Why has Pound/Euro risen to €1.38?

Pound/Euro surges on ECB comments 

In my last post on Tuesday, I said that today’s ECB press conference would be key to GBP/EUR rates, and that if there were hints they would extend their stimulus programme, the Euro could weaken and GBP/EUR rates would rise. This is exactly what we have seen happen today as they said that their Quantitative Easing programme would need to be re-examined. Look at the effect it has had on GBP/EUR and GBP/USD in the charts below: 

Pound/Euro rises by 2 cents: 

 Pound/Dollar drops by 1 cent:

ECB to re-examine its stimulus programme 

Inflation is low in the EU, but they can’t cut interest rates as they are already at 0.05%. As I’ve been saying recently, the only clear solution is to increase their QE programme. Today, the ECB president said that "The asset-purchase plans are proceeding smoothly and continue to have a favourable impact," adding that "The degree of monetary policy accommodation will need to be re-examined at our December meeting." 

What does this mean? In a nutshell this means more Euros will be pumped into the economy later this year, and as such the Euro has weakened significantly and is cheaper to buy. 

The news has also affected GBP/USD rates, as investors dumping the Euro have instead purchased the US Dollar, causing it to gain strength and become more expensive pushing GBP/USD rate lower by 1 cent. You can clearly see the 'inverse correlation' in the charts above, as at 13:30pm when the news broke, the graphs move in opposite directions. 

Do you have currency to convert? 

Those needing to buy Euro should consider taking advantage of this spike in rates we have seen today. It could go higher of course, but usually a large spike such as this is short lived, and recent gains haven't lasted very long, so while impossible to forecast, I expect rates to drop back away by the end of the week. 

Do you need the best exchange rates? 

If you would like to discuss the currency markets to help you decide when to fix an exchange rate, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today. 

I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it's certainly worth getting in touch to see what I can do for you. 

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

Different ways you can get the best exchange rates

Thursday 8th October 2015 
The currency markets have been calmer this week, with not as much fluctuation a we have seen in recent weeks. In the chart below, you can see that the Pound/Euro rate in particular has remained range-bound between 1.3550 and 1.3650 in recent days: 

The reason rates are relatively stable is that economic figures have been roughly as expected. UK GDP is around 0.5% which is about what the markets thought. German Exports were down but it didn’t really weaken the Euro much. The Bank of England (BoE) have kept interest rates on hold as expected, and the speeches by the central bank governors didn’t really give any surprises. It’s still the case that the BoE will likely raise rates halfway through 2016 and I don’t expect much Sterling strength until then. 

How to buy currency at the best exchange rates 

Given the relative calm in the markets, I thought today would be a good opportunity to outline the various contracts that I can offer to help you get the best exchange rates and protect you against adverse movements in currency prices. I can source you rates up to 5% better than banks and other brokers may offer, so if you have a currency transaction and would like a quote to compare, then get in touch for free here. 

Here are the main contracts I can offer for currency exchange: 

Spot Contract (Buy your today) – This is the most popular way to buy currency. You fix a rate over the telephone, settle within 2 days, and your currency is transferred by priority transfer to the account of your choice. The rate varies throughout the day as we buy live from the market, and can be up to 5% better than your bank or existing broker may offer. 

Forward Contract (Fix into the Future) –You can fix today’s rate of exchange for up to 2 years, protecting you against volatility and helping you to budget. You lodge 10% of the total to be converted within 2 days, with the remaining balance due when you want your currency transferred. This type of contract really helps budgeting for business’s and those buying or selling property abroad. 

Limit order (Hold out for a better rate) – Secure your currency when your desired rate becomes available; particularly useful if time is on your side and you think the rate may get better. This allows you to aim for a higher rate in the hope that things will get better. 

Stop loss order (Protect against rates dropping) – Your currency is exchanged if the rate goes below a pre-determined level. Combined with a limit order, you can hold out for a better rate while protecting yourself from a sudden fall in the market. This gives you a worst case scenario so you don’t end up paying more than necessary for your currency. 

