Pound falls on low inflation numbers

Tuesday 18th February 2014
We have seen Sterling lose ground today after lower than expected inflation numbers were released this morning. As you can see from the chart below, GBP/EUR rates slipped around 0.5% but levels remain in the mid €1.21's.

So why exactly does lower inflation cause the exchange rate to drop?

The UK's inflation rate, as measured by the consumer prices index, fell to 1.9% in January. The rate fell below the Bank of England's 2% target for the first time in more than four years. While this is good for business's and individual consumers, it's not good news for Sterling, and this is to do with interest rates. 

The fall is likely to underline the Bank of England's message that there is no rush to raise interest rates, as they would usually only do this to combat high inflation. So as the number was lower than expected, analysts believe this has pushed a rate hike further into the future. It has been the speculation of higher interest rates that has been the main reason for the recent rise in rates, so as the data changes, as does the value of the Pound. The net result is Sterling having lower value and rates falling. 

Is this a temporary drop? Will rates go back up again?

Tomorrow is a very important day for the Pound, and will likely have a big impact on where exchange rates go in the coming weeks. 

At 09:30am tomorrow we will see the latest UK Unemployment figures. The number will probably be just above 7%, but if it's lower than this the Pound may regain some of today's losses. 

Also at 09:30am we see the Bank of England minutes, which show the vote and what was discussed a few weeks ago when they left rates and QE on hold. These will be of importance because if the votes and comments show they discussed raising rates, the Pound may rise. 

Of course if unemployment is 7.1% of higher, or of the BoE minutes show a consensus rates don't need to go up, then expect the Pound to lose more value and rates to drop further. 

Exchange rates at multi-year highs

In my recent post I outlined some major currency pairs and how good exchange rates are at the moment. It seems the recent trend of a spike in rates followed by a drop is continuing, so if you need the best exchange rates, why not get in touch to discuss your requirements.

I can explain what is moving the rate, provide you a quote to compare with your existing bank or broker, and you can make sure you are getting the best possible rate. 

It costs nothing to make an enquiry, carries no obligation, and the savings can be considerable. 

Click here to send me a free no obligation enquiry. 

I look forward to hearing from you.

Alastair Archbold

This week's economic data releases

Monday 18th November 2013
It's been a quiet start to the week, with no major economic data releases. Despite this, Sterling has fallen a little throughout trading today to around €1.1900 vs the Euro and $1.6100 vs the US Dollar, however the Pound does remain strong overall relative to where it has been of late.

So, in today's report I'm going to list all of this weeks economic data that can affect exchange rates. Regular readers will know I often give my opinion on major releases, and the effect that I think they will have on exchange rates. Knowing things like this are invaluable when deciding to fix your exchange rate.

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This weeks economic data releases and how they may affect exchange rates

Monday - Today has been very quiet, with only EU Trade Balance figures that were as forecast, so had no real impact on exchange rates. 

Tuesday - The most important number today is Germany's ZEW Economic Sentiment survey at 10am. This is a leading indicator of the German economy, and as Germany is the largest economic in the EU it can have a big impact. 

The forecast result is 54.6 - any higher than this would make GBP/EUR rates fall and vice versa. Elsewhere we have Speeches by FED members that could affect GBP/USD rates. 

Wednesday - The most important day for GBP/EUR rates in my opinion. Firstly at 09:30am we have the Bank of England minutes. These show how members voted 2 weeks ago when they decided to leave Quantitative Easing and Interest Rates on hold. 

It's important as it also shows the discussions and differences of view, and so give an idea which way future decisions may go. Pound/Dollar could move around today also, as we have some key Inflation data from the States in addition to Retail Sales. 

Thursday - An important day for the value of the Euro. we have inflation, consumer confidence, manufacturing and borrowing data for France, Germany and the EU as a whole. As usual, higher than expected numbers will strengthen the Euro and pull GBP?EUR rates lower. Lower than expected figures would have the opposite effect. 

Elsewhere, the UK has Public Sector Borrowing figures, and the USA has a host of Unemployment numbers and Inflation data.

