How to get the best Pound/Euro exchange rates

Wednesday 21st August 2013 
Good afternoon everybody. Pound/Euro rates have steadied since my last post, and remain a little above the €1.17 level. Against the Dollar, Sterling sits just under $1.57. This is around 2 month highs in both cases. In today’s post I will look at how recent economic releases have affected exchange rates, and whether Pound/Euro rates are likely to go up or down in the coming weeks. In today’s report: 

• UK Public Sector borrowing worse than expected, but Pound remains strong
• Greece may need another bailout, how would this affect GBP/EUR? 
• Growth forecasts are increased for the UK, supporting Sterling 
• US Fed minutes this evening may affect exchange rates 
• Getting the best exchange rates

UK borrowing disappoints, but Pound remains strong

I’m going to start in the UK today. This morning we saw the latest Public Sector borrowing figures, and they were actually quite a bit worse than expected. Despite the numbers disappointing, Sterling has not weakened, and in fact has risen slightly against the Euro. 

This is partly due to the fact the data remains subject to revision. For example, the £823m surplus recorded in July last year was originally reported as a deficit, so the markets haven’t taken much notice of the numbers. 

Indeed financial analysts played down the importance of the figure, with many saying they still expected to see steady improvement in the government's finances over the rest of the year, as the economy continued to recover. So due to this, the data did little to take the steam out of rally that has seen sterling rise 3% against the dollar and 2.3% against the euro this month, driven by improving UK economic data that has suggested interest rates may rise sooner than the Bank of England has indicated. 

Britain is doing quite well. The economy grew 0.6% in the second quarter of this year, up from a 0.3% rate during the previous three months, with the faster pace expected by economists to continue into the autumn. Also helping the Pound is he CBI business lobby group, which has increased its forecast for UK economic growth for 2013 from 1% to 1.2%. 

It also increased its forecast growth for 2014, from 2% to 2.3%, saying that the forward guidance on interest rates recently given by new Bank of England governor Mark Carney should add to positive sentiment. 

"The economy has started to gain momentum and confidence is picking up, but it's still early days," said CBI director-general John Cridland. 

Recent figures and surveys have shown activity in manufacturing, services, construction and the housing sectors all gathering pace. The most recent official figures for the UK economy from the Office for National Statistics showed it grew by 0.6% in the three months to June. The figure means that the economy has now recouped more than half the 7.2% of output lost in the 2008-09 recession. 

So all in all, things are looking much better for Sterling than they have of late. If you look at the chart showing GBP/EUR rates over the last 3 months, you can see the decline has been reversed, and exchange rates are looking much better for those that need to buy Euros. 

Looking for the best exchange rates for Euros? Click here. 

Another Greek Bailout on the cards?

Over in the Eurozone, debate about whether Greece will need another bailout has intensified, after the EU's economic and monetary commissioner declined to rule it out. Greece has received two bailouts totalling about 240bn euros (£205bn). A condition of the current bailout deal is that Greece makes cutbacks and restructures its economy. 

Yesterday Germany's Finance Minister, Wolfgang Schaeuble, said: "There will have to be another programme in Greece." The Euro weakened a little, but not too much because the news is not a surprise. Economists have long predicted a third rescue package for Greece, which is struggling to control its mounting debt burden as the economy shrinks under tough austerity measures. 

US FOMC minutes this evening 

The next main data release that will affect exchange rates is the latest FOMC minutes which are released this evening. Investors braced for a U.S. Federal Reserve report which may shed light on when it will trim its QE stimulus policy. 

Confirmation that the Federal Open Market Committee is veering towards slowing its bond buying programme in September could see strengthen the Dollar, which would probably cause GBP/USD rates to drop, however if we see a more cautious approach by the Fed, I would expect to see the US Dollar weaken, pushing GBP/USD rates higher. 

It will likely affect other currencies such as GBP/EUR, as sentiment towards the US Dollar often drives other currency pairs due to its safe haven status.

Do you want to get the best exchange rates? 

Hopefully my blog is a useful resource for those that are keen to know what moves exchange rates, in order to help decide when to fix an exchange rate. I have been a commercial foreign exchange broker for 8 years, and have a very detailed knowledge of the currency markets. 

I currently work for one of the UK’s leading foreign exchange brokerages, and the rates I can source are up to 5% better than banks of other brokers can offer. 

• So, are you looking for the best exchange rates?
• Keen to know when to buy your currency? 
• Worried about rates moving against you? 
• Want to know what your options are? 
• Unsure how data releases may affect your exchange rate? 