So that's a brief overview of the main contracts I offer. I also provide a free consultative service for any clients who need the best exchange rates in order to explain what may move the rate, to help you decide when to fix a rate and what contract type to use. Using these types of contract give you control over your currency purchase. The alternative is simply sitting back and hoping the exchange rate will move in your favour. In my experience, hope is not a reliable economic tool. 

To discuss our contract types in more detail and take the first step to taking control of your currency needs, contact me today by sending me a free enquiry by clicking below, and I will get in touch personally to discuss your requirements. 

Click here to send me a free enquiry and get a quote.

Why has Pound/Euro fallen to €1.34?

Friday 2nd October 2015
The Pound/Euro rate has fallen sharply today, dropping from €1.36 to €1.3450 as you can see from the chart below: 

Why has the Pound fallen against the Euro? 

It was actually due to data from the United States. At 13:30pm today the USA released their Non-Farm Payrolls data, which shows the number of new jobs created (not including agricultural jobs as they are seasonal, hence the name non-farm). The markets expected 203,000 new jobs, but the actual figure was a dismal 142,000. 

Because the number was worse than expected, investors sold the US Dollar and bought the safe haven Euro, causing it to gain strength and become more expensive to buy. This is why GBP/EUR fell sharply at 13:30pm as you can see from the graph above. You can see the inverse correlation for Sterling/Dollar, which rose as the Dollar weakened: 

 
 
Need the best exchange rates? 

If you would like to discuss the currency markets to help you decide when to fix an exchange rate, or would like to get a quote for your currency exchange to compare with your bank or existing broker, then click here to send me a free enquiry today. 

I will get in touch with you personally, and often better rates available at banks or other currency brokers by as much as 3%, so it's certainly worth getting in touch to see what I can do for you. 

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

Bank of England could cause Pound to fall sharply

Friday 18th September 2015
FED leave interest rates on hold 

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

Click here for a quote on US Dollars.

Will Pound/Euro rates go up or down? 

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



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

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

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

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

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

Get in touch to discuss your options 

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

Send me a free enquiry today

Pound/Euro rises on ECB comments

Thursday 3rd September 2015
After falling 9 cents in the last month, Sterling/Euro rates have staged a slight recovery today, pushing back above €1.37 as you can see from the chart below: 

ECB cuts inflation and growth forecasts 

The reason for the rise in rates wasn’t anything to do with the Pound, but rather the Euro weakening and becoming cheaper to buy. This was because the European Central Bank (ECB) has cut its inflation and growth forecasts for the next few years. 

They said that inflation in the Eurozone would probably be very low indeed for years to come and in turn this means that economic growth is unlikely to increase as much as had been thought. The banks president Mario Draghi said it expected inflation to be 0.1% for 2015, rising to 1.5% in 2016 and 1.7% in 2017, dampened by lower energy prices. They also hinted that further Quantitative Easing (QE) may be requried to shore up the economy. QE effectively creates new money to pump into an economy and usually weakens a currency as more of it is in circulation. 

The Euro dropped like a stone on these comments and because all of this means that the EU recovery is not quite as on track as analysts and investors had thought, the result has been a sell-off in the single currency, causing it to weaken and push exchange rates back up to €1.37. 

Do you need to buy or sell Euros at the best rate? 

A typical purchase of €250,000 to buy a property abroad has differed in cost by over £11,500.00 in the last month alone, which really illustrates how important it is to get your timing right when fixing your rate of exchange. If you need to convert currency and would like to discuss the market and ways to protect you against market fluctuations, I am happy to speak to any potential clients that would like a quotation to compare what I can offer with their bank or existing currency broker. On average the rates I can provide are 2 to 3% better than available elsewhere which can mean huge savings when converting a large sum.

Click here to get in touch for a quote

GBP/EUR falls 4 cents in 1 week, before recovering to €1.42

Tuesday 18th August 2015 
It’s been an interesting week in the currency markets since my last post a week ago. (Apologies for the lack of updates recently; my girlfriend managed to break her leg quite badly so I’ve had other priorities!)

In the last week we saw Sterling weaken significantly, pulling GBP/EUR rates down from €1.42 back into the €1.39’s. Today however we have seen a significant recovery, and during trading today we have seen the rate shoot back up over €1.42. After a look at the last 7 day GBP/EUR chart I’ll explain what has been causing the volatility. Sterling/Euro over the last 7 days: 

What caused the Pound/Euro rate to fall into the €1.39s? 