Friday - A quiet end to the week, with nothing of note from the UK. We have Germany Business Climate numbers at 9am, followed by Italian Retail Sales (A good barometer of their economy as a whole).

So there we have it, all of the above will be the main events that drive exchange rates this week. 

What does this actually mean for the currency you need to buy or sell?

This of course depends on which currency you are buying or selling, and the timescales you are working to. 

• Would you like to discuss which way exchange rates are going?
• Do you need the very best exchange rates?
• Need help deciding when to fix your rate?
• Sick of poor rates and charges from your bank or existing broker?

Then make a free enquiry with me today. It's free, it doesn't put you under any obligation, and simply means you can find our more about the rates and service that I offer. 

I can source exchange rates that are commercial, and up to 5% better than banks can offer. In addition to the rates and service I provide, I have over 10 years experience in the Foreign Exchange markets, so why not take advantage of my knowledge and expertise and click below to send me a free enquiry today.

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I look forward to hearing from you.

Alastair Archbold

Sterling up after BoE Report and Unemployment Data

Wednesday 13th November 2013 
The Pound has had a topsy turvy week so far. Yesterday we had some inflation data that weakened the Sterling, pulling exchange rates down from the highs we saw at the end of last week. The dip was temporary however, as today we have had some better than expected Unemployment figures, along with a positive report from the Bank of England that has pushed the Pound higher. 

UK Unemployment & The Bank of England Report

Figures released this morning by the Office for National Statistics show that the number of unemployed people in the UK fell by 48,000 to 2.47 million between July and September. The unemployment rate fell to 7.6%, the lowest rate in more than three years. 

The figures will be taken as an indication that the UK economy, which grew 0.8% in the third quarter, is continuing to recover. The news gave the Pound a boost, and caused exchange rates to rise slightly. 

This was followed at 10.30am this morning by the Bank of England Quarterly inflation report. Bank of England governor Mark Carney says the UK recovery has "taken hold" and unemployment will fall sooner than it had forecast. 

The report said: "In the United Kingdom, recovery has finally taken hold. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand." 

This compounded the strength for Sterling and pushed rates higher still. As you can see from the chart below, it’s clear the immediate effect the data releases had on exchange rates, with Pound/Euro rates now settled just below €1.19. 

If you want the best exchange rates click here.

Tomorrow is another key day for GBP/EUR rates 

After lots of UK data so far this week, tomorrow it’s Europe’s turn. We have preliminary GDP figures for Germany, France and Italy showing if their economies are growing. We also have a monthly statement from the European Central Bank. Also of importance will be the UK’s Retail Sales numbers at 09.30am, as these are a good indicator of economic activity as a whole. 

Looking for excellent exchange rates? 

You may be surprised how much you could save by making an enquiry with me. The rates I source are up to 5% better than banks can offer, and coupled with the expert knowledge I have of the currency markets, I can discuss your options and help you to decide when to fix your rate. 

Whether you need to convert Pound s to Euros or any other currency, or convert a foreign currency back to Sterling, I can help you. 

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

I look forward to hearing from you.

Alastair Archbold

Pound/Euro rates €1.19, close to best all year

Tuesday 5th November 2013
Good afternoon. We have seen Sterling continue to strengthen this week, and exchange rates are now very close to the best they have been all year. The main reason for the increase is the strongest services sector growth since 1997. 

In today’s report I’ll look at the reasons for the gains in detail, have a look at some other important data releases due this week, and also my view on the forecast for Sterling exchange rates for the remainder of 2013. So in today’s report:

• UK Services sector growth pushes Pound higher
• Eurozone continues to slow, weakening the Euro
• EU Commission however predicts Euro could gain strength
• Forecast for Pound/Euro rates for 2013
• This week’s economic data release that could affect rates

UK Services sector growth pushes Pound higher

This morning we saw figures that show activity in the UK services sector last month increased at its fastest rate in 16 years. The news has caused the Pound to surge in value against other currencies, breaking through the €1.19 level against the Euro, close to the highest it has been all year.

The numbers showed that the PMI services index rose to 62.5 in October from 60.3 in September, beating forecasts of 59.8.  The reading signals that the UK economy is firmly on track to recovery, and could lead to the Bank of England revising up its quarterly growth forecasts.

