Wednesday 31st July 2013
Good afternoon. Sterling has not had a very good run in the last few weeks, and exchange rates have continued to fall since my last post. This is a bit of a surprise, as the most recent economic figures for the UK have actually been pretty good. It’s all down to speculation on what the Bank of England will do with interest rates, and in today’s report I will explain why the Pound has been falling against the Euro to the lowest rate since February. In today’s post:- Why the Pound has fallen against the Euro
- How will the Bank of England move forwards?
- What data releases could affect rates in the next week?
- Find out how good our exchange rates are.
Why the Pound has fallen against the Euro? The Pound has fallen to its lowest levels since February, and at the time of writing GBP/EUR rates sit at 1.1425. Just a few months ago rates were approaching 1.20. In some respects it’s quite a surprise the Pound has fallen as there have been some decent economic numbers out of the UK. Let’s take a look at these in more detail… 
Above shows the decline in GBP/EUR rates over the last 3 months. Last week we saw the latest UK GDP figures. These showed that the UK economy is "on the mend" after figures showed it grew by 0.6% in the three months to June. The latest growth estimate implies that the economy has now recouped almost half of its total 7.2% contraction during the 2008-09 recession, with output remaining 3.3% below its pre-recession peak. Great, so good growth means a strong Pound, right? Not necessarily, and this hasn't been the case this week. The growth figure was in line with market expectations, and share prices on the London Stock Exchange did not react to the news. However, the pound did drop on the currency markets. This was partly due to some market participants believing the data may support further monetary intervention by the Bank of England. Mostly though, the numbers gave little reason to buy the Pound. Some thought the figure would be above 0.6% and because the numbers weren’t a surprise, Sterling lost value. This trend has continued with the Pound falling most days since, mainly due to speculation on what the Bank of England will do to keep growth going.Are you buying or selling Euros? Worried about rates moving against you? Looking for the very best exchange rates? Click here to send me a free no obligation enquiry now. How will the Bank of England move forwards?
At the most recent bank of England meeting all 9 members voted against more Quantitative Easing. This indicates that in the short term at least, there will not be any further money pumped in to the economy. Again you would think this would strengthen the Pound, but you have to look at what other tools are left in the box now QE is off the table. The tool kit is very thin to say the least! Another good explanation for the drop in rates is speculation the Bank of England are going to announce tomorrow (Thursday) some "guidance" on the future of interest rates; specifically, that it will set out a framework to keep rates at near-zero levels for up to 4 years. So, investors are dumping the Pound ahead of this. Keeping rates at near zero is all they can do. 
This would mean little return for anyone holding Sterling, and so despite better economic figures, the Pound has fallen as a result, and could well continue to do so. At 12pm tomorrow we will see the latest decision from the BoE on interest rates and QE. While I don’t expect any change for either, watch for any accompanying statement from the governor that may dictate future moves, as this could impact on the value of the Pound. In 2 weeks’ time we will see the minutes from tomorrow’s meeting to see how the 9 members voted, and if all 9 are still against QE. Click here to get a free quote on exchange rates. What data releases could affect rates in the next week? Thursday 1st August – The BoE and ECB both announce their interest rate decision. There are also some inflation numbers from the Eurozone. IN the USA we have jobless numbers and inflation data. Friday 2nd – We will see UK House prices today, which are a good barometer of overall economic activity. Most data today however is from the USA – Non Farm Payrolls, Earnings and Unemployment data. Monday 5th – Lots of numbers from the Eurozone today, mostly comprising inflation, but also Retail Sales and investor confidence measures. The UK releases its Retail Sales numbers. Tuesday 6th – Today is busy in the UK, with Industrial Production and Manufacturing numbers being release, in addition to Trade Balance numbers. At 2pm we have a GDP estimate, which could well move the Pound. Wednesday 7th – It’s the Eurozone’s turn for Import and Export numbers today. The only UK data of note is House Price data. And the Bank of England inflation report. To find out how data releases could affect the currency you need to buy or sell, click here for a free consultation. Find out how good our exchange rates are. - Are you buying Euros?
- Converting Euros back to Sterling?
- Looking for the best exchange rates?
