Blog shutdown for Christmas

Tuesday 20th December 2011
Good morning. The blog will now close for a short time while I take a much needed Christmas break! Blog updates will resume on the 30th of December.

The live rates in the sidebar will continue to be updated every 30 seconds. You can also keep abreast of rate movements in the following way:

Click here for the most recent market Report

Click here to follow rate updates on Twitter

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.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 19th December 2011
Good morning. So, it's the usual Monday morning take on the previous weeks movements in the currency markets.

In this week’s Report:

• Pound/Euro rates peak at 10 month high
• Euro depreciates due to lack of resolution to debt crisis
• UK unemployment at 17 year high
• Round up of the week’s data that may affect rates

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

Sterling vs. Euro;

The markets verdict on last week’s EU summit became clear as the week saw investors move towards safe-haven currencies like the USD. Sterling was well supported with Cameron’s decision to exclude the UK from the new Eurozone treaty as we saw the GBP/EUR rate reach a new high of 1.1949 (Interbank).













Tuesday saw Germanys Chancellor Angela Merkel declare that no further money will be made available for the European Stability Mechanism and that the ECB will not become a lender of last resort. This immediately affected the value of the Euro pushing it up towards the 1.19 level. In the UK, Consumer Price Index (CPI) fell from 5% to 4.8%, but events in the Eurozone overshadowed this.

The Euro weakened further on Wednesday with the GBP/EUR rate reaching a ten month high. UK jobless figures were released and had increased by 128k reaching over 2.64 million, the highest number of unemployed since 1994. With poor data being released from both the UK and Euro zone you might expect that the pairing would stay relatively stable. The reason why this didn’t and hasn’t happened is due to the uncertainty to what is going to happen with the single currency.

Credit ratings of the world’s biggest lenders have come under pressure as weak economic growth and concerns about whether European politicians have done enough to end the Eurozone debt crisis. Some of the world’s most powerful investment banks were downgraded by ratings agency Fitch.

France was warned by credit ratings agencies that it could be downgraded over the Eurozone crisis. Some in France suggest that any downgrade should instead start with the UK, however Downing Street brushed off the remarks stating “we have put in place a credible plan for dealing with our deficit”. This statement is key to why Sterling is performing well at the moment; the markets like the fact a plan is place to reduce our deficit, and this is why Sterling is supported despite poor economic data.

So in summary rates are currently at a 10 month high and rates do look to be stabilising as EU leaders carry on discussing how to combat the debt crisis. Rate forecasts in a recent Sunday Times article for 2012 varied between 1.14 and 1.25 showing the lack of consensus and the fact it could go either way depending on how the single currency reacts.

If you need to buy or sell Euros, send me an enquiry now.

Sterling vs. US Dollar;


Sterling’s fortune against the Greenback last week was in vast contrast to its performance against the Euro despite Europe’s crisis being the main driver as explained in the Euro report above.

Sterling fell to its lowest level in three weeks on Monday as investors questioned the progress made at last week's EU summit, driving demand for the safe-haven U.S. currency as analysts played down the impact on Sterling of UK Prime Minister David Cameron's veto of any EU budgetary rules, despite concerns that he risks isolating Britain in the 27-nation bloc.













Europe issues aside, the US economic outlook showed signs of improvement and further bolstered the Dollar as unemployment figures month on month returned better than expected, manufacturing output was up from the preceding month, inflation held steady and the FOMC (Federal Open Market Committee) left their monetary policy unchanged and highlighted the turmoil in Europe as a big risk to the U.S. economy.

Coupled with the positive week the US had in terms of economic indicators, cable would continue to take its lead from the Euro crisis, eventually forcing Sterling to a two month low moving towards the close of the week.

As the Euro zone crisis deepens there is every chance we could see the Dollar strengthen further unless of course the European treaty can somehow restore confidence to the markets in which case we may see a renewal of risk appetite as investors begin to test the water once more.