Alongside strong activity in manufacturing and construction, the results indicated quarterly economic growth of 1.3%, up from 0.8% between July and September this year.

The gains today follow a rise in rates we saw towards the end of last week after we saw poor economic numbers from the Eurozone. Last week the GBP/EUR mid-market rate was in the mid 1.16’s, so we’ve seen the exchange rate rise over 2% in just a few days. 

Want the best Pound/Euro rates? Click here.

Eurozone continues to slow, weakening the Euro

Another reason for the gains in the last few days is the Euro weakening. The single currency fell to a one-month low against sterling today, amid speculation the European Central Bank may signal easier monetary policy or even cut rates this Thursday.

After data last week showed a sharp drop in euro zone inflation, some in markets expect the ECB to cut borrowing costs on Thursday, or at least lay the ground for a move. I mentioned this in my last post, and further weak EU data could increase the chance of this happening. It is this speculation of a rate cut that is being priced in to exchange rates now, and caused GBP/EUR to go up.

EU Commission however predicts Euro could gain strength

Despite the facts of the last few days, according to the European Commission, the euro will appreciate at a record pace this year and continue to gain in value in 2014. If what they are predicting holds true, then it could mean the recent gains in GBP/EUR rates will be short lived, as a stronger Euro would be more expensive to buy and would therefore cause exchange rates to fall away.

The Commission cautioning that it sees the single currency making further gains should be noted however as it could reverse the current trend.

Forecast for Pound/Euro rates for 2013 

So what everyone wants to know is will the rate continue to go higher, or will it be short lived and come back down again? I should first point out that nobody can predict which way exchange rates will move. 

I have worked in the industry for over 10 years however, and while I can’t forecast rates into the future, I can explain what is moving the rate, and what I think may happen in the coming weeks and months. So below I will outline some possible scenarios for you to consider. The examples below are for Euros, but we do trade all major currencies so get in touch today to discuss your specific requirements. 

Click here to discuss your currency requirements in detail.

If you are buying Euros 

Rates are very close to an all year high. I personally would do one of 2 things: If I thought the rate was as good as it’s going to get, then I would fix the rate now with a Forward contract. This means you can lock in the current rate for up to 2 years, and only lodge 10% of what you want to convert now. 

You send the remaining 90% when you want your currency delivered. This strategy allows you to budget effectively, and protects against the rate moving against you.

If I thought the rate would go higher, then I would place a ‘Stop Loss’ order. This means if the rate falls below a pre-agreed level, your currency is secured. If the rate continues to rise however, then you can take advantage of any gains. This gives you a worst case scenario should the market drop.

Personally we might see rates rise another point or so at best, but any good news from Europe could quickly wipe out the gains. I would give serious consideration to fixing rates now while they’re so good. Remember; holding out for an inch could mean losing a yard.

Click here for for Pound/Euro quote

If you are selling Euros

You will have seen the rate move significantly against you and may be worried if this will continue. If I were selling Euros, I would also use a Stop Loss order. I would place this at a level a few points above where the market currently is. In this way you’re limiting your losses should the current trend continue.

If we see rates start to drop back again however, as the European Commission seem to think they will, then you can take advantage.


Get in touch to discuss your requirements in detail
 
The above are only a few examples to show the type of strategies you can employ by taking advantage of the type of contracts we offer. Everyone’s individual requirement will of course be very different, in terms of currencies, volumes and timescales.

Click here to send me a free no obligation enquiry today, and I can get in touch to discuss your currency needs in detail. In this way you can gather all the information necessary to decide what to do. When you decide to fix your rate, you will find that our rates are up to 5% better than banks can offer, so fill in the enquiry form now to find out more.

This week’s economic data release that could affect rates

As I pointed out in a recent post, economic data releases can have a huge impact on exchange rates, and that’s exactly what has been the case in the last few days as I’ve outlined above.

So what have we got this week?  

Wednesday - we have manufacturing numbers from the UK in addition to a GDP estimate. Both will be a crucial indicator of growth so expect it to affect the Pound. We also have a host of data from the EU, that if poor could weaken the Euro further.

