Pound/Euro exchange rate forecast outlook

Monday 19th November 2012
Good morning. Another Monday morning, so let's take a retrospective look at what happened with exchange rates this week. In today's post I'll also look at some of the tools you can use to protect against exchange rates moving against you.

In this week’s Report: 

• Bank of England warns of triple dip recession
• Greek bailout casts shadow over Eurozone 
• US Dollar strengthens 
• Round up of the week’s other data that may affect rates 

Sterling vs. Euro; 

After a crazy week on Sterling/Euro last week, many people will be looking at this week a little unsure as to how their own requirements will play out. Many thought sterling would start to stretch its legs against the single currency as it started the week by pushing up to a 6 week high on the cross by Tuesday. 

This bullish run for the pound was, as often is these days, more of a dash than a marathon as BoE Governor Mervyn King poured his customary glass of icy water over the hopes of strong UK economic growth. By predicting that growth will follow a long and winding road, and saying there could be scope for further QE as it is only assessed every month and not forecasted; King and his MPC colleagues moved the market down over a point in a single trading session on Wednesday after their inflation report. 

It should come as no surprise that the pound fell on the back of Kings’ speech, as it is certainly not the first time. It is also no coincidence either; throughout the financial crisis a tenet of BoE policy has been to keep the pound weak to aid UK exports to both boost economic growth and support the UK’s payments deficit. We will find out even more detail from the central bank when they release their minutes of the last meeting, on Wednesday.

The effect of the Eurozone crisis on Pound/Euro rates

What Mervyn King cannot control however, is the performance of the much maligned Euro zone economy. Figures at the end of last week showed that the 17 nation currency area returned to recession and gave the weekly graph a kick in its tail with the rate forced up on Friday, just not quite as high as it got to on Tuesday. 

One of the reasons the rate did not drive further and may not do so is the closeness and interdependent nature of the UK and Euro zone economies. Although the Euro zone appears to be teetering on the edge of disaster and the UK has posted good growth for the last quarter, the short-term forecasts still do not expect a sustained sterling rally. 

Every bail out of sovereign states strengthens the Euro as investors take it as a signal of solidity in the euro zone and the threat of a Spanish bailout, an economy which dwarfs Greece’s, would potentially see a large swing in the Euros favour. 

How to protect against rates moving against you

So going forward, if you are looking to buy Euros you should consider placing a Stop Loss order.This is where you can instruct us to purchase your currency should it drop below a pre-agreed level. 

For example, if you have set your budget at 1.22 you can then take a bit of a gamble on rates getting better, but have a safety net in place should rates fall. This is a good way to approach the current market, as it means you don’t lose out on all the recent gains and can still trade at a reasonable level. 

Click here to find our more about our rates and service.

Weekly Economic Data that may affect exchange rates 

Monday – Rightmove releases the latest UK House Prices this morning showing how that sector is performing. Eurozone data includes Italian Industrial Sales & EU wide construction output. We may also see news on Greeks latest bailout. Over in the United States we have House prices. 

Tuesday – There are no UK releases today. In the EU we have German inflation data and the EcoFin meeting. Further afield we have the latest minutes from the Reserve Bank of Australia. 

Wednesday – Quite an important day for the UK as we have the BoE minutes from the latest MPC meeting, which will show the discussions regarding Quantitative Easing. There are no EU releases of note. USA data today comprises of Jobless Claims, Mortgage Applications and a Consumer Sentiment survey. 

Thursday – Fairly quiet in the UK today with only a minor industrial trends survey being release. There is a host of inflation numbers from across Europe that could affect GBP/EUR rates however. There is also an EU consumer confidence survey. 

Friday – Mortgage approvals is the only notable release from the UK this morning. In the EU we have German GDP figures and a European Council meeting. There is nothing of note from the US.  

Getting the best exchange rates 

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you. 

 It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

 Click here to send me a free enquiry

Pound/Euro rates fall on BoE Inflation report. Forecast.