- Buying or selling property abroad?
- Have business requirements to take or make payments in a foreign currency?
If you have answered yes to any of the above questions, I can help you achieve much better exchange rates than you can get at the bank. We trade amounts from £5k+ on a bank to bank basis, at rates up to 5% better than the banks. In addition to better rates, we can also help with various contract types that can help protect against adverse rate movements, or help you target a rate not currently achievable. Most importantly though is my market knowledge. With over 10 years in the FX industry, I can help explain what is moving exchange rates in order to help you make an informed decision on when to fix a level. Click here to make a free enquiry with me now and find out more.
Tuesday 23rd July 2013 Good afternoon. It’s very quiet in the currency markets at the moment, with the media hype currently focusing on the Royal baby and a lack of any significant economic data releases. The Royal baby news had the same impact on the markets as the announcement that Peter Andre and partner are expecting – none whatsoever! So in today’s report I will have a look at the most recent UK news that has helped Sterling, and a look at what other releases we have this week that might affect the currency markets. In today’s post: - UK Recovery set to gather pace in 2014
- Government borrowing falls helping the Pound
- UK Growth figures released this Thursday
- How to get the best exchange rates
UK Recovery set to gather pace in 2014 
The UK's recovery will gather pace into next year, as exports and business investment help to boost the economy, Ernst & Young's Item Club has predicted. The forecasting group predicted that UK economic growth would be 1.1% this year, rising to 2.2% next year and levelling out at about 2.5% thereafter. These are fairly positive numbers and will do no harm to the Pound, however they also acknowledged that growth currently remains reliant on consumer spending and the housing recovery. Spending all relies on confidence, and the good economic news of late has bolstered this, and the good weather has also boosted retail sales recently, all of which has given the Pound a push. "With consumer confidence returning and the government's initiatives to stimulate the housing market bearing fruit, consumers are switching their attention back from saving to spending," the report noted. Elsewhere in America there is the risk of possible market reaction to the end of the Federal Reserve's monetary stimulus programme. This could strengthen the US Dollar and push rates down below the $1.50 mark again. Also, in China there is the risk of an abrupt slowdown in its economy. This would weaken the antipodean currencies such as the Australian Dollar, which could give GBP/AUD rates a lift. The other impact of a slowdown in China could be a strengthening of the Pound. This is because a successful re-balancing in China is expected to help the UK reduce its trade deficit in two ways - through more Chinese demand for UK exports of consumer goods, and less Chinese competition for the UK's imports of raw materials used in the construction industry. All in all the Pound has risen nicely since last week, however in the last few days has been very flat indeed. There have been no significant releases of note, so for the time being Pound/Euro remains range bound between 1.16 and 1.1650. Find out more about our exchange rates. Government borrowing falls helping the Pound Figures released this week shows that government borrowing fell in 2012-13. Public sector net borrowing was revised down to £116.5bn. It means that total borrowing actually fell, by £2.1bn, from the year before, contrary to a previous estimate in May. The Office for Budget Responsibility (OBR) has forecast that total borrowing in the current fiscal year, excluding the effect of financial interventions and the deal with the Bank of England, will be about £120bn, or 7.5% of GDP. The lower figures also lent some support to the Pound. UK Growth figures released this Thursday 
The main data release this week will be Thursdays GDP numbers. The Gross Domestic Product released by the National Statistics is a measure of the total value of all goods and services produced by the UK. The GDP is considered as a broad measure of the UK economic activity. I expect the Quarterly figure to show growth of 0.6%, and the year on year figure to show growth of 1.4%. These forecasts will already have been priced in to where exchange rates stand, so if the actual number is higher than this, expect Sterling to make gains. If the number is lower, expect a drop in exchange rates. Other than some EU inflation numbers tomorrow, the GDP numbers are the most important release of the week in terms of what will affect exchange rates. How to get the best exchange rates 
If you are reading my blog, the likelihood is that you are looking to achieve the best exchange rates to convert one currency to another. The rates I can source are up to 5% better than the banks can offer, so why not make a free enquiry today to see how much you can save. In addition to better rates, we have various contract types such as Stop Loss and Limit orders, and Forward contracts. These types of contracts can protect you against exchange rates moving against you, and help you achieve the best possible rate within your time frame. To find out more about my services, including how the above contracts work, send me a free enquiry today. It costs nothing and carries no obligation, and simply means you can have a free consultation on your particular currency requirement. In this way you can make an informed choice about what type of contract to take and when to fix your rate. This, coupled with our commercial exchange rates could save you thousands of pounds. Click here to make a free no obligation enquiry now.
