Sterling/Euro exchange rate forecast

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

Sterling/Euro 

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

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

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

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

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

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

 

What else could move exchange rates this week? 

Tuesday 17th February 2015  

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

Wednesday 18th February 2015 

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

Thursday 19th February 2015 

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

Friday 20th February 2015 

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

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ECB key to GBP/EUR forecast for 2015

Tuesday 20th January 2015 
Pound/Euro rates have risen by a cent today, and at the time of writing GBP/EUR remains stable around the €1.31 level, which is the highest rate to buy Euros since March 2008: 

Will Pound/Euro rates climb or fall? 

We’ve seen a significant rise in rates in the last few weeks, pushing GBP/EUR in particular to the highest we’ve seen in 7 years. Being able to trade at levels above €1.30 is excellent news. The main question now is whether rates will drop back below this level, or perhaps even go higher still. 

The next few days will be key to this. Tomorrow we have a Bank of England decision on interest rates, and the latest Unemployment figures. I think both of these will be a non-event and won’t have much of an impact. 

Of much more significance will be Thursday’s announcement by the European Central Bank (ECB), when they’ll decide whether they will start a Quantitative Easing programme where funds will be created to spur an economic recovery. 

If they do, it will likely weaken the euro. As this has been progressively priced into the market, we’ve seen the euro lose value over recent weeks which is the main reason rates are currently so high. Because it is widely expected, for the most part it is already priced into the rate. If QE is announced however it may not actually cause further gains. 

However if there’s no announcement, expect GBP/EUR to fall away as the expectation has already been partially priced into rates. Furthermore, in a week’s time, the Greek election will cause uncertainty for the Eurozone, so there is much on the horizon that could significantly harm the euro. 

If you’re buying or selling Euros, what should you do? 

In the first instance you should discuss your currency requirement with me, to talk about your specific needs and discuss what is moving the market. I can also explain the various options you have at your disposal. 

For example, euro sellers should consider buying forwards to protect against the rate getting worse. Euro buyers should consider a stop loss order, to protect against the market dropping should QE not be announced. It would be a shame to miss out on a 7 year high by holding out for a small gain. 

Whatever your currency requirement, if you’re keen on achieve the best possible rates, contact me today by clicking here to make a free enquiry.

GBP/EUR gains unlikely as UK interest Rates set to remain low

Wednesday 29th October 2014 
Pound/Euro rates have slipped slightly in the last 24 hours, bringing the mid-market rate down to €1.2647. While a little lower than the recent 6 year high, it’s still a very attractive buying level for Euros given that last summer rates were as low as €1.14. 

GBP/EUR gains unlikely as UK interest Rates set to remain low 

Part of the reason the Pound has failed to go any higher against the Euro is the fact interest rates are no longer expected to go up any time soon. Reinforcing this view was a speech this week from the Bank of England (BoE) deputy governor Jon Cunliffe. 

In it he said that interest rates can be kept at their current record low level for longer than first thought, saying that weak pay and lower inflation, coupled with slower UK growth and slowdown in the global economy meant the BoE should remain "cautious". 

So with rates now set to remain at their record low of 0.5% for quite some time, it’s hard to see what would push Sterling exchange rates higher. Those that need to buy Euros should therefore consider locking in a rate now while it is still close to the 6 year high. 

Those selling Euros however should be cautious. While the Pound is unlikely to gain, a deterioration of the EU economy could weaken the Euro, meaning less Pounds for those that are converting the single currency back to Sterling. 

If you need to convert Pounds to Euros, or Euros to Pounds, click here to get a free quote and find out more about the foreign exchange services I offer. Rates I source are up to 5% better than banks can offer, so you could save thousands of Pounds by comparing the rates I offer. 

Pound/Dollar set to drop? 

GBP/USD has been on the way down for a few months now, dropping from $1.72 to $1.60. Currently rates hold firm around $1.6140. However the US Federal Reserve is expected to announce the end of its quantitative easing (QE) programme later, and this could strengthen the Dollar, make it more expensive to buy and pull the GBP/USD rate down further. 

The FED has been gradually cutting back the scheme, which began in 2008, since late last year. The end of QE, assuming it does indeed come, will nonetheless be an important milestone in the repair of the US economy and likely strengthen the Dollar. 

Whether it makes a difference to the GBP/USD rate however remains to be seen. As it’s widely expected to happen, it will be priced into the rate already, but it’s impossible to know by how much. I wouldn’t be surprised to see rates drop below the $1.60 level throughout the rest of 2014. 

If you have a requirement to buy or sell USD, click here to send me a free enquiry to see how I can assist you in getting the best possible rates.

Pound/Euro forecast between €1.24 and €1.27

Tuesday 21st October 2014 
In the week since my last post, we have seen significant volatility in Pound/Euro rates. As you can see from the chart below, we have seen highs touching €1.27, and lows or nearly €1.24: 

 

What is causing the volatility in GBP/EUR rates? 