It was a combination of poor UK economic data, positive data from Euro, and a 3rd €86bn bailout finally agreed for Greece. 

Let’s start with the UK numbers. Sterling fell sharply last Wednesday as numbers showed that wage growth had slowed, reflecting a slowing of the UK’s economic recovery. In turn the numbers means it’s more and more unlikely that the Bank of England will raise interest rates this year. Investors duly sold the Pound, causing it to weaken significantly. GBP/EUR fell 4 cents in a 1 week period, which goes to show just how quickly exchange rates can change in the currency markets. 

It was a different story in Europe, with figures showing that the EU economy grew by 0.3%. Even Greece managed 0.8% growth, and it seems that the ECB Stimulus program seems to be working. The Euro gained strength as a result and became more expensive to purchase. 

Finally, Greece was back in the headlines but this time for the right reasons. The 3rd bailout of €86bn has finally been agreed after months of negotiations, which regular readers of my blog will be well aware of. Greece’s debt problems have been one of the main factors weakening the single currency recently, so with the issue finally sorted, the Euro gained against other currencies. All of the above caused the decline in GBP/EUR pushing rates below the key €1.40 level. 

GBP/EUR pushes back above €1.42 

Pound/Euro rates fought back today however. When I returned to work this morning the rate was sat around €1.4050. At the time of writing, we have seen the pair rise by more than 1% to rest just above the €1.42 mark. This morning the latest UK inflation numbers were released and were better than expected. While still very low at 0.1% and well below the Bank of England’s target of 2%, it does mean that we could now see a UK interest rate hike sooner than thought. 

One of the BoE’s Monetary Policy Committee members Ms Forbes has said that a rate hike took between one and two years to take full effect, and as a result, rates would need to rise "well before" inflation hit the Bank's 2% target. 

Do you need to convert currency at the best exchange rates? 

In addition to explaining what moves exchange rates, I can also provide you a quote for your exchange. I am the foreign exchange manager for one of the UK’s largest currency brokerages, and the rates we can achieve are some of the best available and as much as 5% better than your bank can offer. 

I can offer a quote in almost every currency pair including GBP/EUR, GBP/USD, GBP/AUD, GBP/NZD and many more. If you would like a quote, or to discuss which way the exchanges rates may move, then contact me today by clicking below. It costs nothing to make an enquiry, and I can usually save my clients around 2 to 3% on their exchange. This may not sound much, but when converting large sums the savings are thousands of pounds. 

Click here to send me an enquiry and get a quote today.

 

Sterling gains on BoE MPC minutes

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

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

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

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

View live currency graphs here

Today’s Data 

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

Getting the best exchange rates 

If you want to get the best possible exchange rates, then contact me for a quote. I provide commercial rates of exchange to private and corporate clients looking to trade £5k+. You can send me a free enquiry using the link below, and I will get in touch personally to discuss your requirements, explain how the service works, and discuss the different options you can consider to help you get the best rate of exchange possible. 

Click here to discuss your currency requirements today.

 

Why has Pound fallen against Euro June 2015?

Tuesday 2nd June 2015
This morning we have seen GBP/EUR rates plummet, with the currency pair falling by 2.5 cents from €1.3950 this morning, to €1.37 at the time of writing:

What has caused the drop? 

The reason for the drop was a strengthening Euro. Earlier today we saw the latest EU inflation numbers, and these showed that inflation in the Eurozone turned positive in May after five months of negativity, and this revives hopes of an economic recovery in Europe. Earlier this year, the European Central bank embarked on a huge €1.1 trillion Quantitative Easing, or money printing programme in an attempt to stimulate the Eurozone economy, and the figures today suggest that this is working. That is why the Euro gained strength and has become more expensive to buy. 

Meanwhile in Greece… 

Also today there may have been developments in Greece. Their Prime Minister Alexis Tsipras has said that he has issued "a realistic proposal" to its international creditors in an attempt to secure a deal over its debts. "We have submitted a realistic plan for Greece to exit the crisis," he said. The problem is, we don’t know what this plan actually entails! International Monetary Fund chief Christine Lagarde and ECB president Mario Draghi are at a meeting between German Chancellor Angela Merkel and France's Francois Hollande discussing the issue at the moment, and their attendance shows how serious these talks are. 