Wednesday 14th November 2012 

Good afternoon everybody. It’s been quite a mixed week so far in the currency markets, with big swings in the Pound/Euro rate along with other currencies. As the week started, Sterling was at a 6 week high against the Euro, and things were looking very good for Euro buyers. As is often the case with sharp upward spikes however, it was not to last. By Wednesday, a dire report from the Bank of England took the wind out of the Pounds sails, and we saw GBP/EUR rates drop by over a point.

In today’s report I’m going to take a look at what caused the Pound to fall, and what the events in the EU may mean for rates going forward.

Sterling/Euro highs were not to last 

Sterling hit its best rates against the Euro in 6 weeks recently after the Bank of England left interest rates and the size of its bond-buying programme unchanged, as outlined in my last post. The decision had been broadly expected by most analysts after a great run of UK data.

However the gains were not to last, firstly due to a dire report from the Bank of England this morning, and fears over what effect the deepening EU crisis will have on the Pound. Let’s take a look at what the Bank of England governor said and what effect it had on Sterling.

Pound falls after BoE Inflation report 

This morning, Sir Mervyn King gave the latest Bank of England inflation report, and during this he has downgraded the growth forecast and warned the economy will be below pre-financial crisis levels for the next three years as it continues its recent "zig-zag'' pattern. The comments did not bode well for Sterling.

Often when Mervyn gives a speech he talks the Pound down, and today was no exception. He said that the Pound/Dollar rate had gained by 8% and the Pound/Euro rate by 12% in recent times, and that these gains were unsustainable. I think he is worried what effect the strong Pound will have on exports, and so purposefully caused some weakness to try and drive the economy.

In the report he said that the Bank of England expects GDP growth of just 1% in 2013, and also said that inflation would to fall back towards the Government's target of 2% in the latter part of next year.

“There seems a greater risk that the UK economy may be in a period of persistent low growth,” Sir Mervyn said. He added that the outlook for inflation was the main reason why the policymakers decided to stop the purchases of gilts - or quantitative easing - in November. There is a real chance more QE could be on the cards however in December or early next year, so those that need to buy Euros should seriously consider their position now.

EU fears could also affect Pound/Euro rates

Little sign of a recovery in the euro zone any time soon is likely to weigh on the single currency against sterling. Weakness across the board would normally cause GBP/EUR rates to rise, however there are real concerns about whether the UK's economic recovery can be sustained, given a deepening recession in the euro zone which is one of our key trading partner.

If the EU economy continues to struggle, then it’s going to affect the Pound and this could keep rates in check.

The Greek economy is doing very poorly. It shrank 7.2% in the third quarter compared with the same period a year earlier, and has now been in recession since late 2008. They’ve had 2 bailouts from the EU and IMF, and there will probably be more to come.

Eurozone finance ministers will meet next week to discuss releasing the latest 31.5bn euros as they seek agreement on how to make Greece's debt sustainable going into the next decade. In the shadow of all of this, workers across the European Union are staging a series of protests and strikes against rising unemployment and austerity measures. General strikes in Spain and Portugal have halted transport, businesses and schools, and led to clashes between police and protesters in Madrid. Smaller strikes were reported in Greece, Italy and Belgium, and rallies were planned in other countries.

Summary 

Many clients are convinced that the problems in EU will drive rates back towards the 4 years highs of €1.28 we saw in the summer. I don’t agree with this. These were the highest rates for years, and despite much better expected UK data we have failed to get back to them.

Rates have fallen further this week due to fears over the UK economy, so if I needed to buy Euros I would give serious consideration over what to do now. We are still trading comfortably above the 1.20 level, and this time last year rates were as low as 1.13. Holding out for more gains could easily mean you lose out.

A wise strategy in this climate would be to place a Stop Loss order. This is where you can instruct me to purchase your currency should it drop below a pre agreed level. For example, 1.22. You can then take a bit of a gamble on rates recovering, but have a safety net in place should rates fall. This is a good way to approach the current market, as it means you don’t lose out on all the recent gains and can still trade at a reasonable level.

