Sterling continues to fall against the Euro

Wednesday 26th August 2015
Following ‘Black Monday’ there continues to be volatility with Sterling exchange rates. Looking at Sterling/Euro in particular, the recent 8 year highs of €1.44 are now a distant memory. Rates have plunged in the last few weeks, and despite recovering a little yesterday, it fell again last night at is now stable around the €1.36 level as you can see from the chart below:

Further volatility expected on currency markets 

This all began Monday when a global rout in the stock markets was prompted by a huge share sell off in China. Fears of a global slowdown intensified in recent days after China devalued its currency and data pointed to further signs of weakness, triggering volatility in global stock and currency markets. 

Interest Rates 

China cut its interest rates this week in an effort to avert disaster, and investors are now questioning whether the Federal Reserve in the USA and the Bank of England in the UK can change interest rates. Much of the Pound’s strength in recent months was on expectations interest rates would rise later this year. Even the recent Bank of England inflation report gave investors’ confidence rates would rise within 6 months, boosting the value of Sterling. However with the latest global developments, it’s now likely to be late next year, or even 2017 before rates rise from their current 0.5%. As a result the Pound has weakened. 

Experts expect market volatility to continue until at least next month when the USA decides what to do on interest rates. Just a few weeks ago, most thought they would raise their interest rate, but now it’s more likely up to a year away. 

Safe Haven Currencies 

An unlikely benefactor of the recent turmoil has been the Euro. Now that Greece is out of the news following an agreement to provide an €86bn bailout, the Euro has gained strength as I had predicted it would do for some time. Their stimulus programme seems to be working, and actually the EU economy is looking more and more robust. This has meant that due to the global turmoil, investors view the single currency as a safe place to park their funds while avoiding stock market turmoil and this strength is also a factor in the GBP/EUR rate falling away sharply. 

Do you have a currency transaction to perform? 

If you have a foreign exchange need in the next 6 months, then the current volatility should be of concern and you should take steps explore all the options available to you. You can get in touch with me by clicking here, to get a quote and find out about how you can protect yourself against adverse market movements. 

Whether you are buying or selling property abroad, a business that deals in foreign currencies, or simply need to top up a foreign bank account, I can help. I have been a currency broker helping private and business clients get better rates than their banks or existing brokers offer for more than 10 years. 

Get in touch today for free, have a brief chat, and get a quote on your exchange to see how much you could save. 

Alastair Archbold

Why has Pound/Euro dropped to €1.39?

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

Pound/Euro drops to €1.39 

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

What has caused Pound/Euro rates to fall? 

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

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

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

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

Do you need to convert currency at the best rates? 

Exchange rates can move very quickly, and having an expert currency broker on your side can make a huge difference. From exchange rates up to 5% better than the banks, free consultations to discuss your currency requirement and strategy, to various contract types to help protect against adverse exchange rate movements, there are many positives to getting in touch to see how I can help you. 

The first step is to send across an enquiry, and I can then personally get in touch to discuss your requirements, explain how the service works, and provide you a quotation on your rate of exchange. 

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Pound/Euro rises after ECB press conference

Thursday 6th November 2014 
The Sterling/Euro exchange rate has rocketed today, following comments by the European Central Bank (ECB) president Mario Draghi, as I predicted could well happen in my post earlier this week.

Central Bank Decisions and the Pound/Euro exchange rate 

Both the UK and EU central bank announced their latest decisions on interest rates today. There were no surprises, with both keeping their benchmark rates on hold. However after the EU decision, the president of the European Central Bank (ECB), Mario Draghi, said in a press conference that the bank stands ready to give the Eurozone further economic stimulus "should it become necessary". Mr Draghi said: "Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate." 

Markets have taken this as a negative sign for the Eurozone, and the Euro weakened accordingly. As you can see form the chart below, there was a significant spike of around 1 cent, bringing the GBP/EUR rate to within a cent or so of the highest it’s been in 6 years. 

What next for Pound/Euro? 

To me the trend is just repeating itself. Many times over the last few months we have seen rates reach this level, before dipping back off again. Without anything on the horizon likely to strengthen the Pound, I think there is a good chance we could see the rate drop back again. If you need to buy Euros, I would consider locking in a rate now while it’s so good. You can fix the current rate for up to 2 years and only lodge 10% of what you want to convert. 

Euro sellers have a tougher decision. Longer term forecasts suggest the rate getting to €1.30, but short term you could see moves in your favour. If you need to buy or sell Euros, or indeed any international currency then click below to make a free enquiry on the rates I can source for you. I can help with bank to bank transfers from amounts from £5k to £5m. I’m afraid I cannot help with cash or holiday funds. 

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Will Pound go up or down for rest of 2014?

Tuesday 23rd September 2014 
As I write today’s post Ed Miliband is giving a party conference speech. I’m choosing this time to write my report as I don’t think his words will have any effect on exchange rates whatsoever, and the currency markets will also be taking little interest in his comments. It is likely however that with the Scottish referendum now out of the way, political uncertainty ahead of next year’s General Election will start to affect the Pound. In today's post I'll give my views on what could move exchange rates for the rest of the year.

The currency markets don’t like uncertainty, and I think that is keeping the Pound in check from going any higher. Following last week’s spike in the Pound, exchange rates now seem settled at around €1.27 vs the Euro and $1.6350 against the US Dollar. 