Thursday – Interest rate decision from the UK and EU today. No change expected for the UK, but an outside chance of a rate cut from the ECB. Also watch for the press conference after the decision – if they don’t cut rates, they may hint they will soon, which would have the same effect. Elsewhere we have unemployment numbers from the USA.

Friday – we end the week with Trade Balance figures from the UK, France and Germany. Over in the USA we have the latest non-farm payroll numbers. These are usually very different than forecast, so expect a choppy day for GBP/USD rates. 

Make a free enquiry with my by clicking here. 

I look forward to hearing from you.

Alastair Archbold

Why has the Pound stopped rising against the Euro?

Wednesday 23^rd October 2013

Good afternoon. Sterling remains a little weak against other major currencies, and is in the low €1.17’s against the Euro. This is mainly due to the single currency gaining strength due to more optimism, and effects of the US government shutdown. So what have I got for you in today’s report?

• Bank of England minutes unsurprising
• UK Interest Rates could rise sooner than thought
• Euro gains strength pushing GBP/EUR rates lower
• Spain finally exits recession
• The types of FX contract I offer

Bank of England minutes unsurprising

This morning the latest MPC minutes from the Bank of England (BoE) were released. They showed that the MPC voted unanimously to keep interest rates on hold at 0.5%, and the Quantitative Easing (QE) programme unchanged. This was all as expected and so had no real effect on exchange rates.

What was interesting was the positivity we saw from the BoE. They showed that UK unemployment and economic output are improving at a faster pace than expected, and also that bu0siness and consumer confidence have continued to grow. However, policymakers were divided about how fast productivity would pick up, and by extension, how fast unemployment would fall as the economy recovers.

This is important as they have already indicated interest rates may start to rise once unemployment falls below 7%. It’s currently at 7.7%, so if things keep improving we may see interest rates start to rise as soon as 2014. This is a long way off, but when rates start to rise it should give the Pound some strength.

What’s keeping exchange rates below the €1.20 mark however is Euro strength, and also the fact that it’s not in the UK’s interest to have exchange rates much higher than they are, due to the fact it would make our exports more expensive, so should rates start to rise again, I would not be surprised to see the BoE try to devalue the Pound to keep things in check.

Euro gains strength pushing GBP/EUR rates lower

Another reason for the Pound/Euro rate not forecast to go that much higher is renewed optimism surrounding the EU economy. Things are looking up in the Eurozone, and as a result the Euro has gained strength and become more expensive to buy.

For example, Spain'seconomy has emerged from recession after growing for the first time in more than two years, according to estimates from the Bank of Spain. Spain's economy has been struggling ever since the credit crisis struck in 2008, and has been one of the worst hit by the fallout from the credit crisis. It burst the country's housing bubble, and has needed bailouts to survive after being left holding hundreds of billions of euros in bad debts. Its unemployment rate of more than 26% is one of the highest in Europe.

Also giving the Euro strength is events in the USA. Now that the US debtceiling has been raised, investors that were holding US Dollars due to its safe haven status, have been selling Dollars and moving in to Euros. This has weakened the Pound a little and strengthened the single currency, keeping GBP/EUR rates in check. 

Click here if you are looking for the best exchange rates. 

On the 3 month chart below, you can see how the rate has leveled off in recent weeks. 

 

 The types of FX contract I offer

I write this blog to keep people up to speed with what is happening to exchange rates. You can make a free enquiry with me here to find out more about the service I offer. 

In a nutshell, I can source exchange rates that are up to 5% better than banks can offer, so if you need to buy or sell foreign currency you could save thousands. Click here to make a free enquiry. Below outlines the type of contracts I offer:

Spot Contract

The most common and popular contract. Fix a rate on the phone, settle your currency to use within 2 working days, and we then forward your currency to the account it needs to go to. All at fantastic commercial exchange rates with 0% commission.  

 

Forward Contract

The Forward Contract can help you take advantage of current exchange rates. You can fix the price now for up to 2 years. Within 2 days of fixing your rate, you lodge 10% of the total value of your transaction. You can then pay the remainder, in part or in full, by the end of the contract. This guarantees your rate, protects you against rates dropping, and allows you to budget. Very useful if you are buying overseas and have some time between paying your deposit and settling the balance.