If you're looking for the best exchange rates, or just want to have a chat about the options open to you, then send me a free enquiry by clicking below. There is no cost or obligation involved, and you could be very surprised on how much you can save through the commercial rates I can source for my clients.  
 
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Pound/Euro exchange rate forecast November 2012

Monday 12th November 2012
Good morning everyone. As usual for a Monday, today I'm going to take stock of last weeks movement in exchange rates, look at why GBP/EUR rates have climbed. In addition I will analyse what may happen in the coming weeks to affect the rate, and of course as usual give you a detailed breakdown of economic data releases that I think will affect exchange rates this week.

In this week’s Report: 

•  Pound/Euro rates hit 5 week high
• Eurozone growth forecasts could affect UK 
• Round up of the week’s other data that may affect rates  

Sterling vs. Euro; 

Pound/Euro rates had a very good run indeed last week, with Sterling hitting a 5 week high against the Euro. In this report we will look at the reasons rates have increased, and look at what the coming weeks and months may hold for the Sterling/Euro cross.

First things first; Why have Pound/Euro rates gone up?

The main reason for the gains was the fact the Bank of England left interest rates on hold, and the size of its Quantitative Easing bond-buying programme unchanged. The decision had been broadly expected after recent strong UK third quarter growth figures, however some investors had positioned themselves for more QE, so when this didn’t happen the Pound gained strength as a result, pushing GBP/EUR rates up.

Only a few weeks ago, everybody convinced further QE was pretty much a given, and that it would happen the first week in November. In the last few weeks however, we have seen very robust UK data, including the fact the UK came out of recession recently, growing 1% between July and September.

However, a succession of poor economic indicators and corporate results has led many observers to believe that the economy is still weak, leading to speculation that more QE would be needed, just not right now. Indeed, the minutes from the last MPC meeting in October showed that some members thought more QE would be required at some point in the future.

All in all, for the moment the UK’s economic position looks relatively healthy, and this is the main reason for the strong Pound at present.

Pound/Euro rates also being driven by events in Europe 

The European Central Bank (ECB) also decided to keep rates on hold at 0.75%, with President Mario Draghi saying a euro zone recovery is likely to be slow and gradual but solid. Explaining the decision, he said that economic activity in the euro area was "expected to remain weak".

The weak data coming out of the Eurozone is another reason for the gains in the GBP/EUR rate. As the Euro weakens it becomes cheaper to purchase, pushing rates up. This was compounded on Thursday when data showed German exports fell in September at the fastest pace in nearly a year, raising concerns about the effects of the euro zone crisis on Europe's largest economy.

The European Commission has also cut its 2013 growth forecast from 1% to just 0.1% and said it expected unemployment to continue rising next year. This is stoking fears that the Eurozone crisis is far from over, and has caused further weakness in the Euro.

So if the Euro weakens GBP/EUR rates will continue to rise? 

Not necessarily. It’s extremely important to remember that around half of Britain's trade is with Europe. If the revised growth forecasts are accurate then this could have a significant effect for the UK in terms of our exports. While the UK is enjoying growth and a strong pound, weakness in the Eurozone could easily cause investors to also shun the Pound, and this is what is keeping GBP/EUR rates in check. Indeed on Friday rates stopped climbing and started to drop back away, indicating we had already hit the peak on Thursday afternoon.

Regardless of whether you need to buy or sell Euros, there is so much going on in the currency markets that rates could move either way in the coming weeks. In the last few weeks alone rates have fluctuated by over 2.5%, meaning a €250,000.00 purchase has differed in price by over £5000.00 in just a few weeks, clearly showing how quickly things can change and the impact it can have on your currency requirement.

If you need the best exchange rates, the first step is to contact us to have a free consultation. We can then let you know the options available to you, making sure you are not caught out by adverse exchange rate movements, and ensure you make the most of your currency.