Wednesday 17th July 2013 Good afternoon. It’s been an interesting week for Sterling exchange rates, with GBP/EUR falling to its lowest in more than 3 months, before recovering on positive news from the Bank of England this morning. In today’s post I’ll take a look at what has caused the swings in exchange rates. Pound hits 3 month low vs. Euro 
Earlier this week, poor inflation figures pushed Sterling lower, dropping into the €1.14’s against the Euro, which is its lowest in more than 3 months. The reason the Pound weakened is that the economic numbers lent support to the case for more monetary stimulus from the Bank of England. It has been speculated for some time now, that the new BoE governor would pursue aggressive Quantitative Easing, which would weaken the Pound significantly. This view was not to last however, as today we saw the latest minutes from the Bank of England’s (BoE) Monetary Policy Committee (MPC) meeting. Bank of England’s MPC vote unanimously to hold QE and interest rates, causing a surge in exchange rates. 
This morning at 09:30am, the minutes to the decision a few weeks ago to hold off QE were released. These showed that the Bank of England had voted unanimously against increasing its quantitative easing programme at its latest meeting, sending the Pound higher. 
As you can see from the clear spike in today’s GBP/EUR chart, the news immediately sent Sterling over a point higher against the Euro, lifting the Pound from its recent slump. Looking for the best exchange rates? Get a quote now. UK Unemployment Also sending the Pound higher was the news that UK unemployment fell by 57,000 to 2.51 million in the three months to May, the Office for National Statistics said. Ministers said it showed that recovery was taking hold, but critics said the human costs were still too high. It seems that even with low growth rates, the UK economy can create jobs. Since this time last year about 300,000 more people are in work. And that continues to surprise economists. In past economic downturns. Unemployment has risen much higher - and fallen very slowly. The better figures, combined with the BoE vote, has helped the Pound recover and exchange rates have risen as a result. Summary Things can turn around very quickly in the currency markets, and this is what we have seen today. Doom and gloom and a 3 month low has turned into economic optimism and a strengthening Pound, all within 24 hours. If you are looking for the best exchange rates to buy or sell a foreign currency, send me a free enquiry today. I can discuss your requirements, explain what is moving exchange rates, and help you to decide when to fix your rate. When that time comes, I can help you achieve rates of exchange that can be up to 5% better than available at banks and other financial institutions. When converting a large sum, using my services can save you thousands of pounds. How much could you save? Send me an enquiry now to find out.
Friday 12th July 2013 Good morning readers. Apologies for the blog being quiet for the last fortnight; I’m just back from a few weeks in Fuerteventura, and so today I will take stock of how the major currency pairs have performed over the last few weeks, and take a view on what the forecast is for Pound/Euro rates along with other major currencies. In addition to looking at the outlook for Sterling exchange rates, I’ll list the main data releases for the next week that may affect exchange rates. In this week’s report: - UK Interest Rates to remain on hold for foreseeable future
- Will Pound/Euro rates rise or fall this summer?
- Pound/Dollar rates drop below $1.50 before recovering
- Central Banks likely to continue Quantitative Easing
- Pound held back despite better economic data
How has Sterling performed, and where are GBP/EUR rates headed? In the last few weeks, the pound had fallen sharply against other currencies after the Bank of England warned that markets were wrong to assume that it would start raising interest rates soon. The fall came just over a week ago when the Bank of England held interest rates at 0.5% and kept its quantitative easing programme (QE) unchanged, which was expected. The decisions were made at the first meeting of the Bank's Monetary Policy Committee since Mark Carney took over as governor from Sir Mervyn King. Next Wednesday we’ll see how the members voted, and whether Carney followed King on voting to increase its asset purchasing programme. The MPC said that the recovery "remains weak by historical standards and a degree of slack is expected to persist for some time". 