Limit Order

Aiming for a rate higher than the current level? This is for you. With a Limit Order you specify the exchange rate you are hoping to achieve, and your currency will automatically be purchased if the market exceeds this level and you'll get the rate you wanted. This type of contract is particularly useful when the markets are moving in a positive direction for you.

Stop Loss Order

This is the opposite of a Limit Order. You would instruct me to buy if the currency goes down to a pre-determined level. When combined with a Limit Order you can hold out for a better exchange rate and still protect yourself from a sudden fall in the market. This gives you a worst case scenario and a safety net should the market move against you.

Want to find out more?

Click here to send me a free enquiry now.

When you get in touch, ask for Alastair Archbold and quote ref AJA. I can then have a brief chat regarding your requirements, explain the different options you have, and give you a quote so you can see how good our exchange rates are.

I look forward to hearing from you.

Alastair Archbold

Pound falls against Euro after poor economic data

Monday 14th October 2013 
Good afternoon all. Well what a difference a week can make! The change in the weather in the UK has been mirrored by a change in the fortunes of the Pound. In Britain we seem to have very quickly entered autumn, and as the leaves started falling, so did the Pound, after a raft of poor economic data. 

This has pulled exchange rates lower and away from the all year highs seen just recently. In today’s report I’ll look at what has happened to cause the fall, and what else may happen with exchange rates in the coming weeks and months: 

• UK Retail Sales drop 
• Industrial and Manufacturing production fall 
• Trade balance in the UK widens. 
• IMF warn world could enter recession again 

Poor economic figures cause the Pound to fall 

It’s only been a little over a week since my last post, and at that time the GBP/EUR rate and the GBP/USD rate were both around the highest we’ve seen all year. Things can change very quickly in the currency markets however, and that’s exactly what we’ve seen. 

In the last week we have seen some poor UK economic numbers. Industrial and Manufacturing production was worse than expected, coupled with lower than forecast Retail Sales. More worrying was the fact the UK’s trade deficit has widened, meaning we’re importing more and exporting less. All of this had the effect of weakening the Pound and bringing exchange rates into the €1.17’s against the Euro, and back to the $1.60 mark against the US Dollar. 



In recent posts I have pointed out that the market seemed to have peaked, and indeed that now seems to have held true. Those that booked their currency on a Forward contract will be pleased at buying at the peak and will have been protected against the drop we have seen. 

If you are buying or selling currency, the market is very volatile at the moment. Simply hoping the rate will move in your direction is no more than a gamble, and could end up costing you dearly. The best strategy is to get in touch and discuss all the options we can offer you. In this way you can have a detailed chat with me regarding what might move the exchange rate, and make an informed decision on what to do. 

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

Is the world about to be plunged back into recession? 

The head of the International Monetary Fund, Christine Lagarde, has warned that a US default could tip the world into recession, saying that a default would result in "massive disruption the world over". 

So what’s happening in the states? The US Treasury will start to run short of funds on Thursday if no agreement is reached for it to raise its debt limit. The president of the World Bank, Jim Yong Kim, has also expressed his concern over the situation. 

He warned that the United States is just "days away from a very dangerous moment" because of the government's borrowing crisis. 

He warned this could be a "disastrous event" for the world. To explain what has been happening, the US government has been in partial shutdown since Congress missed a 1 October deadline to pass a budget, with politicians being unable to agree funding for current spending. 

This has resulted in hundreds of thousands of federal employees being sent home and government offices closing. Republicans refused to approve the new budget unless President Obama agreed to delay or eliminate the funding of the healthcare reform law of 2010. 

On Saturday, Jamie Dimon, boss of the American bank JP Morgan said the possible repercussions did not bear thinking about. "You don't want to know what would happen," he said. "It would ripple through the world economy in a way that you couldn't possibly understand." 

What might this all mean for exchange rates? 

So we’re at a crossroads in terms of the global economic recovery at the moment, and this may well have serious implications for exchange rates. The value of one countries currency against another is usually finely balanced, and uncertainty in the global markets could seriously affect exchange rates. 