Click here to send a free no obligation enquiry now. 

Weekly Economic Data that may affect exchange rates 

Monday – We’re fairly light on data releases today as it’s a market holiday in America and France. We do have some German Whole sale prices in addition to the Eurogrup meeting, which is attended by Finance Ministers of each Member State of the euro area. There are no UK releases of note. 

Tuesday – UK data today comprises of House prices, Retail Sales, and a raft of the latest inflation numbers. We also have inflation numbers from France, Germany and Europe. Also in the EU we will see the latest Economic Sentiment surveys. In the USA we have a monthly budget statement and a Business Optimism survey. 

Wednesday – Various UK releases today including Average Earnings, Unemployment, Jobless Claims, a BoE Inflation report and a Speech by Mervyn King. Expect volatility in the value of Sterling today. In Europe we have French Inflation, Spanish Unemployment & GDP, in addition to EU wide Industrial Production. Stateside we have Retail Sales, Inflation data, and the latest minutes from the FOMC. 

Thursday – Another important day for GBP/EUR. Starting in the Eurozone, we have GDP numbers from Spain, Germany, Italy and France. We also see EU wide inflation numbers. In the UK the only release today are the latest Retail Sales numbers, which are a good barometer of overall economic activity. Over in the USA we have inflation numbers, Jobless Claims, Manufacturing numbers, and speech’s by various members of the Federal Reserve. 

Friday – We end the week on a quieter note, with nothing released from the UK. There are global Trade Balance numbers from Europe however that could still affect Pound/Euro prices. Industrial Production numbers from the states round off the week.  

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.  

Click here to send me a free enquiry

US Election effect on exchange rates / GBPEUR hits new high

Wednesday 7th Novmeber 2012
Good afternoon everybody. Things have moved around in the currency markets quite a bit today. We've had the US election dramatically affect the value of the US Dollar and riskier currencies. We have also seen Pound/Euro rates hit a new one month high due to poor UK data. In my post today I'll take a look at the election, then the Pound/Euro situation. I'll also have a quick look at Thursdays central bank decisions and how this might affect exchange rates going forwards.

US Election – effect on exchange rates

It dominated the news today, so I’m sure you all know that Barack Obama has won a second term as president of the United States. There are many sources where you can read about the election, so here today I will only focus on the effect it has had on exchange rates.

 Effectively, it has weakened the US Dollar significantly, and pushed rates up above $1.60 before falling back away. The reason the USD weakened is the fact is was sold off fairly comprehensively once the results were known. This is because the victory for Barack Obama in the U.S. presidential election is seen ensuring easy monetary policy.

It has calmed the markets now there is more political certainty, and the fact Obama won means economic policy will remain the same and the Federal Reserve's easy monetary policy is likely to stay for some time to come. This weighed on the dollar and gave a boost to commodity currencies such as the Aussie Dollar and Canadian Dollar. Gains were limited however over a little uncertainty over Thursdays Bank of England decision, which I’ll cover in more detail in a moment. First, the Euro…

Pound hits new 1 month high against Euro 

Initially when the markets opened on Wednesday Pound/Euro rates dropped back away. This was due to the move into riskier currencies, as I mentioned in the election paragraph above. This gave the Euro some strength and it became more expensive to buy.

The drop didn’t last long though, as at 10am this morning we saw the latest German Industrial Production figures, and they were far worse than expected. The German industrial output data also lowered growth forecasts from the EU Commission, and this weighed on the single currency ahead of a crucial Greek parliament vote on reforms.

The net result? A weakening Euro and a spike of nearly one sent from the low to the high today. This shows how quickly things can change in the markets, and on a purchase of €250,000 today, the cost has varied by £1600.00 this afternoon alone. It’s good news for Euro buyers, as rates are the best in over a month, and only a few points away from the best in over 4 years. If you need to buy Euros in the next 6 months, get in touch with me by clicking here.