The movements in the exchange rate over the last week have been very large indeed. In the last 7 days alone, the cost of buying a €250,000.00 property has differed by nearly £5000.00 purely due to fluctuations in the exchange rate. This clearly illustrates how important your timing is, in addition to having a good knowledge of what can move the exchange rate. 

The Pound fell last week on data and comments from the Bank of England, which suggest that interest rates are going to remain low for up to a year. This has taken the wind out of the Pound’s sales and caused exchange rates to drop. 

The fall was short lived however, as data from the Eurozone doesn’t exactly inspire confidence. Various EU economies are not performing very well, and this has weakened the Euro helping the rate to recover. 

Will Pound/Euro rates go up or down in the next 6 months? 

I personally think that the Pound’s strong run has come to an end and all the good news surrounding the UK economy is now largely priced into the rate. The only thing I can see that would cause rates to rise would be a further deterioration of the EU economy. 

Indeed I think it’s likely the European Central Bank will have to create money to pump in to the economy, which taken on its own could weaken the Euro and push rates up. 

What’s hard to quantify however, is what the knock on effect of an EU slowdown would have on the wider global economy, particularly the UK. The EU is our largest trading partner and as Europe slows, our growth is also at risk. So a weakening of the Pound could also be a result of a weakening in the Eurozone. 

In the short term, tomorrow’s Bank of England minutes showing how keen they are for an interest rate hike is the main event this week that will affect Sterling exchange rates. 

Get in touch to find out how to get the best exchange rates 

When you need to buy or sell currency, to buy property abroad for example, the exchange rate can make a huge difference to the cost. 

Getting the best exchange rates is paramount, as is timing your purchase. Often a property purchase or sale can take several months to complete, during which time your return could be severely affected by changes in the exchange rate. 

If you need to buy or sell currency for any reason then it’s worth getting in touch with me to discuss your requirements. I can provide you a quote for you to compare with your bank or existing broker. I can also explain what is happening to the exchange rate including helping you decide when to fix a rate. Also, I have various tools and contract types to protect you against the market moving against you, and ensure you don’t get a worse rate than is necessary. 

It’s free to make an enquiry, doesn’t obligate you in any way, and like thousands of clients that have contacted me through my blog, you could save thousands of pounds. 

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Pound/Euro & Pound Dollar forecast 2014

Wednesday 6th August 2014 
Good afternoon. The currency markets remain quite volatile, with Pound/Euro rates recovering slightly this week back to the €1.26 mark; however Pound/Dollar rates have fallen to around $1.68, quite a bit below the 5 year high we recently saw. Today I’ll cover what has been happening to exchange rates, including forecasts on where the GBP/EUR and GBP/USD rate may move in the coming weeks. 

Pound/Euro 

As you can see from the chart below, the Pound/Euro rate recently hit a 2 year high of €1.27. Many thought the rate would continue to climb towards 1.30 however I warned that I thought the market had peaked, and the Pound/Euro rate was as high as it may go in the short term. 

Indeed over the course of the last month the rate has failed to improve, and has dipped several times due to poor UK economic data. There have been warnings from the IMF that the Pound is far overvalued, and UK economic figures are starting to disappoint. For much of 2014 the UK has been enjoying a robust economic recovery, and this had been driving the Pound upwards. 

It now seems the good news is all priced into the value of the Pound, and that’s why the rate has leveled off. This morning we had some poor UK Manufacturing and Industrial production figures that knocked the Pound lower, however it soon recovered as we saw poor German factory orders that weakened the Euro and reversed the drop. 

The next mover for exchange rates will likely be tomorrow’s Bank of England and European Central bank statements. Clues could be given to monetary policy, and any surprises could easily cause exchange rates to move significantly. 

Which way could Pound/Euro move in the coming months? 

It’s impossible to predict the market, but my view is that the Pound is unlikely to break higher in the short term. The fact that interest rates will only rise slowly in the UK is likely to keep the Pound in check, so if you need to buy Euros this year, you should consider fixing the rate while it’s so good. You can fix the rate for up to 2 years into the future by lodging 10% of the total you want to convert. Click here to find out more about these types of contracts. 

Those with Euros to move back to Pounds should also be cautious. While rates have stopped moving against you, you don’t want to leave yourself exposed. A Stop Loss order protects you against the exchange rate getting worse, while still allowing you to take advantage of any gains in your favour. 

If you are looking for the best rates between Pounds and Euros, click here for a free no obligation enquiry on how we can help you and the rates we can offer. 

Pound/Dollar forecast 2014

Recently Sterling/Dollar was comfortably above the $1.70 mark, however has been falling in recent weeks. I expect this to continue due to the fact the US economy is starting to recover, and this is strengthening the Dollar making it more expensive to purchase. 

The political uncertainty in Ukraine and the Middle East is also causing the ‘safe haven’ US Dollar to gain strength. I wouldn’t be surprised to see rates back towards the $1.60 mark by year end. 

Need to buy or sell US Dollars at the best rate? Click here for a free quote. 

