Sterling at 2.5 month high vs Euro August 2011

Friday 19th August 2011

Good morning. Sterling rose well against the Euro yesterday, as investors perceived the Pound as the best of a bad bunch of currencies. As markets around the world plummeted on risk fears, Sterling gained and GBP/EUR rates are at a near 2.5 month high. At 08:30m this morning rates are as follows:



• GBP/EUR 1.1531

• GBP/USD 1.6500

• GBP/AUD 1.5916

• GBP/NZD 2.0061

• GBP/CHF 1.3028

• GBP/CAD 1.6325

• GBP/ZAR 11.881

• GBP/JPY 126.05

• GBP/DKK 8.5886

• GBP/NOK 9.0377

• EUR/USD 1.4304



Sterling gains significantly vs Euro



Yesterday markets across the world fell, with the biggest fall on the FTSE since the financial crisis began. We saw a flight from risk, where investors were jittery and moved their funds to perceived safe havens. Usually this means the US Dollar and Swiss Franc, however with problems in the US and the Swiss keeping their currency weak, Sterling benefited.



So Sterling is gaining support from the perception it is the best of a bad bunch of currencies. We have stable credit ratings, political calm and a deficit reduction plan in place. This meant GBP exchange rates gained, particularly against the weaker Euro, still reeling from failures of EU leaders to reach an agreement on sovereign debt.



So is Sterling going to remain strong?



Many are questioning the Pounds buoyancy at the moment, as the UK economy is far from healthy. Just this week we've had poor Retail Sales figures, higher than expected unemployment, and dovish minutes from the Bank of England. Due to this, many analysts think that these gains will be short lived.



The government's fiscal austerity programme is also expected to hamper demand in the economy, leaving sterling vulnerable to weakness in the medium term.



Best time to buy Euros?



Well it's certainly close to the best in well over 2 months, and given the uncertainty surrounding the world economy, those that need to buy Euros should consider fixing the rate while it's so good. Even if you don't need your funds for some time, a Forward contract allows you to fix today's rates for up to 2 years, and only lodge 10% of the total to be converted. Contact us today to discuss our exchange rates and how these contracts work.



Today's Data



We end the week with Public Sector borrowing from the UK, and further inflation figures from Germany.



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

Sterling makes gains against Euro/US Dollar

Thursday 18th August 2011

Good morning. Yesterday morning Sterling fell after poor unemployment data, however in the afternoon the Pound surged back against other currencies, creating close to the best exchange rates for several months. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1462

• GBP/USD 1.6515

• GBP/AUD 1.5755

• GBP/NZD 1.9849

• GBP/CHF 1.3136

• GBP/CAD 1.6230

• GBP/ZAR 11.758

• GBP/JPY 126.44

• GBP/DKK 8.5391

• GBP/NOK 8.9267

• EUR/USD 1.4402



BoE Minutes



Yesterday the Bank of England released the latest minutes to the recent decision to hold interest rates. They voted 9-0 to keep rates on hold, surprising many in the markets that thought 2 would vote for a hike in rates.



It didn't affect exchange rates too much, as we already know that rates in the UK are going to be left on hold for at least a year. The minutes also showed the policy-setting committee considered a new round of stimulus given a worsening economic outlook, acknowledging that problems in the euro zone were the biggest threat to the UK economy.



UK Unemployment



Data surprised yesterday, when the number of Britons claiming unemployment benefit jumped by more than expected last month, and the rate hit the highest level since February 2010. Immediately after the results, Sterling fell around 0.5% against other currencies.



Sterling surges in the afternoon



Despite the dovish BoE minutes and the higher than expected unemployment figures, Sterling surged in the afternoon, making gains against the Euro and US Dollar. After initial selling of the Pound after the poor data, traders were forced to cover these positions leading to a short squeeze on Sterling, helping push rates up nearly a cent against the Euro.



Summary



Those that need to buy Euros should consider taking advantage of these rates, as several times in the last month we have reached these levels, only for rates to quickly drop back away. With uncertainly surrounding the UK economy rates could easily drop back away.