Bank of England announcement Thursday 

The next main event is the Bank of England decision on interest rates and Quantitative Easing at midday Thursday. A few weeks ago, everybody thought it was certain more QE would be announced. In the last few weeks though, better UK data has greatly reduced the chance of this happening.

Of course nobody knows for sure, and some MPC members are split on what to do. The reduced chance is the reason the Pound has strengthened. Things can turn the other way very quickly though, so if they do announce further stimulus, expect the Pound to fall. Personally I think they will hold fire on more easing until early next year.

ECB also meet on Thursday

The European Central Bank also meets on Thursday and while no rate cuts are expected, growing evidence that they are in the midst of a recession is likely to boost expectations of more easing in the coming months. Watch out for the press conference at 13:30pm Thursday, as any comments positive or negative about the Euro could quickly affect GBP/EUR rates. That’s all for now, remember to send me a free enquiry if you need to secure the best exchange rates  

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

 It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.

 Click here to send me a free enquiry

Pound/Euro exchange rates best in a month

Monday 5th November 2012
Good morning. Pound/Euro rates have recovered well over the last few weeks, hitting their best in over a month. This is mainly due to a raft of better than expected economic data from the UK, lessening the chances of further Quantitative Easing and giving the Pound a boost. In today's report I'll take a look at what the forecast is for Sterling/Euro rates, and what data to look out for this week that could affect exchange rates.

In this week’s Report:

•    Pound/Euro rates hit one-month high
•    Pound performs well against a basket of currencies
•    Round up of the week’s other data that may affect rates

Sterling vs. Euro; 

Last week the pound rosewell  against the euro, hitting its highest levels since the beginning of October, breaking through the 1.25 level on Friday before finishing down around 1.2480 where we remain this morning. As well as the recent better than forecast GDP data showing the UK is no longer in a recession, we have seen mortgage, retails sales and consumer credit data all come out better than expected.

Less chance of Quantitative Easing from the BoE

All of these recent releases suggest there will be less chance of the BoE pumping more money into the economy via the QE program. (Pumping more funds into the British economy would effectively dilute the pound, bringing the GBP/EUR rate down). This was supported by MPC member Charles Bean last week who said he believed the successive rounds of QE by the BoE has led to a drop in bond yields and an increase in equity prices. However, he was less certain at this stage of the effect that lower yields will have on demand for government bonds and even stated there were reasons to believe the effect of lower yields in boosting demand may be weaker than usual.

These comments only corroborated the belief that he will vote against further QE at the November MPC meeting this Thursday. Another reason for the rise in exchange rates is the continued uncertainty around the euro countries’ ability to deal with the ongoing financial crisis and the doubts surrounding the future of Greece and Spain within the Euro. Spain reported a 5th successive quarter of negative growth, reporting a -0.3% contraction in Q3. This weakened the Euro and has compounded the increase in rates.

Spain's woes continue

Many analysts believe that the actual numbers from Spain could actually be much worse than the release suggests. This is because people were bringing forward purchases to avoid the VAT increase in September. This also helps explain the Spanish retail sales figures which were down by -10.9% when they only fell -2.0 in august.

Even with good news from the Eurozone, in the form of the German economic minister’s prediction that the German economy will grow by 0.8% in 2012 and 1% in 2013, the euro still failed to gain any significant strength. The UK just mirrored these predictions when The Confederation of British Industry raised its UK growth forecast to 1.4% in 2013 from a previous 1.3% forecast, and said growth in 2014 could reach 2%, meaning this had little effect on rates.

Looking ahead, the main mover of rates this week, other than the BoE and ECB rate decisions on Thursday, will be whether Spain will ask the EU for further assistance in the form of a bailout, which has been widely expected for some time. If Spain does secure a further bailout, it would actually be good news for the EU, and therefore we could see confidence increase in the single currency, strengthening it against sterling and pushing the rate down.

If you need the best exchange rates, send me a free enquiry now. 