Get in touch for a free quote on our exchange rates 

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Buying or selling property abroad? 

Converting Euros back to Pounds? 

Buying goods from overseas? 

Topping up your Euro account in France? 

Import materials from China for your business? 

Want the very best rates of exchange?

- See more at: http://www.foreignexchangerateforecasts.blogspot.co.uk/2014/07/pound-falls-further-against-other.html#sthash.iBgo6lMi.dpuf

Get in touch for a free quote on our exchange rates 

• Buying or selling property abroad? 
• Converting Euros back to Pounds? 
• Buying goods from overseas? 
• Topping up your Euro account in France? 
• Import materials from China for your business? 
• Want the very best rates of exchange?

Whatever your currency needs, large or small, my service can help you achieve the best exchange rates and utilise contracts that can protect your bottom line. 

Click here to make a free enquiry today and find out how I can help. - See more at: http://www.foreignexchangerateforecasts.blogspot.co.uk/2014/07/pound-falls-further-against-other.html#sthash.iBgo6lMi.dpuf

Get in touch for a free quote on our exchange rates 

• Buying or selling property abroad? 
• Converting Euros back to Pounds? 
• Buying goods from overseas? 
• Topping up your Euro account in France? 
• Import materials from China for your business? 
• Want the very best rates of exchange?

Whatever your currency needs, large or small, my service can help you achieve the best exchange rates and utilise contracts that can protect your bottom line. 

Click here to make a free enquiry today and find out how I can help. - See more at: http://www.foreignexchangerateforecasts.blogspot.co.uk/2014/07/pound-falls-further-against-other.html#sthash.iBgo6lMi.dpuf

Pound/Euro & Pound/Dollar May 2014 forecast

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

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

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

What next for Pound/Euro rates? 

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

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

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

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

What next for Pound/Dollar rates? 

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

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

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

Contact me to discuss GBP/USD or USD/GBP

Getting the best exchange rates 

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

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

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

Send me a free no obligation enquiry by clicking here.

Alastair Archbold

How has FED tapering affected exchange rates?

Thursday 30th January 2014 
There has been some key volatility in exchange rates this week, being mainly driven by events in the USA. In today’s report I’m going to explain how the FED tapering has pushed some exchange rates higher such as the Pound against emerging economies such as Turkey, New Zealand & South Africa, and some exchange rates lower for example Pound/US Dollar. 

FED cut stimulus as expected 

Last night the US Federal Reserve announced a $10bn reduction in its monthly bond purchases from $75bn to $65bn. This is the second month in a row they have done so. 

The central bank had been buying bonds in an effort to keep interest rates low and stimulate growth, and now they are winding that in is a sign of positivity for the US economy. 

So how has this affected exchange rates? 

Pound/Dollar rates have fallen. This is because the news is good for the USA, and so the Dollar has strengthened and become more expensive to buy. It’s dropped from 1.66 to 1.65, not a huge drop because the move was expected. 

Of more interest was the effect on currencies in emerging markets. Investors have been selling riskier higher yielding currencies like the South African Rand (ZAR), New Zealand Dollar (NZD), Australian Dollar (AUD) and Turkish Lira (TRY). The reason is there are fears their economies may now suffer as the reduction in liquidity from the FED takes effect. Read more about this in detail here on the Telegraph site.

This means these currencies are very cheap to buy, and we’re seeing some of the highest exchange rates for these currencies for some time. Some of the countries have started to raise their interest rates to try and stop the capital flow out of the country as outlined in the link to the Telegraph above. 

Some analysts said that while the Fed may not have explicitly mentioned emerging markets in its statement, it would be an oversight to think the central bank is not keeping a close eye on the global economy. "The FOMC will want to observe the domestic and international market reaction to today's tapering decision," said Jefferies chief US economist Ward McCarthy. 

There are some great exchange rates available for AUD, NZD, ZAR, TRY among others. If you need to purchase these currencies in the short to medium term, you can get in touch with me to find out more about the exchange rates I can offer by clicking here. 

Pound/Euro remains stable between €1.21 & €1.22. 

Closer to home, we have seen the GBP/EUR rate fluctuate a little, but today has risen from €1.21 to €1.2160. There was some poor data from Germany that has weakened the Euro a little this morning. 

I don’t expect any significant gains in the GBP/EUR rate in the short term, mainly because the Bank of England has recently made it clear interest rates will not be rising any time soon. 

The rate is still very close to the best in 12 months, so if you need to buy Euros and want to take advantage of the current levels, click here to send me a free no obligation enquiry.

Pound/Euro & Pound/Dollar exchange rate forecast

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

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

Bank of England takes dovish tone on UK economy  

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

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

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

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

UK GDP growth confirmed at 0.8% 

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

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

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

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Pound/Euro forecast

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

 

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

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

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

Pound/Dollar forecast

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

 

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

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

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

Best exchange rates

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

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

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

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

Click here to send me a free enquiry.

Alastair Archbold