With interest rates expected to remain low for longer and the chance of more monetary stimulus, the pound became less attractive on currency markets, sending sterling lower against other currencies and pulling rates down. The pound also fell sharply against the euro, but has now recovered somewhat after the European Central Bank committed to maintaining its interest rates at or below their current level for an "extended period of time", sending the euro lower against all currencies. Releasing a statement alongside the decision is new; Mervyn King didn’t used to do that. IN doing so despite there being no change in policy is significant, as it suggests that further quantitative easing is likely and interest rates will remain low for the foreseeable future. This will keep the Pound weak. Many of my clients are expecting rates to rise, and if you take the recent improvement in economic data from the UK alone, I would agree. However the markets are more complex than that. Sterling is being held back global investors, as the view is that the British currency will continue to offer very little return of interest. Couple this with the threat of more QE along with low interest rates, and I would expect rates to fall in the next 3 months, before recovering later in the year. If you need the best exchange rates, click here to send a free enquiry now. Pound/Dollar rates drop below $1.50 before recovering 
The pound didn’t just fall against the Euro – in the last few weeks it fell below $1.49 against the dollar, close to a three-year low, as markets digested the prospect of UK interest rates staying at 0.5%, and the strengthening US economy. The slide began with the Bank of England saying rates could stay flat. 
I write this blog to keep existing and potential clients informed what is moving exchange rates, and to give my view on what may happen in the future. Hopefully the insight I provide can help to make an informed decision on when to fix an exchange rate. We don’t just provide information however – we also provide commercial rates of exchange to private and business clients that are often up to 5% better than the banks. So why not find out how much we could save you? You can click here and have a free consultation on exchange rates, and discuss the options available to you to help you make the most of your currency. Combined with the exchange rates we provide the savings can be enormous. Click here to send me a free no obligation enquiry now. Economic Data releases for the next 7 days 
Every day economic data is released across the world, and is often the most common thing that affects exchange rates. Below I list the main data releases for the coming week that I think could affect exchange rates. For a free consultation on how these released could affect your particular currency requirement, send me a free enquiry now by clicking here. Monday – It’s a very quiet start to the week, with no data of note from the UK or EU. Over in the States, we have Retail Sales which are a good overall barometer of economic activity. In New Zealand we have inflation numbers which could dictate future interest rate movements. Tuesday – In the UK today we have a raft of inflation numbers, Retail Sales, the Bank of England inflation letter and a speech by one of the MPC members, so a few things that could affect the value of Sterling. In the Eurozone, inflation numbers come at 10am followed by Trade Balance numbers. There are also measures of Economic sentiment from Germany. In the USA we have further inflation numbers along with industrial production figures. Wednesday – Today is the most important one for Sterling. Firstly we have the Bank of England minutes showing the voting and discussion for QE. Released at the same time are the latest unemployment figures, so I expect a choppy day for the Pound. There is nothing of note from the EU. In Canada we have an interest rate decision, and in the USA we have figures from the housing and building sectors. Thursday – The only UK data of note today is the latest Retail Sales numbers. In the United States we have unemployment and jobless numbers, along with some manufacturing figures. Friday – We end the week with German Trade Balance Data, UK Public Sector Borrowing and inflation numbers from CanadaHave a free no obligation consultation on exchange rates. Click here.