Weekly Economic Data that may affect exchange rates 

Monday – We start the week with Spanish unemployment figures, Eurozone investor confidence measures and services PMI from the UK. We also have non-manufacturing PMI from the US. 

Tuesday – Focus will be on the US on Tuesday with the presidential elections taking place. We aslo have a raft of data from the UK and Eurozone. We start the day with Spanish and Italian services PMI followed by services PMI for the Eurozone as a whole. We then have manufacturing and industrial production figures from the UK with a ten-year bond auction. From the EU we have German factory orders. 

Wednesday – A quieter day for data releases on Wednesday, we have no data of note from the UK. In the US we have a ten-year bond auction and over in Europe we’ll see the release of German Industrial Production figures and retail sales for the Eurozone as a whole. 

Thursday – Another busy Thursday this week with key announcements from the Bank of England, including an interest rate announcement and a decision over another round of quantitative easing. There’s also a European Central Bank press conference coupled with an interest rate decision. From the States we have trade balance and unemployment figures. 

Friday – A quiet end to the week with minor data releases of little significance. From the US, we have consumer sentiment and inflation expectations. No data of note from the UK with French and Italian industrial production figures from the Eurozone.  

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.  

Click here to send me a free enquiry

Better UK data boost Pound, but not against Euro

Wednesday 31st October 2012
Good afternoon. Sterling rose against most currencies through trading today, but remained fairly flat against the Euro at around the €1.24 level. The reason for the gains is the fact we’ve had some decent and robust UK data releases recently, reducing the chances of further Quantitative Easing in the UK. This afternoon I’ll take a look at the better UK data and what the forecast is for Pound/Euro rates moving forwards.

Better UK data boosts the Pound. 

Following last week’s much better than expected UK GDP figures confirming we are no longer in recession, Sterling has performed quite well. In addition, we have also seen much higher than forecast numbers from other releases such as consumer credit, mortgage data and CBI retail sales data, all of which were much better than most had been expected, and mean the outlook for the UK economy is now looking much rosier.

All these better numbers mean there is now much less chance of further monetary easing from the BoE next month. It also means investors are much more confident about investing in the Pound, and that is what has caused Sterling to rise against most other currencies.

Why hasn’t the Pound risen much against the Euro? 

It’s mainly due to the fact it’s the end of the month. There was big demand for buying the Euro as global banks wind up their positions for month end, and the European Central bank also had huge demand for Euros today, which has kept the single currency strong and hindered any significant gains for the GBP/EUR cross.

Moving forwards, I believe that the Euro will actually weaken somewhat in the coming weeks. While the UK has returned to growth, in the Eurozone growth is in decline. In particular Germany which is the EU’s largest economy is starting to slow, and this combined with the on-going debt crisis could well cause Euro weakness and help push GBP/EUR rates back up as we head in to November.

Less chance of QE from Bank of England 

Due to the better data as highlighted above, many think there is now less chance of Quantitative Easing from the Bank of England next month. This could indeed be the case; however some BoE policymakers have flagged a weaker outlook for growth in the fourth-quarter.

Purchasing Manufacturers' Index data for manufacturing, construction and services are due this week and next week will be watched for an indication of UK economic health into the fourth quarter. Once these numbers are released, the likelihood of further stimulus or not will become much clearer.

If you need to buy or sell Euros, should you do so now or wait? 

This is what everyone wants to know, and of course it is impossible to predict which way rates will go. On the one hand, if the Euro does weaken and UK data continues to impress, rates are likely to recover back towards €1.25. If however the next raft of UK data is not as good as expected and more Quantitative Easing is announced by the BoE, the Pound would likely weaken significantly.

In the current climate, regardless whether you are buying or selling Euros, Stop Loss and Limit Orders are very useful tools. These allow you to place a lower level and if rates drop below this, your currency is automatically secured and your rate fixed. In this way you can continue holding out for any gains, however if the market drops you are not left exposed.