If they really have made a plan that might be accepted, expect the Euro to gain further strength in the coming days pushing rates even lower. If however his plans come to nothing, then the uncertainty about what will happen with Greece will remain, and this could weaken the Euro and cause rates to recover 

Worried about Pound/Euro exchange rates? 

If you need to convert Pounds to Euros, or Euros back to Pounds at the best rates, then you can send me an enquiry to have a free consultation on exchange rates. I can discuss your particular requirements, explain what could move the exchange rate, and explain various options you can consider as to when to fix an exchange rate. I can also provide you a quote for your exchange that could be up to 5% better than available at your bank, which could save you thousands of pounds on a large transfer. 

Click here to send a free enquiry today

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

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

Why has the Pound fallen against the Euro? 

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

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

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

Which way will exchange rates move this week? 

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

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

This week’s economic data releases 

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

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

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

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

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

Getting the best exchange rates 

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

Why not give me a try? The rates and service I provide are exceptional, and with over 10 years’ experience helping personal and business customers with their currency requirements, it may be prudent to see if I can do the same for you. Send me a free no obligation enquiry today by clicking below. 

Click here to send me an enquiry

GBP/EUR breaks €1.40 on strong UK Retail Sales

Sterling/Euro rates have today pushed through the €1.40 barrier again today, following stronger than expected UK Retail Sales data. This is the 3rd time in the last few months the pair has broken through the key 1.40 level: 

The much better than expected Retail Sales reflect a growing confidence in the UK economy, and as such Sterling has risen against other currencies. Also helping the Pound this week were the minutes to the recent Bank of England decision to hold interest rates. While all 9 members voted to keep rates on hold, it seems for 2 of them it was a finely balanced decision. This means that despite inflation turning negative this week, a 2016 interest rate hike could be on the cards, helping boost the Pound. 

Will Pound/Euro rates remain above €1.40? 

It’s impossible to predict of course, but looking at past performance it’s clear this level has been reached several times in the last few months before dropping back away. The only thing keeping the rate high is uncertainty over Greece’s next debt repayment. If they make progress in this respect then expect the rate to drop back away. If it looks like they will have difficulty meeting their commitments, the rate may be sustained above €1.40. 

Getting the best exchange rates 

If you have a currency transaction to perform, then get in touch for a quote and free consultation on the rates and service I can offer you. With rates up to 5% better than banks can offer, coupled with a range of contract types to protect you against adverse exchange rate movements, I could save you thousands on your currency transfer. I can help with bank to bank transfers for amounts £5k + and can source over 35 major international currency pairs including GBP, EUR, USD, AUD, NZD, CHF, CAD, HKD, SEK,NOK, DKK, HUF, TRY, PLN, CZK, SGD, THB, CNH, ZAR. 

Click here to send a free enquiry today

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

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

What has been happening with the Pound/Euro rate? 

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

Will Pound/Euro rates drop as the election approaches? 

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

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

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

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

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

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

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

Alastair Archbold

Pound/Euro back to €1.38, will Sterling go up or down?

Wednesday 8th April 2015
Since the Easter break, Pound/Euro rates have seen a very decent recovery, rising from 1.3550 to 1.3800 today, as you can see from the chart below: 

Before the Easter weekend, the Pound had come under pressure due to political uncertainty in the run up to the general election. This had pulled rates down from 1.38 to the 1.35’s. The reason it has gained and recovered these losses is due to better than expected UK economic data. 

Why has the Pound gone up against the Euro? 

This week we have seen figures that show activity in the UK's services sector grew at the fastest pace in more than 6 months. We have also seen the Confederation of British Industry (CBI) forecast UK economic of 0.7% in the three months to March which is better than it has been. We also recently saw the Office for National Statistics (ONS) revise economic growth upwards. We’ll have to wait a few more weeks however before the first official estimate of the UK's economic growth for this year. 

Will Sterling go up or down in the next few weeks? 