Friday 28th June 2012 Good afternoon. The last week has seen the Pound/Euro exchange rate fall away as I have been predicting could happen for a few weeks. Sterling also fell against other currencies, due to data showing the UK economy is not quite as healthy as thought. In today’s post I will look over what has caused rates to move recently, what data is coming this week that might affect rates, and look at ways you can protect against the exchange rate moving against you.- Pound weakens following revised growth forecasts
- New Bank of England governor takes over this week
- Announcement due Thursday on QE and interest rates
- Where GBP/EUR and GBP/USD could go in coming months
- Getting the best exchange rates
Pound weakens following revised growth forecasts 
There was a revision to UK GDP this week, which is an overall measure of growth in the economy. The numbers were both good and bad news. Let me explain. The ONS periodically updates its previous measures of growth, and they have said that growth was flat in the first quarter of 2012, revised from an earlier estimate of a 0.1% contraction. This means that the UK economy did not experience a double-dip recession at the beginning of 2012. That was the good news. However the revised figures showed that the economy is now estimated to have dropped by 7.2% from peak to trough, against a 6.3% fall previously recorded. That means that GDP in the first quarter of 2013 was 3.9% lower than its peak in the first quarter of 2008 - previously it was estimated to be 2.6% below. So in a nutshell this means that the UK had fallen deeper into recession than previously thought, meaning we therefore have further to go to recover lost ground. So what does all this mean for exchange rates? Well after the numbers were released, Sterling fell quite sharply against other currencies. This is due to the fact the economy is not as healthy as previously thought, and increases the chance of robust action from the Bank of England to combat the slump. I will go into more detail about what the BoE might do, and the effect this could have on exchange rates… Are you looking for the best exchange rates? Click here. New Bank of England governor takes over this week 
This week the new governor Mark Carney takes of the helm of the Bank of England. So what does he have to look forward to? The economy remains trapped in the longest downturn for a century, the banking system is still broken, and the financial markets are in a febrile state. Interest rates have been at a rock bottom 0.5 per cent since March 2009 and £375billion has been pumped into the economy through quantitative easing to drive growth despite inflation remaining stubbornly above the 2 per cent target. A nice welcome then!He knows the challenges he is facing, and he has already hinted that he will take robust action to return the economy to growth. This could mean, amongst other things, a re-start of Quantitative Easing. If he does decide to add more to the £375bn already pumped into the economy, then the likelihood is that the Pound may weaken significantly, pulling exchange rates down. Of course he may decide instead to start raising interest rates, which may strengthen the Pound due to the better return on offer. Click here to have a free no obligation consultation on exchange rates. First meeting for new Governor this week On Thursday, Carney will make take his first meeting at the BoE’s rate setting Monetary Policy Committee, and it will be interesting to see how many of the 9 members vote for an increase in QE. We’ll have to wait 2 weeks to see who voted for what, but it will be interesting to see what Carney does in his first week in the job. I personally don’t expect QE, but it remains a possibility.Protecting against adverse exchange rate movements 
With so much volatility and uncertainty surrounding the UK and global economy, it’s impossible to predict where exchange rates will move. Let’s look at Pound/Dollar rates as an example: In the last month alone we have seen rates as low as 1.50 and as high as 1.57 – a fluctuation of nearly 5% in just a few weeks, meaning a typical purchase of $350,000.00 has differed in cost by over £10,000, clearly illustrating how quickly exchange rates can move, and the impact of these fluctuations on the cost of a currency purchase. Against the Euro, we have seen rates between €1.13 and €1.23 this year alone. And nobody knows which direction rates will take for the remainder of the year. Some forecasts suggest more QE could weaken Sterling by between 10% and 15% which would mean exchange rates could tumble. Other forecasts suggest an escalation of the EU debt crisis will weaken the Euro and rates will rise. One thing is for sure, rates will not remain stable and any fluctuations can have a huge impact on how much your currency costs you. There are ways to take control of the market however, and not simply leaving things to chance and hoping rates will move the way you want them too. To give you just a few examples: You could fix the rate now for up to 2 years, and only lodge 10% of the total to be converted now. This protects against the rate dropping. Alternatively you could place a ‘Stop Loss’ or ‘Limit’ Order, which automatically secures your rate if it rises above, or drops below, a pre-agreed level. Click here to discuss how we can help you protect against rates falling. So how do you go about getting the best exchange rates? I can help you achieve commercial exchange rates up to 5% better than the banks, and you can also take advantage of my 10 years’ experience in the FX markets in help you decide when to fix a rate. 