One example of the uncertainty relating to the UK economy, is possible constitutional changes in the United Kingdom following the Scottish referendum. This could affect investment into the UK and so weaken the Pound off slightly. This combined with the upcoming election is likely to keep the Pound from gaining significantly. 

What could affect exchange rates this week?

The only thing I can see this week that could affect the Pound is a speech by the Bank of England (BoE) governor Mark Carney on Thursday. He hasn’t exactly been consistent in his comments on when interest rates will go up in the UK, so the markets will be watching for any comments he may make. Any hint of a rate rise then the Pound could strengthen, if he is dovish however and hints rates are set to remain on hold for some time, we could well see Sterling exchange rates drop away. 

All in all, I think those that need to convert Pounds to another currency should consider taking the rate while it’s close to a multi-year high. Even if you don’t need your currency for some time, you can fix today’s rates for up to 2 years by lodging 10% of the total you need to convert. 

What if I'm converting Euros back to Pounds?

One thing that could affect things if you are converting Euros to Pounds however, is the chance of further stimulus by Europe. If the European Central Bank decide on further drastic measures to try and boost the economy, the Euro could weaken pushing Pound/Euro rates up. 

Below I will list the other things I think could change exchange rates this week. Remember that if you need to convert currency, perhaps for a property abroad for example, you can get in touch with me for a quote by clicking here. I can source excellent exchange rates very close to the ‘mid-market’ level and you could save thousands of Pounds by getting a slightly better rate. 

Click here to send me a free enquiry and obtain a quote 

This week’s remaining economic data that could affect exchange rates 

Wednesday 24th September – Quite today in terms of economic data releases. We have some Business Climate and sentiment measures from Germany that could affect Pound/Euro. In the states we have information on mortgage approvals and home sales that could affect Pound/US Dollar. 

Thursday 25th September – The only real UK data of note today is a speech by Bank of England (BoE) governor Mark Carney. He hasn’t exactly been consistent in his comments on when interest rates will go up in the UK, so the markets will be watching for any comments he may make. Any hint of a rate rise then the Pound could strengthen, if he is dovish however and hints rates are set to remain on hold for some time, we could well see Sterling exchange rates drop away. 

Friday 25th September – Another quiet day with the only thing likely to move Pound/Euro rates being a consumer confidence survey from Germany. All other data is from the USA – GDP figures, consumption and expenditure, and a consumer sentiment index. All of this could affect GBP/USD rates. 

If you want the best exchange rates, send me a free enquiry by clicking here.

Will the Pound go back up against the Euro 2014?

Monday 10th February 2014 
Good afternoon. It’s been a very quiet start to the week, with no significant data releases, and so exchange rates haven’t varied much today. 

Sterling/Euro remains a little above €1.20 and Pound/Dollar sits at $1.64. Other currencies such as the Australian Dollar (AUD), New Zealand Dollar (NZD), and South African Rand (ZAR) etc. are still very cheap to buy, following a weakening of many of the world’s emerging economies.

This week will be key for how the Pound/Euro rate in particular performs over the coming weeks and months, as we have key data from the Bank of England (BoE) and European Central Bank (ECB). 

Below I have listed all this week’s data that I think will have an effect on exchange rate. To discuss your particular currency requirement, and how economic data could affect your rate, click below to send me a free enquiry. I can explain the options, discuss which way the market may go, and provide you a quote that could be up to 5% better than your bank or existing broker will offer you. 

Click here to make a free enquiry now. 

This weeks economic data releases that could affect exchange rates

Monday 10th February 2014 

It has been very quiet today, with the only release of note Investor confidence data from the Eurozone. Despite this being a little better than expected, it hasn’t had any effect on exchange rates. 

Tuesday 11th February 2014 

Today will probably also be quite quiet as there are no EU or UK releases of any interest. Over in the USA however, we have a speech by the new FED chief Janet Yellen. It will be interesting to see if her approach differs from her predecessor, and any hints on what direction she will take with the economy could be reflected in GBP/USD rates 

Wednesday 12th February 2014 

I think today is the most important of the week for exchange rates. In the UK we will see the Bank of England governor Mark Carney deliver the BoE’s quarterly inflation report. The recent strength of the Pound has been on the back of good data increasing the chance of an interest rate hike. I think he will use his speech to clarify their ‘Forward Guidance’ policy. If he hints rates will not rise soon, expect the Pound to fall in value. 

We also have the ECB president giving a speech at 15:30pm, and again his comments on inflation and interest rates could change the value of the Euro. So all in all it’s likely to be quite a volatile day for Sterling/Euro rates. 

Thursday 13th February 2014 

Today is quiet in the UK, but we do have some important data from elsewhere. The ECB releases its monthly report, and Germany has a raft of inflation numbers. In Australia, we have the latest unemployment figures that could affect GBP/AUD. 

Over in the states at lunchtime we also have Jobless numbers, along with their latest Retail Sales numbers and another speech by FED chief Janet Yellen. 

Friday 14th February 2014 

Europe releases GDP figures for Germany, France and the EU as a whole today. This will give investors a good idea how the economy is faring, so bad news could cause the Euro to weaken. We end the week with Industrial Manufacturing data from the United States. 

Getting the Best Exchange Rates 

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