If you have considered any of the above, then I think you would find a free consultation with me very useful indeed. It’s free and carries no obligation at all, and simply means you can discuss your requirements with an expert. In this way you can learn about all the options available to you and make an informed choice on when to fix your rate. 

And of course when you decide to do this, the rates you can achieve using my services could save you thousands of Pounds. 

Make your free enquiry with me now by clicking here. 

I look forward to hearing from you.

Pound/Euro at 2 month high following unemployment figures

Wednesday 14th August 2013 
Good afternoon everyone. Since my last post, Sterling has continued to make gains, helped by strong unemployment figures this morning. In today’s report I’ll have a look at this which has caused the gains for the Pound, the latest news that the EU has emerged from recession after 18 months, and what the latest Bank of England minutes mean for exchange rates in the short to medium term. 

So in today’s report: 

• Strong Unemployment figures cause Pound to rise
• Pound/Euro at 2 month high 
• EU exits recession after 18 months, but Euro fails to strengthen 
• Latest minutes from the Bank of England’s Monetary Policy Committee 
• Data for the next 7 days that may affect exchange rates 

Strong Unemployment figures cause Pound to rise 

The latest UK unemployment figures were released this morning, they made good reading and the Pound has risen as a result. While unemployment held steady, which had been expected, the outlook was much brighter, as the number of people looking for work fell 4,000 to 2.51 million in the second quarter, according to figures from the Office for National Statistics. 

Jobless claims declined for the ninth straight month by 29,200 to 1.44 million, taking the rate to 4.3pc, the lowest since February 2009 and the number of people in employment rose by 69,000 in the three months to June to 29.78 million, compared to the three months to March. 

So what does it all mean for exchange rates? Well, today's unemployment figure has added significance after the Bank of England Governor Mark Carney last week announced that interest rates would not be raised from their record low of 0.5pc until the unemployment rate fell from its current level of 7.8pc to below 7pc. Mr Carney said it meant that more than 750,000 extra jobs would have to be created before the end of 2016 for rates to start rising again. 

As the latest numbers are heading in the right direction, it gave Sterling a decent boost, and helped push exchange rates through the €1.17 level vs. the Euro, which is the highest in 2 months.

If you're looking for the best Pound/Euro rates, send me a free enquiry now by clicking here. 

EU exits recession after 18 months, but Euro fails to strengthen 

The Eurozone has emerged from recession after a record 18 months of economic contraction. Their GDP grew by 0.3% in the second quarter of 2013, slightly ahead of forecasts, the Eurostat agency said. However, the overall figure masks the mixed economic fortunes among the countries that make up the 17-country Eurozone area. 

It didn’t have much impact on exchange rates though. To be honest they were expected to exit recession anyway, and while it’s good news, it was already priced in to the market. This meant the Euro did not strengthen any further, and the markets brushed off the data. There was no impact on Pound/Euro rates. 

Should the EU continue to post robust figures however, we could see the single currency start to gain strength. This may cause GBP/EUR rates to drop back away. 

Worried about GBP/EUR rates dropping? Send me a free enquiry to discuss your options. 

Latest minutes from the Bank of England’s Monetary Policy Committee 

Bank of England governor Mark Carney received almost complete support for his new forward guidance policy from his colleagues on the Bank's Monetary Policy Committee (MPC). The latest MPC minutes show eight out of nine of the MPC's members voted for the strategy at its August meeting. 

Meanwhile, all nine MPC members agreed that the £375bn asset purchasing programme, known as quantitative easing (QE), should remain in place and that interest rates should hold steady at 0.5%. 

Again mostly this was expected, but the unanimous support did give the Pound a boost, compounding the unemployment numbers – the net result was a good rise in Pound/Euro rates today. 

Want to take advantage of the good Pound/Euro rates? Send me a free no obligation enquiry today. 

Summary 

Pound/Euro is now at a 2 month high. There is still much uncertainty, so if I needed to buy Euros I would strongly consider fixing a rate now to take advantage of the gains, and protect against a possible downturn in rates. With the EU exiting recession, more good news could make the Euro expensive again. 
 
For those selling Euros back to Pounds, in recent weeks it was a 2 year high. We’re drifting away from that now, with the Pound gaining lots of strength in the last few weeks, and rates are now moving against you. 

 To get the best exchange rates, timing is very important. IN order to get the timing right, you need a good currency broker on your side to explain what is moving the market, your options, and different ways to approach getting the best exchange rate. 