Whatever currency you need to buy or sell, why not take advantage of a free consultation with an expert currency broker. I can discuss your requirement, the forecasts and possible direction of your exchange rate, and explain the options you can consider. In this way you can make an informed choice on when and how to fix a rate, and not simply leaving things to chance. As I have said before, hope is not a reliable economic tool. Take action now, click below to send a free no obligation enquiry and take the first step to making the most of your currency. Find out how good our rates are - click here. Economic Data 
Every day economic data is released across the world, and is often the most common thing that affects exchange rates. Below I list the main data releases for the coming week that I think could affect exchange rates. For a free consultation on how these released could affect your particular currency requirement, send me a free enquiry now by clicking here. Monday – Today we have various inflationary measures from Europe, which could dictate future interest rate movements. Staying in Europe, we have Unemployment numbers. In the UK we have Inflation data, and the new Bank of England governor Mark Carney takes over today. Over in the USA we will see Inflation and Construction data that may affect GBP/USD rates. Tuesday – There are only 2 UK releases today Construction data and Retail Sales data. In Europe we have further inflation numbers. Further afield we have an Interest rate decision from Australia. The only other data of note is Factory Orders from the United States. Wednesday – Starting in Australia today, we have Retail Sales and Trade Balance data. In the UK we have House Prices and Inflation data, along with a BoE report on Credit Conditions. Over in Europe its Retail Sales and more inflation numbers. In the USA today we have some unemployment numbers and Trade Balance figures. Thursday – A very important day, as we have the BoE decision on Quantitative Easing and interest rates, and it will be the first meeting with the new governor at the helm. Whether he will make changes to interest rates or QE we will have to wait and see. Shortly after, the ECB make their decision on rates. Friday – Sterling gets a day off today as there are no releases of note. It’s quiet in the EU also, with German Factory orders the only data of note. It’s all about the USA today – Unemployment, Non-Farm Payrolls and average earnings. Expect a volatile day for Pound/Dollar.
Wednesday 19th June 2013 Good afternoon. Sterling exchange rates have fallen back away from recent highs, after high UK inflation numbers and a strengthening Euro. In today’s post I’ll have a look at recent market movements in more detail, and also look at how Quantitative Easing (QE) in the UK and abroad is still driving exchange rate movements. In this weeks report: - Bank of England still split on QE
- UK Inflation higher than expected
- Euro gathers strength after Mario Draghi comments
- FED to make QE announcement this evening.
- Data for rest of the week that might affect rates
- How to get the best exchange rates
Bank of England still split on Quantitative Easing 
Earlier today the Bank of England (BoE) released its latest minutes on its decision to keep the QE programme and interest rates on hold. It showed that for the fifth month in a row, the monetary policy committee (MPC) voted 6-3 in June against increasing the programme of quantitative easing (QE). Sir Mervyn, along with Paul Fisher and David Miles, voted to increase QE by £25bn, as they have done in recent months. Sir Mervyn steps down from his role as BoE governor next month, to be replaced by the former governor of the Canadian central bank, Mark Carney, as I outlined in a recent post. While recent surveys of the economy had indicated an improvement in conditions, they said the outlook was no stronger than projections in the Bank's latest inflation report. They also said that the risks from the Eurozone remained "substantial". As you can see from the graph of today's movements, initially Sterling fell as a result, however it recovered all of it’s losses and just after lunchtime, rates were back where they started, with the Euro at €1.1690 and the US Dollar at $1.5660. As outlined in detail in my last post, there are concerns the new Governor will push for more aggressive QE and this is what is holding the Pound back at the moment. Looking for the best exchange rates? UK Inflation 
Yesterday we saw some surprising inflation numbers for the UK. The rate of consumer price index (CPI) inflation increased to 2.7% in May, up from 2.4% in April, the Office for National Statistics (ONS) said. The Bank of England has said it expects inflation to exceed 3% this year. May's rise in inflation was higher than analysts predicted. Usually high inflation would strengthen a currency, as it means that interest rates could rise to combat the rise in inflation. However with interest rates expected to remain at their record lows for some time to come, this isn’t an option. My view is it really means that investors are very nervous about the BoE's ability to keep inflation in check, and that’s why the Pound dropped immediately after the release.
Euro gains strength, pushing GBP/EUR rates lower.
Just a week or two ago GBP/EUR rates were in the €1.18’s. We have now seen rates drop by a few points, and part of this is due to a strengthening Euro. The reason it has risen in value and become more expensive to purchase was due to comments by the European Central Bank (ECB) President Mario Draghi. In a speech he said that the ECB have numerous standard interest rate policy and other non-standard measures that they can use if necessary.