If you need to covert one currency to another, perhaps to buy property abroad or maybe you buy or sell goods in a foreign currency, exchange rates can have a big impact on your costs. 

How can you get the best rates and protect against adverse currency movements? 

The first step is to get in touch with me to discuss your options. As a specialist foreign exchange broker, the rates that I can achieve are significantly better than banks can offer, by as much as 5%. So if you need to convert funds then the savings can be considerable. In addition to our great rates, we also have expert market knowledge that can help you decide when to fix your rate. 

This combined with the various range of FX contracts we offer mean that you could save thousands of pounds on your exchange. 

Click here to send me a free enquiry now and find out more.

Pound falls after poor UK Retail Sales.

Thursday 19th September 2013
Good afternoon. Since my last post, we’ve seen quite a bit of volatility in the currency markets. I mentioned a few days ago that the markets had been flat, and that I predicted the Bank of England (BOE) minutes and UK Retail Sales would probably cause some movements in the value of the Pound/Euro rate, and indeed they did. We have also seen some news from the US Federal Reserve that has caused a big change in GBP/USD rates.

So let’s take a look at what’s been happening…

Bank of England minutes push the Pound higher

Yesterday we saw that the Bank of England has upgraded its growth forecast for the UK economy when they released the latest minutes from their Monetary Policy Committee. You can read the minutes here if you so wish!

The minutes show that third-quarter growth is expected to be 0.7%, up from 0.5%. The minutes also show that the MPC voted unanimously to keep interest rates and quantitative easing (QE) on hold this month.

It had a big impact on the value of the Pound, which rose against other currencies. Climbing to €1.1960 against the Euro – around the best it’s been all year. The gains were not to last however, as today’s UK Retail Sales news pulled the Pound down again. More on that in a moment.

US FED weakens the US Dollar significantly

Overnight, the US central bank unexpectedly said it would not begin scaling back its massive economic stimulus programme until the US economy had improved further. The bank also cut its growth forecast. So pretty much the exact opposite of what the Bank of England did.

The result was the opposite also – the Dollar weakened significantly, pushing the GBP/USD rates to as high as $1.6150 – the highest it’s been all year.

As with the Pound/Euro rate, the all year highs were short lived due to some poor UK economic news…

UK Retail Sales disappoint

This morning at 09:30am the latest UK retail sales numbers were released. Most analysts thought they would show a rise of 0.4%. Not to be – the actual figure showed a drop of 0.9% and this was a big surprise.
The currency markets don’t like surprises, and as Retail Sales are seen as an indicator of consumer confidence, and therefore the economy as a whole, the Pound lost quite a bit of value.


As you can see from today’s graph, the Pound fell as soon as the number was released, pulling GBP/EUR rates to €1.1860 and GBP/USD rates to $1.6090.

Getting the best exchange rates

I mentioned in my last post that rates seemed to have levelled off, and indeed it looks like recent highs may well have been a peak. The current buying levels are still very good however.

So if you need to convert Pounds to another currency, or convert a foreign currency back to Sterling, you should get in touch with me to find out the rates that I can offer.

I provide commercial rates of exchange to both private and corporate clients that are much better than banks can offer. Get in touch with me today to find out more.

• Want the best exchange rates?
• Keen to know if the rate may go up or down?
• Can't decide when to fix your exchange rate?
• Sick of getting poor rates and service from your bank?

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Will the Pound get higher against the Euro?

Tuesday 10th September 2013
Good afternoon. Since my post last week, the Pound continued to rise, however now seems to have hit the peak and we haven't seen further gains. In today's post I'll have a look at recent economic data, how it's affected exchange rates, and what to look out for in the next week that is likely to move the currency markets. In today's report:

• Pound fails to break through €1.19 level
• UK economy is turning the corner
• US jobs data disappoints, sending GBP/USD higher
• Upcoming data that might push rates higher or lower

Has Pound/Euro peaked or will it go higher? 

The last few months have been good for the Pound, with lots of good economic data giving Sterling strength, and help exchange rates recover close to where they were back in January. At the end of last week the GBP/EUR rate peaked at just over €1.19.