As the levels of uncertainty in the markets and volatility increase and as we near the Christmas holiday season it may be a prudent decision if you have an impending transfer to keep in close contact with your FCG account manager to ensure your maximising your return on your funds.

If you need to buy or sell US Dollars, send me a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – New Zealand has business confidence data that might affect GBP/NZD rates. Closer to home Rightmove has it’s house Price index, reflecting the health of this sector. In Euro, there is construction data, but of course continued developments in the Eurozone will likely have the biggest effect on rates.

Tuesday – Today the UK will see Nationwide and Gfk Consumer Confidence figures which may affect Sterling. In Australia the minutes to the recent interest rate decision are released. There is lots of data from Germany also today; Confidence measures, Inflation numbers, Business climate and current account assessments, all of which could affect the Euro. Across the pond, the USA released housing and building data, and Canada has a host of inflation data.

Wednesday – The main UK data today is Public Sector borrowing. A deficit would weaken Sterling. There are no key releases from the Eurozone. In the states there are Homes Sales numbers, Canada releases Retail Sales, and in New Zealand GDP figures are released at 21:45pm.

Thursday – A busy day for the UK and US. Starting at home, we have GDP data, Business Investment numbers, and Current Account data. In the USA there are also GDP releases, in addition to Jobless Claims and personal expenditure.

Friday – The Japanese Emperors Birthday, although this is unlikely to affect the currency markets. Of more importance will be UK mortgage approvals. In the states there are quite a few releases; Personal Consumption, Durable Goods Orders and New Home Sales.

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.

Will the Pound/Euro rate go up or down?

Friday 16th December 2011
Good morning. It was a slightly calmer day in the markets yesterday, with the Pound remaining around the 10 month high against the Euro hit on Wednesday. The Pound also recovered slightly against the US Dollar. UK retail sales helped boost the Pound a little, as analysts said the underlying trend was surprisingly robust as previous months were revised higher. Below you can see how the Pound fared against the Euro and US Dollar during trading yesterday:

~Currency movements on Thursday 15/12/11~











Taking stock of the recent Pound vs Euro gains

So as we know, Sterling/Euro rates have risen this week to their highest in 10 months. But will rates continue to rise? Should you buy your Euros now or wait?

It's crucial to remember that this weeks gains for the Pound have been driven by negative sentiment towards the euro due to the escalating debt crisis. There has been no real good economic news from the UK.

Analysts said sterling's recent gains versus the euro mostly reflected euro zone debt worries after a European Union summit last week offered no hope the crisis will be resolved soon. This lack of a resolution has meant investors worried about further depreciation of the single currency moving funds out of the Euro, weakening it further.

Indeed, many of my clients this week have been converting Euros to the safe haven Swiss Franc or to Sterling. If you are considering doing the same, contact me now to find out about our commercial exchange rates.

I've been asked many times this week whether rates will continue to rise. While it's impossible to predict this, my view and indeed many analysts view is that it may struggle to get much higher, as GBP/EUR rates will face resistance at this level. This is where limit orders usually by large corporate firms are filled at certain levels, flooding the market and bringing rates back down.

"The 1.20 level in sterling/euro is a big level of resistance. A lot of orders from UK importers come in around there," said Lee McDarby, head of dealing for corporate and institutional treasury at Investec.

What else are the analysts saying? Will Pound/Euro go up or down?

There are widley contrasting forecasts coming out at the moment. Some have predicted more gains for sterling versus the euro in the coming weeks due to the safety of government bonds. However others think otherwise.

But Jane Foley who is a senior currency strategist at Rabobank, said although sterling was benefiting from some safe haven flows out of the euro zone, investors were likely to be unsettled by poor UK fundamentals, meaning any upside could be limited. Also political events in the UK could play their part. If there is any sign of dissent in the coalition after last weeks EU veto by David Cameron, this could pull the Pound back down. Political uncertainty is not good for a currency.