What these measures are he didn’t expand on, but many think that he will do whatever it takes to protect the Euro, and this could mean negative interest rates. Markets responded positively to the news and the Euro gained strength, pushing GBP/EUR rates lower.Looking to convert Pounds to Euros, or Euros to Pounds? Click here to send me a free no obligation enquiry and find out more about the rates I can provide.
US FED decision on interest rates and QE
At 7pm this evening it’s the turn of the US Federal Reserve to announce its latest decision on interest rates and Quantitative Easing. I don’t expect any movement in interest rates. There has been speculation that the FED would be reducing its QE programme, so should this be the case I would expect the USD to gather strength and pull GBP/USD rates back down.
Only a few weeks ago rates were close to $1.50, but after the biggest 1 day gain in 4 years the rate shot up, and currently sits in the mid $1.56’s. Most forecasts are still suggesting that rates will fall back below $1.50, mainly due to an improving US economy and the threat of further QE in the UK.If you need the best USD rates, click here.
So, will Pound/Euro exchange rates rise or fall?
I’m asked this question many times each day, and the truth of the matter is I don’t know, nobody knows, and it’s impossible to predict. If anyone could then they would become very rich very quickly! What I can do is explain what is driving the market to help you make an informed decision on what to do.
On the one hand, better UK data and continued problems in the Eurozone suggest Pound/Euro rates will rise. Indeed a forecast I read this morning from Barclays suggested just that, and they are predicting that rates will soar above €1.20 this year.
On the other hand, you have robust policy from the ECB that is keeping the Euro strong, and the risk of a devaluing Pound through Quantitative Easing as outlined in my last post. So rates continue to be pulled in both directions, with no indication as to which way it will go in the medium term.Want to discuss market movements? Send me a free enquiry.
How to protect against rates moving against you
Despite the uncertain direction of rates, there are various ways you can protect against adverse rate movements and get the best possible rate.
You could place a Stop Loss order which give you a worst case scenario while still allowing you to aim for a higher rate.
A limit order is the opposite; you place an order to buy at a higher level than the market is currently at, and should rates rise even briefly, your currency is automatically bought.
You could fix today’s rates on a Forward contract for up to 2 years, and only lodge 10 % of the total, thus guaranteeing your rate, protecting against a decline and allowing you to budget.
To discuss your particular requirements, send me a free enquiry by clicking here. I can discuss your needs, run over your options and when you decide to convert your funds, the rates we can source on your behalf are exceptional – up to 5% better than the banks. You could be surprised on how much you can save.Have a free consultation and find out about the rates I can provide.
Economic Data
Tomorrow we have UK Retail Sales in addition to a speech by one of the Bank of England’s monetary policy committee. This could be interesting should include anything to do with Quantitative Easing and the markets will be listening closely to what he has to say.
On Friday we have some minor Public Sector Borrowing figures, but they could still affect the value of the Pound.