Conversely, if we get further poor news from the EU, we could see the Euro weaken and rates climb, so it's certainly very volatile at the moment. Regardless which currency you need to buy or sell, contact us today to discuss the tools we have to help you achieve the best possible exchange rate.



Today's Data



Today’s UK data is Retail Sales, which are a barometer of consumer confidence. From the USA we have unemployment figures, Jobless Claims and Home Sales. There are no major releases from the EU today.



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Pound vs Euro rates gain on EU debt

Wednesday 17th August 2011

Good morning. Sterling rose yesterday, after inflation figures reduced the risk of more Quantitative Easing. The Euro also weakened, after poor German GDP data, and a failure for the German and French leaders to reach an agreement over EU debt. Combined, this pushed GBP/EUR rates up. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1428

• GBP/USD 1.6438

• GBP/AUD 1.5684

• GBP/NZD 1.9681

• GBP/CAD 1.6157

• GBP/ZAR 11.718

• GBP/JPY 125.90

• GBP/DKK 8.5128

• GBP/NOK 8.9405

• EUR/USD 1.4381



Sterling rises but downside risks remain



Higher inflation yesterday for the UK reduced the risk of Quantitative Easing in the UK, pushing Sterling slightly higher against other currencies. However, with the UK economy fragile and UK interest rates still expected to stay at record low levels for at least a year, Sterling's gains were limited. Analysts expect the Pound to stay within its recent ranges against the euro and dollar.



Today is important, as we see the minutes to the BoE meeting earlier this month. Analysts said the higher inflation data could mean the minutes may not be as dovish as some traders had been positioning for in the wake of last week's downbeat BoE quarterly inflation report. Given that interest rates are going to remain low for some time, this will limit gains for Sterling.



Euro weakens on GDP and EU debt



EU and German GDP yesterday was lower than expected. The German economy only grew by 0.1%, France by 0.0%, and the EU as a whole only 0.2%. The slow growth figures weakened the Euro, making it cheaper to buy and pushing GBP/EUR rates up.



There was also a meeting yesterday between German and French leaders, however they failed to reach an agreement and this weakened the Euro further.



Today's Data



Various Unemployment measures are released for the UK today, and we also have the minutes to the latest Bank of England (BoE) decision to hold interest rates. Any mention of Quantitative Easing could weaken Sterling. From the Eurozone, there are Consumer Price Index figures, which if high could strengthen the Euro. From the US there are also inflation numbers released in the afternoon, along with mortgage approvals.



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

Sterling falls vs Euro, gains vs US Dollar.

Tuesday 16th August 2011

Good morning. Sterling fell against the Euro yesterday, on worries there would be more Quantitative Easing in the UK. The Euro also gained strength on a jump against the Swiss Franc. The Pound gained against the US Dollar however, after a batch of weak US data weakened the USD. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1355

• GBP/USD 1.6335

• GBP/AUD 1.5662

• GBP/NZD 1.9670

• GBP/CAD 1.6075

• GBP/ZAR 11.687

• GBP/JPY 125.42

• GBP/DKK 8.4582

• GBP/NOK 8.9205

• EUR/USD 1.4378



Sterling falls against stronger Euro



The Pound slipped against a stronger euro during trading yesterday. The broad gains in the single currency were led by a jump against the Swiss franc. There is speculation that the Swiss central bank may announce more measures to stem the franc's strength, and this benefited the Euro, making it more expensive to purchase.



The euro also climbed on the back of buying by a UK bank, while traders said steady selling by UK corporates and sovereign investors tempered sterling's rally versus the dollar.



Sterling gains against US Dollar



Sterling rose against the USD yesterday after a batch of weak U.S. economic data hurt the U.S. currency, but concerns about the UK recovery and the chance of monetary easing are expected to keep the pound in check. The poor data from the US made the dollar cheaper to buy, and this is why rates climbed against USD despite dropping against the Euro.