What you should do if you want to achieve the best exchange rates

Everybody’s requirement is different, as are peoples attitude to risk. Therefore the best course of action may differ depending on your requirements and risk appetite. Why not take the time to have a free consultation on your requirement. I can explain all the different options available to you in order for you to make an informed decision on what to do.

And don't forget, whatever course of action you take, our exchange rates are up to 5% better than banks and other financial institutions, and on large volumes this difference could save you a fortune.

Click Here to send me a free enquiry and book your free 10 minute consultation.

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.

Pound hits 10 month high vs Euro

Thursday 15th December 2011
Good morning. Investors continued to shun the Euro yesterday, weakening it further pushing GBP/EUR rates to a 10 month high, best since February. Sterling remained largely driven by negative sentiment towards the euro, leaving the Pound vulnerable as it fell to two-month lows versus the US Dollar. Later in the day, GBP/EUR rates fell back away, and the charts below show how exchange rates fared yesterday.

~Currency movements on Wednesday 14/12/11~











Pound vs Euro hits 10 month high

As the charts above show, the Euro weakened yet again yesterday and pushed the exchange rate up to a 10 month high. The euro was pressured as Italy had to accept higher borrowing costs, and the currency markets are also pricing in possible downgrades of euro zone countries after last week's European Union summit offered no hope of an immediate resolution to the debt crisis.

This weakened the Euro making it even cheaper to buy, and this is the reason for the gains. Later in the afternoon rates fell back away slightly but remain supported at very good buying levels.

The fact remains that the Pounds gains are really just a reflection of euro zone debt worries rather than any particular strength for Sterling. Also the EU veto by Cameron last week could be negative for the pound in the longer term. The key to whether rates will rise further will be whether the Bank of England opt for any more Quantitative Easing.

You can read more about yesterdays decline in Pound/Euro rates in, of all places, the Daily Mail. (apologies, it's not the type of newspaper I would normally link to!)

Sterling falls against the US Dollar

As the charts above show, Pound/Dollar rates fell yesterday. Same reason as usual! Euro weakness causing Dollar strength, making it more expensive to buy.

Pound rises against Australian Dollar















Sterling made good gains against the Aussie yesterday, and the Pound gathered strength in the light of the EU debt problems. Despite the UK economy suffering, it's seen as a safer bet than the Euro, helping push rates up. Rates gained by 1% yesterday.

Today's Data

A very busy day for the UK and EU. Starting in Europe, we have German Inflation data, and EU wide inflation data. There is also a monthly report from the ECB that could affect the Euros value. We then see further EU inflation numbers and unemployment data. On to the UK, there are Retail Sales to watch for in addition to Construction data. Stateside, Jobless measures and inflation data will be watched closely.

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.

Pound surges to new 9 month high vs Euro

Wednesday 14th December 2011
Good morning. Sterling/Euro rates rose again yesterday, gaining quite a bit during afternoon trading after reports that German Chancellor Angela Merkel rejected raising the upper limit of funding for the euro zone bailout mechanism, broadly weakened the single currency.

It was a fresh 9 month high, and in addition to the comments from Merkel, markets are disappointed by the outcome of last week's EU summit, and the threat of a credit downgrade is also looming over the EU. Sterling fell a little against the US Dollar, but remains fairly range bound at the $1.5500 to $1.5600 mark. The charts below show how exchange rates moved during trading yesterday (Tuesday) and you can see the surge in GBP/EUR in the afternoon after the comments from Merkel:

~Currency Movements Yesterday (13/12/11)~











Pound hits new 9 month high against the Euro

The fact that Angela Merkel rejected raising the upper limit of funding for the euro zone bailout fund had an immediate effect on the Euros value, weakening significantly and pushing GBP/EUR rates to fresh 9 month highs, approaching €1.19.

