price Index and Retail Price Index. All of these are a barometer of inflation and economic activity. In the Eurozone there are measures of Industrial Production and Economic Confidence. In the USA we have Import Prices, & Retail Sales. There are also Retails Sales released in New Zealand, and Consumer confidence measures from Australia.

Wednesday – We kick of the German GDP data at 7am, followed by a raft of UK data at 09:30am including Average Earnings, Unemployment, a BoE inflation report and a speech by BoE governor Mervyn King. We will also see EU wide GDP and Trade Balance figures. In the USA there are some Industrial production figures followed by the Federal Open Market Committee (FOMC) minutes.

Thursday – Let’s start in Australia where we will see Inflation data in addition to unemployment figures. In Europe a report is released by the European Central Bank. Further afield in the states we have various Jobless measures and various numbers showing inflation. After all the data is released one of the FEDs members gives a speech.

Friday – A busy end to the week as the world’s finance ministers meet for the latest G20 meeting. We also see UK Housing Prices & Retail Sales. We end the week with measures of inflation for Germany and the EU and the USA.

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