All in all the numbers are good, and this has given renewed optimism for the Pound. I still don’t think this will be sustained. We saw a very similar trend a week ago when rates rose to 1.38, but he gains were short lived. As you can also see form the chart above, the rate quickly dropped back 2 cents and the reasons for this remain – political uncertainty on the run up to the general election. 

In addition to election jitters, Sterling could come under pressure this week due to a statement from the Bank of England. They don’t want the Pound to be this strong against the Euro and we may see comments designed to weaken Sterling. Also watch out for Friday when the latest Industrial and Manufacturing production figures are released. The numbers are expected to show growth of 0.3% and 0.4% respectively. If the actual numbers are lower than this Sterling will fall against other currencies and vice versa. Also on Friday a GDP estimate could affect the Pound. 

Do you need to convert currency at the best exchange rates? 

If you have a currency transaction to perform, would like a quote, or to simply discuss the market or anything I’ve covered above, contact me for a free no obligation consultation by clicking below. 

Click here to send a free enquiry today.

UK growth figures push GBP/EUR above €1.38

We’ve seen a spike in GBP/EUR rates during trading today, pushing up nearly 2 cents from 1.3650 to 1.3830 as the chart below shows: 

UK Growth revised up 

The reason for the steady gain for the Pound was this morning’s figures that showed UK's economy grew at a faster pace than initially estimated last year. You can read a full outline of the improved growth figures here on the BBC website.

I’m still of the view that Sterling will struggle to gain given the upcoming election uncertainty that’s likely to last until the end of May. Still, those with Sterling to convert to Euros should consider taking advantage of this spike in the markets. 

Do you need to convert currency at the best exchange rates? 

If you have a currency transaction to perform, would like a quote, or to simply discuss the market or anything I’ve covered above, contact me for a free no obligation consultation by clicking below. 

Click here to send a free enquiry today.

Pound/Australian Dollar drops as RBA leaves rates on hold

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

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

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

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

What's happening with Sterling/Euro rates?

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

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

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

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Pound rises to €1.35 – a 7 year high vs the Euro

Tuesday 10th February 2015
Since my post a week ago, as you can see below, the exchange rate has recovered and risen back to its 7 year high of €1.35. 

As we will see in a moment, there are several factors that have caused the gains, including robust UK economic data giving the Pound a lift, the Euro remaining weak due to uncertainty over Greece, and stronger data from the United states which has also caused the Euro to weaken. In today’s report we’ll take a look at what has been happening, and whether the rate could go even higher in the coming months. 

Sterling/Euro for the last 7 days: 

UK data impresses and lifts Sterling high 

Of late we have seen strong UK economic data that has served to strengthen Sterling. Better than expected UK manufacturing data this morning helped, which follows on from very robust private sector surveys last week. Manufacturing, construction and services sectors all came in ahead of forecasts in recent days. Also, an economic think tank said Britain's economy was on track for its strongest growth in nearly 10 years in 2015, all of which has lent support to the Pound and helped it gain against other currencies. 

Attention will now shift to Thursday's Bank of England inflation report, in which we are likely to see updated growth and inflation forecasts, and will also help determine when interest rates will go up in the UK. However, those hoping the Pound will continue to strengthen should be cautions, as the upcoming election in May will likely create much uncertainty in the market and could well weaken the Pound brining exchange rates back down. 

Euro remains weak over Greek Euro exit fears 

David Cameron today held a meeting to discuss the possible impact on the UK of possible Greek exit from the Eurozone. 

There was agreement that the probability of Greece adopting a new currency had increased, however I still think that there will be an agreement between Greece and other EU governments to keep Greece in the single currency. 

While uncertainty persists however, the Euro is likely to remain weak and that’s keeping GBP/EUR levels at 7 year highs of €1.35. Read more about what's happening in Greece here on the BBC website. 

US Jobs data continues to impress, giving the USD strength and weakening Euro further 

Last week figures showed that the USA created 257,000 jobs last month, which was much higher than forecast. Furthermore, the number of jobs created in November and December was revised sharply higher. This means that last month was the 11th in a row in which more than 200,000 jobs were created, which is the best in over 20 years. 