Euro strong, Dollar weak, what about Sterling?



There is much UK economic data this week, including figures on retail sales and unemployment, and also the minutes to the recent BoE decision. Retail Sales are expected to show high street sales are struggling to rise while the jobs picture remains gloomy.



Even if the data shows the UK recovery is faltering however, analysts said the UK was not looking as bleak as the euro zone which is being hit by the debt crisis and slower growth in core countries, including France.



For this reason, many in the markets expect Sterling to be supported against the euro this week. Beware however, as comments from Bank of England policymaker David Miles yesterday said economic recovery was "fragile" and it was possible that more stimulus from quantitative easing might be necessary at some point. This would significantly hurt the Pound.



Today's Data



We start in the EU, where we have GDP figures from Germany, Europe’s largest economy. There are also GDP figures for the EU as a whole, in addition to EU Trade Balance. From the UK we have inflation data (Consumer Price Index). From the USA we will see the latest measures of Industrial Production and Housing Starts.



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Pound Sterling Forecast for GBP/EUR & GBP/USD

Monday 15th August 2011.

Good morning. As usual on a Monday, today we'll take a detailed look at the Pound/Sterling forecast for Sterling vs Euro, Sterling vs US Dollar, and this weeks data that may affect getting the best exchange rates.

In this week’s Report:



• Rumours of French downgrade weakens Euro

• Market Volatility creates big exchange rate swings

• BoE paint gloomy picture of UK growth

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



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



Sterling vs. Euro;

Last week was a rollercoaster ride for all the major markets, with currencies and indeed the GBP/EUR cross being no different. Wild swings in both directions during continued choppy trading resulted in excellent price points for both buyers and sellers on this cross.

The market as a whole seems unable to decide whether Sterling or the Euro is the most stable bet going forward. Rumours that France along with several of its marquee investment banks were in line for credit rating downgrades swung the cross in the Pounds favour, only for gains to be pegged back by poor UK economic figures.



The most notable event which detracted from GBP gains was the Bank of England’s Growth forecast cut, which demonstrated to the market, as if it didn’t already know that times are still hard in the UK and that the economy is by no means out of the woods. Indeed it is still not out of the realms of possibility that a second recession could bite in Britain.



However for all the gloom on this side of the channel, much of the focus going forward will be on whether France with its problems, will be able to continue to support Germany in bankrolling the sovereign debt issues cropping up all over Europe. With severe worries about Spain and Italy requiring bailouts akin to those in Greece, Ireland & Portugal, the purse strings across the channel may not be as freely loosened as they have been thus far.



This week will probably continue to see fairly choppy rate fluctuations, although most traders will expect it to calm down when compared to the week gone by. A full list of the main data to watch out for follows later, but for this cross Tuesdays UK inflation figures and the Bank of England Minutes usually cause some volatility and Tuesdays’ Euro zone GDP figure is worth watching out for too. This said, often the biggest market moves occur on the back of events that appear on no calendar; the rumours and political events that unfold throughout the week.



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Sterling vs. US Dollar;

In what was one of the most turbulent weeks across the global markets since the credit crisis began in 2008, all eyes were on the US as worldwide stability looked shakier than ever. Global stocks saw Billions of dollars wiped from their value on consecutive days in the early part of the week as the markets readied themselves for another potential credit crunch.

In the wake of the US being downgraded to AA rating from AAA by the credit rating agency ‘Standard and Poor’s’, Sterling began the week at a near two-month high against the beleaguered Dollar as the downgrade led more investors to sell the greenback.



Sterling’s momentum against the Dollar was maintained early on Tuesday as the UK’s AAA rating looked safe following Standard and Poor’s Chief stating in an interview that he didn’t expect a ratings drop in the UK within the next 2 years. However, comments about Sterling becoming the next ‘safe haven’ currency were quickly dismissed in light of the unfolding problems with rioting in the capital which dragged on throughout the week.