Monday 10th June 2013 Good afternoon. It’s been relatively stable in the world of exchange rates over the last week or two. Both the Bank of England and European Central bank have kept interest rates on hold again, as expected. We now look towards the new Governor taking over in a few weeks, and I’ll go in to detail below on how this could potentially weaken the Pound considerably. We also saw a surge in the GBP/USD exchange rate last week, rising more than 2 cents in just a few hours. So what do we have in store in today’s report? - New Bank of England governor could weaken Sterling
- Pound/Dollar rates surge by 2 cents
- Positive comments from ECB increase risk appetite
- Economic data releases this week that might affect exchange rates
New Bank of England governor could weaken Sterling 
The Bank of England has kept its stimulus programme of quantitative easing (QE) unchanged and also held interest rates at 0.5% at its recent meeting last week, as expected. However there could be a change in policy when the new Bank governor, Mark Carney, arrives in July. The BoE has been split in recent months over whether to increase QE from its current level of £375bn. Recent economic data has painted a mixed picture of the UK economy. Official figures showed retail sales fell in April, while unemployment rose in the three months to March. Last month the Bank upgraded its own forecast for growth, and recent data confirmed that the UK has avoided a triple-dip recession, growing by 0.3% in the first quarter of the year. Due to the mixed data, 3 of the 9 MPC members have voted for more QE at recent meetings. There is now speculation the new Governor Mr Carney will pursue more QE which could weaken the Pound significantly. Pound could fall by up to 15% 
Mr. Carney, the current Bank of Canada governor who takes over from Sir Mervyn King in July, said central bankers should consider “changing the policy framework” to stimulate a desperately weak economy. His words were directed at the Bank of Canada but will be seen as a hint that he will push for radical QE action in the UK, where the economy has been stagnant for two years. Some reports have suggested Mr. Carney will try to devalue the pound by as much as 15% in a last ditch attempt to cement the UK recovery. This of course would mean the cost of buying overseas could increase. It seems likely that Mr Carney is going to try and use Quantitative Easing to weaken the Pound. This is because while a high exchange rate is attractive for overseas property buyers, it’s not helpful for returning the UK’s economy to growth. It makes our exports more expensive, and 50% of UK exports go to the Eurozone. A weaker Pound would make exports more attractive and aid economic growth. Looking for the best Pound/Euro exchange rate? Click here to send a free enquiry.Pound/Dollar rates surge by 2 cents 
Last week we saw a surge in the GBP/USD rate, pushing up over 2 cents in just a few hours. This was a little unexpected, and has been put down to increased risk appetite. Generally when there is global economic uncertainty as we have seen recently, investors buy US Dollars as it is seen as a safe haven currency. Comments from Europe last week seem to have calmed the markets a little, and the more positive outlook for the EU has meant investors are more confident. As a result, all these investors that had bought US Dollars sold them off, and it was this that caused the weakening of the USD. Moving forwards, as outlined above the threat of more QE means there is a real chance we could see rates fall back to below $1.50. It all depends on how UK economic data fares in the coming weeks, which I’ll go over later in today’s post. Looking to buy or sell US Dollars at the best rate? Click here to find out more about our rates. Economic data releases this week that might affect exchange rates 
We have quite a few important releases this week that could cause exchange rate volatility. Today we had some minor EU inflation data and investor confidence measures. The numbers were little worse than forecast, and this caused the Euro to weaken off and push GBP/EUR rates close to €1.18. Tuesday - we have Industrial and Manufacturing production figures from the UK at 09:30am. These are a good indicator of UK economic activity, and so can affect Sterling. Also on Tuesday we have the NIESR UK GDP estimate. This is very important as the report is highly reliable, and could affect whether the new BoE governor will pursue more QE when he takes over. Wednesday - UK data is unemployment data. In the Eurozone we have Industrial production measures and inflation data, which could affect future interest rate movements in the EU. Also on Wednesday we have the latest decision on Interest Rates from New Zealand, so this might affect GBP/NZD rates. Thursday - Nothing of note from the UK on Thursday, but we do have a monthly report from the ECB so we could see movements in the GBP/EUR rate. Most data today though is from the United States – Jobless Claims, Retail Sales, Trade Balance figures. If these numbers are better than expected, then GBP/USD could drop away. Friday - sees a host of inflation and employment data from the EU, so expect a choppy day for the value of the Euro. We also have inflation data from the USA. Want to talk about how economic data could affect your currency requirement? Click here to send a free enquiry and have a free consultation. Getting the Best Exchange rates 
The rates I can help you achieve are up to 5% better than banks offer, so the savings you could make are significant. We are fully authorised and regulated by the Financial Conduct Authority, so you can be confident your funds are safe. Make a free no obligation enquiry today to see how much you could save.
At the most recent bank of England meeting all 9 members voted against more Quantitative Easing. This indicates that in the short term at least, there will not be any further money pumped in to the economy. Again you would think this would strengthen the Pound, but you have to look at what other tools are left in the box now QE is off the table. 
This would mean little return for anyone holding Sterling, and so despite better economic figures, the Pound has fallen as a result, and could well continue to do so. At 12pm tomorrow we will see the latest decision from the BoE on interest rates and QE. 