Since then things seem to have stabilised. We saw rates slip away to €1.18 yesterday, and today we have seen a mild recovery to €1.1850 against the Euro, and so the rise has ended. But does this mean it's the peak or will rates continue to climb to €1.20 and above?

Firstly let me say that nobody can predict the markets. If I could then I would be a billionaire and sat on my yacht rather than sat at my desk on the trading floor! What I can do however is explain what has moved the market, and the arguments for what could move the rate up or down in the coming weeks and months.

Want to discuss when to fix your rate?

Sterling is range-bound between 1.18 & 1.19

So, last week Sterling pulled back from a 4 month high against the euro on after some poor UK data releases. UK industrial output fell short of expectations and the trade deficit unexpectedly widened sharply. The figures mean that the recent consistently strong UK data has come to an end, and it has also led investors to bring forward expectations of when interest rates would rise.

Also last week the Bank of England made no new attempt to talk down borrowing costs and this means that rates could rise much sooner than the central bank has flagged, possibly as early as late 2014. By contrast, the European Central Bank said it was ready to lower interest rates. This has helped the Pound remain strong and the Euro weak. 

The UK economy is "turning a corner", Chancellor George Osborne has said in a speech in London. Mr Osborne cited "tentative signs of a balanced, broad based and sustainable recovery", but stressed it was still the "early stages" and "plenty of risks" remained.

Also helping the pound are recent surveys on UK manufacturing and services which indicate economic growth may accelerate in the second half of the year. So on paper the UK economy is looking good, so why isn't the Pound rising any more?

The currency markets move on rumour, and as the economy is expected to continue to recover, this is already priced in to the market, so even if we keep getting good data it's not going to much of a surprise, and the market now seems to have peaked and is unable to break through the €1.19 level.

If you are buying or selling Euros, find out about our rates by clicking here.

So if you are buying Euros, do you fix a rate now or wait?

Ultimately only you can make this decision. Given however that rates are close to the best they've been since the end of January, I think that holding out for a higher rate could easily mean you lose out on the current levels should we see the Pound weaken again. By hanging on, you could be holding out for an inch and risk losing a yard So if I needed Euros in the next 6 months I would do one of two things.

One option is to fix the rate now. It's a very good rate, and means you are taking advantage of the recent rise in the value of the Pound. Even if you don't need your Euros now, you can fix the rate for up to 2 years with a Forward contract, and only lodge 10% of your Sterling now, the remainder when you want the Euros transferred. 

The second option is a Stop Loss order. If you are hoping the rate will go higher, this allows you to do this but not risk losing out should the market move against you. This works by placing a lower level, 1.17 for example, and should the market drop below this we automatically buy your currency and fix your rate. 

In this way you can continue taking advantage of any gains, but have a 'worst case scenario' or safety net so you know the worst rate you will get should Sterling start to drop. 

Click here to send me a free enquiry if you need the best exchange rates. 

Pound/Dollar rates rise

In addition to the good UK data mentioned above, 2 other things have helped the Pound/Dollar rate rise. Firstly we had some poor US jobs data that has weakened the USD making it cheaper to buy.  

The mediocre jobs report may add fuel to the argument that the US economic recovery is not yet robust enough to sustain itself without the additional help of the Fed - more QE would mean the Dollar could weaken further. 

Also it now looks like military action in Syria may not happen, and if it does it's some way off. This has added some stability to the markets, oil and commodities have fallen, and investors have moved away from the safety of the Dollar and into riskier assets, all of which mean a higher GBP/USD rate. 

Economic data for the next week

If I was buying or selling currency in the next week, there are a few data releases I would be keeping an eye on:

Wednesday - We see UK jobs and unemployment data, which could affect the Pound depending on whether it's better or worse than expected. 

Thursday - UK inflation is released today, and because it can impact interest rates, it often affects exchange rates. Also today we have a speech by the ECB president Mario Draghi, and his comments often affect GBP/EUR rates. US unemployment data is also released today. 

Friday - US Retail sales and Inflationary measures may affect GBP/USD rates. 

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