This was followed just before lunch on Tuesday by a slight slip as UK manufacturing data fell by a surprise 0.4% rather than a 0.2% growth as expected – However, continuing concerns over the US prevented the Pound slipping too much. "In isolation this data is definitely sterling-negative. In ordinary conditions it feeds the idea the Bank of England will not be hiking interest rates any time soon," said Jane Foley, currency strategist at Rabobank.



The fortunes of Sterling were almost instantly reversed on Wednesday as the Pound fell by 1 percent against the Dollar following the news that BoE lowered its expectation for annual GDP growth to around 2.0 percent in the last quarter of 2011. In May, it had forecast 2.47 percent growth by the end of the year. Investors, appearing very fickle following comments earlier in the week took the news and headed straight back to the relative ‘safely’ of the US Dollar and out of Sterling.



Following the release of the inflation report, BoE Governor Mervyn King suggested that monetary policy would remain ultra loose with interest rates being kept at a record low of 0.5 percent for some time as the global economy is slowing. It is widely expected that interest rates will be kept on hold now until the end of next year.



Mervin King went on to say that adding to the BoE's asset-buying programme would be a possibility if the economic outlook deteriorated, but suggested that more quantitative easing may not be imminent. Despite the markets ending the week more stable than they started and with the stock market recovering somewhat, the global market’s future is far from predictable. Gold remains at near record levels and this is for good reason - no one is quite sure what will happen next.



Will we will drop from this seeming precipice into another full scale recession or will we be able claw our way slowly back to growth? All this uncertainty leaves the Cable notoriously difficult to predict. UK retail sales and US inflation data are just two of the releases this week which have the potential to see Cable move significantly - Speak to your FCG account manager for up to the minute market data and ensure that you capitalise on your gains whilst protecting yourself against negative market movement.



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Weekly Economic Data that may affect exchange rates



Monday – There is no data of note from the UK or EU. There is some trade flow data from the US, which is looked at as an indicator of the trade deficit.



Tuesday – We start in the EU, where we have GDP figures from Germany, Europe’s largest economy. There are also GDP figures for the EU as a whole, in addition to EU Trade Balance. From the UK we have inflation data (Consumer Price Index). From the USA we will see the latest measures of Industrial Production and Housing Starts.



Wednesday – Various unemployment measures are released for the UK today, and we also have the minutes to the latest Bank of England (BoE) decision to hold interest rates. Any mention of Quantitative Easing could weaken Sterling. From the Eurozone, there are Consumer Price Index figures, which if high could strengthen the Euro. From the US there are also inflation numbers released in the afternoon, along with mortgage approvals.



Thursday – Today’s UK data is Retail Sales, which are a barometer of consumer confidence. From the USA we have unemployment figures, Jobless Claims and Home Sales. There are no major releases from the EU today.



Friday – We end the week with Public Sector borrowing from the UK, and further inflation figures from Germany.

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

Pound Euro Rate Forecast GBPEUR

Friday 12th August 2011

Good morning. Sterling had a choppy day in the markets yesterday, swinging up and down vs the Euro and other currencies as investors try to make sense of all the volatile data we have had this week. Today we'll look at Pound vs Euro, Pound vs US Dollar, and the options available to help you achieve the best exchange rates, whatever your currency requirement.



Pound vs US Dollar



Sterling hovered near 3 week lows against the dollar yesterday, with the Pound struggling after the Bank of England downgraded its growth forecast earlier in the week, and also due to risks of further declines growing as the UK government's fiscal cuts continue to bite. With the recent downgrading of the US, many expected the USD to weaken, however it remains a safe haven currency and this is keeping the dollar strong. Hard to call where this currency pair will move, but at the moment it remains around the $1.61 - $1.63 level.



Pound vs Euro



GBP/EUR rates fell this week as the Bank of England gave a gloomy outlook for economic growth. Rate then went back up on rumours that France was about to lose its AAA credit rating and that Societe Generale was in line for a government bailout. The rumours were denied by credit rating agencies, the French Treasury and Societe Generale. As such focus returned to poor UK figures, and this dragged rates back down again. The swings seem to be in line with markets deciding whether Sterling or the Euro is the best bet.