Also affecting rates, as mentioned in previous posts this week, the EU summit last week failed to reach any sort of agreement, or measures that would see the European Central Bank step up purchases of bonds. If they did it would relieve pressure on the struggling euro zone, and aso boost confidence in the markets. However the lack of this has meant investors selling off the Euro and it has weakened accordingly.

There is also the threat of a downgrade in the EU. Standard & Poor's warned last week that they could downgrade many Eurozone countries. Another credit agency Moody's said earlier this week it would also review the ratings of all 27 European Union states early next year. They are worried that last week's EU summit created no solution.

Weak Euro, but no fundamental strength in Sterling

The Prime Minister last week vetoed proposed treaty changes at the EU gathering. Analysts said that while this might create problems in the future, for now markets like the safety of UK assets, as they feel that at least in the UK there is a credible fiscal strategy in place to tackle debt, unlike the EU. So while we have our economic problems in the UK, the Pound remains supported against the single currency.

Yesterday we saw some inflation data which was pretty much as forecast, leading some to question whether more stimulus in the UK would be needed in the form of Quantitative Easing. The Bank of England's chief economist said yesterday that inflation would probably drop to just over 3 % early next year.

However many in the market are forecasting UK economic data like low jobs, high unemployment, slow retail sales and falling output could drive the BoE to resort to more asset purchases in coming months. As I've been saying in recent posts, more QE would flood the market with Pounds and push exchange rates lower. Last time QE was announced, GBP/EUR rates fell by 3 points in 2 days.

Will the Pound go higher against the Euro?

Impossible to say. Of course further issues in the Eurozone could weaken the Euro even more, but what other poor data could you hope for?! They have cut interest rates, many EU countries are in crisis and investors are dumping the Euro - this is what has caused it to weaken.

Some clients that need to buy Euros may want to see if it will go higher still, but in my opinion you would be holding out for an inch, and risking losing a yard. While of course it could keep rising, I believe there is much more to lose than there is to gain. Just over a month ago rates were around €1.13 - today buying €150k is £6000 cheaper due to the higher rates.

What would I do?

If I had Euros to buy, I probably wouldn't want to risk losing the gains seen in recent weeks. You could either buy your currency now, or if you are adamant you want to aim for more, then I would place a Stop Loss order - this is where you can place an order to buy should rates fall below a pre-agreed level. In this way you can still hope for the market to rise further, but have a safety net in place should rates drop. this is a good strategy to employ to make sure you don't lose out on the recent gains.

To discuss this type of order, or indeed anything to do with getting the best exchange rates, click here to send me a no obligation enquiry. I can provide a free consultation as to your options, and of course our exchange rates are significantly better than you can achieve at the bank, so the savings you make could be considerable.

When getting in touch, ask for Alastair Archbold and quote 'BLOG' to receive free transfers.

Best GBP/EUR rates in 9 months

Tuesday 13th December 2011
Good morning. The Pound surged against the Euro during trading yesterday afternoon, hitting a fresh 9 month high - the best exchange rates to buy Euros since March this year. Why did the Pound go up against the Euro? It's due to the single currency being sold off. As there was no real progress made at the summit last week, the Euro has weakened and become cheaper to purchase.

This also caused investors to flock to the safe haven US Dollar yet again, pushing Pound/Dollar rates lower. Below you can see how GBP/EUR & GBP/USD rates fluctuated during trading yesterday (Monday).

~Currency movements yesterday (12/12/11)~











Lack of progress in Europe weakens Euro; GBP/EUR up

European Union leaders last week struck a historic agreement for a new treaty for deeper integration within the euro zone. However, analysts and policymakers have remained very sceptical indeed that a solution will be found to the crisis. This was reflected in the currency markets yesterday, with a mass sell off of Euros by investors, significantly weakening the Euro and making it cheaper to buy. This pushed the Sterling/Euro exchange rate to a 9 month high; the best it's been in 9 months, much to the delight of clients requiring Euros.