The effect on the currency markets was US Dollar strength which caused GBP/USD to fall. This also meant capital flows out of the Euro into the US Dollar, which weakened the Euro and helped the GBP/EUR rate to rise. 

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GBP/EUR drops, GBP/AUD rises, GBP/USD rises - exchange rates 2015

Tuesday 3rd February 2015

GBP/EUR falls into the €1.31’s 

I mentioned in yesterday’s post that the Sterling/Euro rate could be on the way down, and it’s happening quicker than expected. Today we have seen the rate fall a further cent bringing the mid-market level down into the €1.31’s. So, why has the Pound/Euro rate fallen? 

It’s to do with Greece. One of the reasons the rate has risen so well was fears the Greeks could exit the Euro after their recent election was won by the new Greek government, led by the left-wing Syriza party. Today, it seems they have now stopped calling for their debts to be written off, and instead are now proposing the standoff with its official creditors by swapping the debt for new growth-linked bonds. This has been taken as positive news for the Eurozone, and accordingly the Euro has gained strength, pulling rates lower. 

It is impossible to predict of course if the drop will continue, but if the ECB’s Quantitative Easing measures have the desired effect, we could see more Euro strength. Also consider that it’s now forecast that UK interest rates won’t go up until August 2016, so it’s hard to see where any Sterling strength will materialise from. 

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GBP/AUD rises to highest in over 5 years 

The RBA last night surprised the markets and cut the Australian interest rate by a quarter of a percentage point. This weakened the Australian Dollar, pushing rates to nearly $1.97 before selling back around the $1.95/$1.96 mark. This is now the best buying level in 5 and a half years, and you can see from the chart below the immediate spike when the announcement was made. 

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GBP/USD rises to $1.51 

This currency pair had recently been testing the $1.50 support level, but a host of poor economic data from the states today has weakened the Dollar, pushing rates a cent higher to $1.51. However as the US are likely to be the first western economy to raise interest rates, we could well still see the rate drop into the $1.40’s. 

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How could General Election affect exchange rates?

Friday 9th January 2015 
Where do things stand with exchange rates? Pound/Euro is hovering around its comfortable level of €1.28 and Pound/Dollar has stopped falling, for now, and sits around $1.5150. Against other major currencies Sterling is actually quite weak have fallen against most currencies. It’s only weakness in the Euro that’s keeping GBP/EUR supported at the current near 6 year high. 

The Pound could struggle this year for several reasons which I’ll look at today. Remember that if you want to achieve the best exchange rates, click here to send me a free enquiry, get a quote, and find out more about the commercial exchange rates I can offer.

• How General Election could affect Sterling exchange rates 
• When will interest rate go up, and will the change Pound/Euro 
• QE in Europe and will this make GBP/EUR rates go up 
• Pound/Dollar will it drop below $1.50 

Election uncertainty could weaken the Pound 

Political uncertainty is one key thing that can weaken a currency, and this year’s election is one of the most uncertain in a generation. Whatever happens it’s going to be very rare indeed. There has only been 2 occasions in the ‘50s when a government in power for more than a few years has increased its share of the vote, and Cameron needs exactly this to win. For Miliband to come back after Labours defeat last time and win a majority has only happened 3 times in the last 100 years, so that’s also unlikely. The 3rd option is a coalition; the last time that happened on two consecutive occasions was over 100 years ago. So any of the possible outcomes will be almost unprecedented. 

This means Sterling could come under pressure this year and fail to move higher, and could keep exchange rates in check. 

Interest Rates may not rise this year 

The Bank of England again kept interest rates at 0.5% yesterday, and a rise in interest rates in 2015 is looking less and less likely, after inflation levels have fallen recently. Last year there was much speculation rates would be going up, but it now seems the UK’s recovery has proved less robust than hoped, so hopes of a rate rise seem to have evapourated. HSBC for example have now pushed back its forecast for the next rate hike to 2016 due to political uncertainty, weaker inflation and an economic slowdown. 

So this along with the election is also likely to keep the Pound from rising. 