It was very choppy in the markets yesterday, with rates swinging between €1.1360 and €1.1445 as analysts tried to make sense of the growth figures and credit rating rumours.



In Europe, the concern centres on whether Spain and Italy will have to follow Greece, Portugal and the Republic of Ireland and require bailouts. The fear has since spread this week to whether other eurozone countries, and most notably France, can afford to put funds into an expanded European Financial Stability Facility that will pay towards any required future bailouts.



Swiss Franc has huge movements.



The GBP/CHF rate in the last week has moved between 1.1650 and 1.2700 in the last week. This is a huge movement, and caused by the Swiss National bank cutting the interest rate to try and weaken the currency. As the Swiss Franc (CHF) is a safe haven currency, it had become incredibly strong in the current market turmoil. As this was hurting the economy, the move was made to weaken the currency, and it's certainly had an effect.



The Euro also rose against the CHF, boosted by talk the Swiss currency could be pegged against the euro. If this were to happen, it would be aimed at weakening the CHF. The speculation is that the euro/Swiss franc pair may be pegged at 1.15 francs.



What are your options?



Whether you are buying or selling currency, exchange rate movements at the moment are very volatile, and could move either way by some margin. This could of course work for or against you, depending which way the market moves.



So, you could simply leave it to chance and hope rates move your way, however hope is not a reliable economic tool. There are various ways to take control of the market to ensure you don't get caught out by rates moving the wrong way.



Stop Loss and Limit Orders allow you to place an order to buy/sell currency if it goes up to a level not currently achievable, or below a pre-agreed level. In this way you take advantage of any gains in the rate, without leaving yourself open should things not move your way.



Alternatively you could fix the rate now with a Forward contract, and this is the best option for those of you that are risk averse. This give you the cost of your currency for up to 2 years, and you are protected against movements in any direction.



Whatever your currency requirement, don't just leave it to chance. Contact us today to discuss the options available with an expert currency broker.



To discuss these types of contract with us, send us a free enquiry today.

Pound falls on BoE cut in growth forecast

Thursday 11th August 2011

Good morning. Sterling fell yesterday after the Bank of England cut it's growth forecast. This pushed the Pound down against other currencies. Against the Euro, Sterling gained slightly due to rumours the credit rating of French banks may be at risk. At 08:30am this morning rates are as follows:



• GBP/EUR 1.1351

• GBP/USD 1.6162

• GBP/AUD 1.5774

• GBP/NZD 1.9746

• GBP/CAD 1.6003

• GBP/ZAR 11.585

• GBP/JPY 123.86

• GBP/DKK 8.4564

• GBP/NOK 8.9185

• EUR/USD 1.4234



Bank of England cut growth forecast



The Bank of England has cut its UK growth forecast for 2011 from 1.8% to about 1.5%, warning that the "headwinds are growing stronger by the day". Bank governor Mervyn King said Europe's debt crisis and fears of contraction in the US overshadowed the world economy.



The Bank's report was compiled before the latest meltdown on financial markets, and Mr King acknowledged that "the mood in markets has taken a sharp turn for the worse". Some analysts believe the crisis in the markets will add to the Bank's existing concerns.



"It is important to remember that the report itself was compiled before the recent market volatility and so the forecasts will not have reflected the recent plunge in equities and commodity prices," said James Knightley, an economist at ING.



The news pushed Sterling down against other currencies and exchange rates fell.



French downgrade rumour weakens Euro



Despite Sterling falling against other currencies, against the Euro the Pound rose slightly on speculation that France could be the next triple A-rated sovereign to suffer a downgrade. Ratings agencies have since states this is not the case, however this demonstrates how volatile the markets are at the moment, and even the slightest rumour is enough to significantly alter exchange rates.



Today's Data



It's a bit quieter today, with a report from the European Central bank the only thing likely to affect GBP/EUR. In the USA there are various jobless measures.



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