Peter Kinsella, a currency strategist at Commerzbank said yesterday that "We still don't have an effective implementation regime in the EU, so nothing has changed on a fundamental basis,". So as markets don't see that anything has changed, worries about the EU resurfaced yesterday and this was the reason for the jump in rates into the €1.18's.

Given that in October the rate was €1.13, this is a significant increase. To put this in to real terms, buying €150,000 now compared to just a month or two ago is over £5500.00 cheaper.

If you want to take advantage of the current rate, even if you don't need your Euros for up to 2 years, you can lock the rate with a Forward contract. You only lodge 10% of what you want to convert, and the remaining 90% when you want your currency. In this way you can fix your rate at the high and be protected against any potential fall.

If you need to buy Euros, click here and send us a free enquiry.

Sterling falls against US Dollar

Despite the surge in rates against the Euro yesterday, the Pound didn't fare so well against the US Dollar. Due to the EU debt crisis having no solution, as I've outlined above investors have sold the Euro for the 'safe haven' US Dollar, and this strengthened the US currency making it more expensive to purchase.

This is reflected in the charts above, where you can see the steady gain in GBP/EUR rates but the choppy trade against the USD that saw us end the day down.

Today's Data

Today we have the first UK data of the week: House Price Data, Retail Price Index, and Consumer Price Index. In the Eurozone we will see German economic sentiment measures. Stateside there are Retail Sales numbers, Economic Sentiment measures and an interest rate decision where we expect the FED to leave rates unchanged at 0.25%.

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.

Weekly GBP/EUR & GBP/USD and the weeks data

Monday 12th December 2011
Good morning. As usual for Mondays, today I will take a look at events in the past week that have affected exchange rates, GBP/EUR & GBP/USD in particular, along with a breakdown of economic data releases that might affect exchange rates.

In this week’s Report:

• EU Summit fails to agree way forward
• Sterling/Euro rates near 8 month high
• GBP/USD rates fall as USD strengthens
• 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 an extremely volatile one for Sterling/Euro exchange rates, with wild swings in buying levels as events in the Eurozone affected the Euros value. On Thursday, the ECB decided to cut interest rates down to 1% whilst the Bank of England kept interest rates at a record low 0.5% and announced no change to its £275 billion asset purchase programme. This was widely expected, and there was little effect on the markets, in fact the Euro gained a little strength after the decision. This was not to last however, as ECB President Mario Draghi started an aggressive sell-off across the spectrum of risky assets, stressing that the central bank would not help with financing member countries’ debts and adding that the bank doesn’t see a high risk of deflation. Mr Draghi confirmed that the decision was not made unanimously.













Summit talks took place on Friday with EU leaders agreeing stricter budget rules for the Euro zone but failing to secure changes to the EU treaty among all 27 member states. Countries also failed to reach an agreement on giving a banking license to the Euro zone's permanent bailout fund, limiting its firepower.

EU central banks will provide €200 billion to the IMF to help fight the debt crisis, with the majority of the money (€150 billion) coming from Eurozone member states. Private-Sector Involvement (PSI) in shouldering future losses on member countries’ bond holdings will follow IMF rules, rather than the haphazard approach taken with Greece, and the operation of the European Financial Stability Facility (EFSF) and European Stability Mechanism (ESM) facilities will be turned over to the ECB. Separately, the European Banking Authority said EU banks will need to raise an additional €114.7 billion in new capital to help them weather the debt crisis.

Overall, this is a hugely disappointing outcome. These seemingly weak measures do not go nearly far enough, and as a result the Euro has weakened significantly, helping GBP/EUR rates remain high.

On the other side of things, Britain said it could not accept proposed amendments to the EU treaty after failing to secure concessions for itself. Analysts said while it may be positive for Sterling if a proposal from the EU for a tax on financial transactions did not impact the UK, there were also concerns that the UK would be left isolated, with much less influence in Europe. First impressions are that EU leaders have not quite shot themselves in the foot by alienating British support (even assuming it was ever offered) but it looks as though they have considerable ground to cover.