ECB closer to doing Quantitative Easing 

One thing that could move GBP/EUR higher however is the EU that could be soon embarking on a QE programme. They have miserable growth and little improvement is on the horizon and doing nothing is not an option. The ECB president is dropping stronger and stronger hints that they will embark on a stimulus programme. Nobody knows if it will work, but three countries that have embarked on it in the past (UK, USA & Japan) all saw their currency weaken. This is partly priced into the value of the Euro and is the one thing that is stopping Pound/Euro dropping away. 

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Pound/Dollar rate stops falling, for now 

The sharp decline in GBP/USD has also been halted. The rate dropped into the $1.50’s but has now recovered back to $1.5150. however due to the reasons above, and the fact the United States are likely to push up their interest rates soon, it could drop below the $1.50 mark later this year. 

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Pound/Euro forecasted to hit €1.54. Or €1.12. Who's right?

Friday 21st November 2014 
The Euro has weakened again today, pushing the Pound/Euro rate up from €1.25 to €1.26, marking the end of a topsy-turvy week in which was saw GBP/EUR climb 2 cents, recovering half of last week’s losses. In today's post, I'll explain the jump in the rate, and also have a look at a forecast that Pound/Euro will hit €1.54. Or €1.12, depending who you believe. Let's start with today's movements :

Why has the Pound/Euro rate gone up?

It’s nothing to do with Sterling, and all to do with the Euro. This morning the ECB president gave a speech and his comments caused the Euro to weaken and become cheaper to buy. So what exactly did he say? 

“We will do what we must to raise inflation and inflation expectations as fast as possible, as our price-stability mandate requires,” adding that some inflation expectations “have been declining to levels that I would deem excessively low,”. 

With the next ECB policy meeting only a few weeks from now, and the EU economy facing a period of stagnation, he may make further comments that show the markets that he is committed to reigniting growth and inflation. 

This is a clear signal that the ECB may embark on unconventional methods such as Quantitative Easing to help the economy. This caused the Euro to weaken and that’s the reason for today’s upward swing.

Will the Pound go up or down against the Euro ?

So what next for Pound/Euro rates? In the last few weeks we’ve seen the currency pair trading in a range from €1.24 to €1.28, and currently we’re slap bang in the middle of that range. I personally can’t see it going too much higher, but just to illustrate that nobody can predict the way exchange rates can move, consider these two differing forecasts...
 
The Pound is to climb relentlessly against the euro over the next three years and will reach levels last seen at the turn of the century, according to new forecasts by Goldman Sachs. They are predicting that rates will reach €1.54 within a few years. I find that hard to believe! In the 10 years I have been working as a Currency Broker, I have seen highs of €1.55 and lows of €1.01, but the current level of a little under €1.30 is a more realistic value in my opinion. Moreover, such a dramatic rise in sterling cannot easily be justified by the underlying weakness of the British economy, which already has the worst current account deficit in the developed world. It was running at 5.2pc of GDP in the second quarter. 

The IMF have a totally different view, stating that they think the Pound is up to 10% overvalued, which could mean a correction in the GBP/EUR rate down to €1.12. Again I think such a drop is highly unlikely. 

So Pound/Euro could rise to €1.54. Or fall to €1.12. Clear as mud. 

What the two differing forecasts show is the total uncertainty over which way the rate will move into next year. So whether you are buying Euros, or have Euros to convert back to Pounds, it’s understandably very difficult to know when to fix a rate, given nobody really has any clear idea about the direction the currency pair will take. 

That’s where I can help you. While predicting the market is impossible, having a good currency broker with a sound knowledge of the markets can save you thousands of Pounds. Part of this is arming yourself with the knowledge to make an informed choice on when to fix a rate. The other part is using tools to your advantage, such as Forward contracts, Stop Loss and Limit Orders to make sure you don't lose out unnecessarily. In this way you can employ a sound strategy with regards to when to convert your funds, and take some control over what is a very unpredictable currency market.

The worst thing you can do is just sit back and hope the exchange rate moves in your favour. Hope is not a reliable economic tool. If you need to convert currency, perhaps for buying or selling property abroad or for business purposes, then get in touch with me today for a free consultation on how I can help you. A can discuss your requirement, discuss the currency pair you are converting, and explain the different options you can consider to help you make the most of your currency. When you decide to fix a rate, I can source you an exchange rate up to 5% better than banks and other brokers. 

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