A limit order allows you to place a target level above the current price, and if rates go through this your currency is purchased. This allows you to take advantage of any spikes without having to continually monitor the market.


Get in touch now for a free consultation

I can discuss your currency requirements and the timescales you are working to, and then run over the options that are available to you to help protect you against adverse exchange rate movements. In this way you can take control of your currency requirement and not simply hope that the market will move in your direction. By employing a strategy and giving yourself a target rate, you can often save significant sums than just leaving things to chance. I look forward to hearing from you.   

Click here to send me a free enquiry

Pound/Euro rates climb after good GDP data

Monday 29th October 2012
Good morning. The Pound/Euro rates climbed nicely last week when UK GDP figures confirmed we are out of recession. Today I'll have a look back at the events of last week, look at what might happen with exchange rates going forwards, and as usual round up the weekly economic data that could affect exchange rates in the short term.

In this week’s Report: 

•  Pound/Euro rates hit 3-week high 
• UK finally out of recession – GDP grows 1% 
• A volatile week for the Pound/Dollar cross 
• Round up of the week’s other data that may affect rates 

Sterling vs. Euro; 

The pound surged last week on the back of a hugely better than expected GDP swing of 1.6% quarter on quarter, showing an initial estimate of a full 1% growth in the UK for Q3 2012. Though this figure is sure to change as the final figures are more accurately calculated, the realisation that the UK had exited recession was more than enough to send its currency on a rally.

This caused Pound/Euro rates to surge nicely at the end of last week. Forecasters still expect a Euro rally in the wake of any request by the Spanish Government for financial assistance from the EU, but as yet this still hasn’t happened. In the absence of serious support for the Euro as the Spanish continue to tap-dance around the bailout, the pound was free to strengthen nearly 2.5 cents unabated in a day and a half after the GDP report.

This quick movement shows how easily gains can be made and lost on the currency market; those who were holding off selling their Euros whilst waiting for the Spanish Bailout lost nearly £3000 on an average second home sale price of €180,000. Of course one man’s loss is another’s gain with those looking to buy in the Euro zone have benefited from this sharp spike. Experience teaches us that spikes are often just that, with correcting movements seeing rates move the opposite way very quickly.

One way of trying to make sure you catch a spike in your favour is by using our services. Unless you have the time and inclination to sit and watch a prices screen day in day out, the free services we provide mean you always have eyes and ears on the market that can inform you as soon as the rates move.

With the wide array of currency contracts available and state of the art trading facilities we can cover your bases for your currency needs when buying, selling or servicing overseas properties as well as any foreign invoices your company may need to pay. Consultations with us are free, as are trading facilities which carry no obligation.

Click here to send me a free enquiry now.

Weekly Economic Data that may affect exchange rates 

Monday – A relatively quiet day for data releases to start the week. We have Net Lending figures from the UK along with inflation figures from both Germany and the US. 

Tuesday – A quiet day for data releases in the UK today. In Europe, the president of the ECB Mario Draghi gives a speech. We also have a ten-year Italian bond auction. It may be an interesting day for the GBP/EUR cross. From the States we have consumer confidence measures. 

Wednesday –We have consumer confidence figures from the UK today and a raft of inconsequential data from the Eurozone, including the general unemployment rate and inflation measures, both of which should have little impact on exchange rates. 

Thursday –As was the case last week, Thursday will be an interesting day for data releases. We have manufacturing PMI from China, the States and the UK along with unemployment figures from the US and house price data from the UK. 

Friday – We end the week with Canadian and American unemployment figures along with Spanish and Italian PMI data.  

Getting the best exchange rates

You want the best exchange rates, of course you do. That's why you're reading this blog to try and gauge your timing. Take the next step and send us a free enquiry and have a consultation on all the options available to you.

It's free, it doesn't obligate you, and you may be surprised how much you can save by using us to get exchange rates that are up to 5% better than offered by banks. Click below to send your free enquiry now, and get a response the same day.  

Click here to send me a free enquiry