Sterling stayed close to an 8 month high versus the Euro on Friday, with a choppy morning session reflecting uncertainty over the outcome of a European summit that did little to impress markets overnight. The Pound looked on track to test its strongest level against the Euro since March as it benefited from investors seeking alternatives to the Euro. Even after all of this, investors still remain concerned about the risks facing the UK economy and its vulnerability in the event of a severe downturn in the Euro zone.

Do you need to buy or sell Euros? Send us a free enquiry now.

Sterling vs. US Dollar;

It has been a pretty flat week in the U.S with markets waiting to see what happens at the latest Eurozone summit.

The American economy has been experiencing a period of positivity recently with a raft of good data being released last week. The unemployment rate is at its lowest level in two and a half years, manufacturing appears to be picking up and early reports suggest that the holiday shopping season is off to a strong start. Slowly but surely the U.S seems to be heading in the right direction, which has been represented in the markets with rates holding at a relative low.













But any further gains for the Dollar have been held in check by the threat of major issues in the Eurozone. The U.S economic recovery could be derailed seeing as America's finances are so closely tied to what happens across the Atlantic and the picture is not rosy. The Eurozone is the single biggest customer for American goods, so if they're not buying, U.S. businesses suffer. "The situation in the euro area is rapidly deteriorating and contagion is spreading," said Pier Carlo Padoan, the chief economist of the Organisation for Economic Co-operation and Development (OECD).

Last week leaders holding all-night talks in Brussels added 200 billion euros ($267 billion) to their crisis-fighting war chest and tightened anti-deficit rules, which was hailed by European Central Bank President Mario Draghi as a “very good outcome.”

It is a waiting game to see what happens in the Eurozone but what we do know is that when Europe has problems they become everyone’s problems. A complete European meltdown could kick off a chain reaction that might lead to a global credit crisis. On the other hand we could see some sort of resolution that increases confidence in the Euro.

In a nutshell, it is events in the Eurozone that are driving GBP/USD rates. When there is uncertainty, investors flock to the perceived safety of the Dollar, and this in turn strengthens it, making it more expensive and pushing exchange rates down. If there is a resolution in the EU, it could reverse this flight to safety and we could see the USD weaken again, however it’s impossible to predict what affect global events will have on GBP/USD rates.

The fact of the matter is, things are on the edge whichever way you look at it. It is vital to keep in touch with your account manager at the Foremost Currency Group to make sure you keep abreast of the goings-on in the market. We can ensure that if you are buying or selling currency in the next 12 months you have all the information available and we can help you make an informed decision to making the most of your currency.

If you need to buy or sell US Dollars, send us a free enquiry now.

Weekly Economic Data that may affect exchange rates

Monday – There is no UK data today. Australia released Trade Balance figures, and Germany releases price index data. The main even is a monthly budget statement from the USA which could affect GBP/USD rates.

Tuesday – Today we have the first UK data of the week: House Price Data, Retail Price Index, and Consumer Price Index. In the Eurozone we will see German economic sentiment measures. Stateside there are Retail Sales numbers, Economic Sentiment measures and an interest rate decision where we expect the FED to leave rates unchanged at 0.25%.

Wednesday – Unemployment figures are released for the UK today in addition to earnings data. In the Eurozone Industrial production figures are of note. In the USA we will see import prices. Australia releases inflation forecasts also today.

Thursday – A very busy day for the UK and EU. Starting in Europe, we have German Inflation data, and EU wide inflation data. There is also a monthly report from the ECB that could affect the Euros value. We then see further EU inflation numbers and unemployment data. On to the UK, there are Retail Sales to watch for in addition to Construction data. Stateside, Jobless measures and inflation data will be watched closely.

Friday – We end the week with Consumer Confidence numbers for the UK, Trade Balance figures are also released today. The USA and Canada both release measures of inflation.

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.