If you need the best rates of exchange, send me a free enquiry now by clicking here. I can discuss your requirements and help you get rates that are up to 5% better than banks offer. 

Are you looking for the best exchange rates? Send me a free enquiry now.

Data for the next 7 days that may affect exchange rates 

Below I list the main data releases for the next 7 days which I think could have an effect on exchange rates. If you would like to know the specific data releases that might affect the currency you need to buy or sell, send me a free enquiry now. 

Thursday 15th – Quite quiet today as EU markets are closed for Assumption day. In the UK we have some Retail Sales figures which are a pretty good barometer of overall economic activity. Other than that all data is stateside: inflation data, Jobless Claims and Industrial Production. 

Friday 16th – Nothing of note from the UK today. We do have Trade Balance numbers and CPI data from the Eurozone, so we may see some movement in GBP/EUR rates despite no UK data. In the USA we have Building permits and a consumer sentiment survey. 

Monday 19th – Unusually there is no data of note today. At all. 

Tuesday 20th – Again quiet in the UK, in fact the only interesting data is Import and Export numbers from Germany along with some minor German inflation data. 

Wednesday 21st – UK Public sector borrowing figures are released today. Also we have the FOMC minutes that could affect GBP/USD exchange rates. 

Click here to send me a free no obligation enquiry today. 

Sterling surges higher as Mark Carney issues Forward Guidance

Wednesday 7th August 2013 
Good afternoon. Today has been extremely volatile on the currency markets with Sterling surging higher against other currencies. The new Bank of England governor Mark Carney addressed Parliament and delivered his Quarterly inflation report. 

After months of decline for Sterling, the Pound has surged against other currencies today, so in my post this afternoon I will analyse what he said, the impact on the economy, why it caused exchange rates to rise, and what this means for exchange rates going forwards. 

‘Forward Guidance’ from the Bank of England 

The new Bank of England (BoE) governor Mark Carney today addressed parliament, giving his quarterly inflation report, his first since taking over the helm last month. It was already widely expected he would outline his new policy of ‘Forward Guidance’ and indicate that interest rates would remain low for some time. 

How did it affect exchange rates? 

 

As you can clearly see from the chart, when the speech started at 10:30am, Sterling immediately dropped quite significantly, as had been expected. You can see the dip at 10:30am this morning when Pound/Euro rates fell from 1.1530 to 1.1440.

The dip was not to last however, and very quickly the Pound recovered its losses, and kept on going. Again looking at the chart you can see the exchange rate rocketing higher, above where it started the day, and eventually levelled out around 1.1645 against the Euro. 

Click here to get a quote on our commercial exchange rates. 

So why did the rate drop, and then make a huge recovery? 

Firstly the reason it dropped was speculation that he would indeed say interest rates would remain low for some time. Market analysts, myself included, have been saying for some time that if he did indeed say interest rates would remain low, expect Sterling to drop, and initially this is indeed what we saw. 

The reason there was such a massive bounce back was the terms that he outlined as parameters for when rates would start to rise. He pledged to keep them on hold until the official unemployment rate fell below 7%. This is his ‘forward guidance’. Under its central forecast, though, the Bank does not expect unemployment to fall to 7pc until September 2016. So in effect, he’s saying interest rates will remain low for another 3 years. 

So you would have expected the Pound to fall further on this news, however Economists said traders were expecting a much tougher target than 7 % unemployment, hence the reason for today’s robust performance for Sterling. The Institute of Economic Affairs said Mr. Carney's forward guidance was "the most dangerous development in UK monetary policy since the late 1980s". So experts are mixed on the effect it will have. 

So what does this mean for the economy? 

If rates do remain on hold until 2016, they will have been at their record low for nearly 8 years. The last time this happened was the 12 years that spanned the Second World War and the period of austerity that followed. 


The economy does seem to be recovering however. Recently we’ve seen good Retail Sales, good growth figures, strong manufacturing and industrial production, good growth forecasts and decent house price increases. And although welcoming the recovery, Mr. Carney stressed that it “remains weak by historical standards”. 

“There is understandable relief that the UK has begun growing again. But there should be little satisfaction. Much is at stake as we seek to secure the recovery and return inflation to target,” he said. 

The Bank expects inflation to remain at 2.9pc this year, fall to 2.4pc by the end of 2014 and hit 2pc in late 2015. The Bank stressed that it will keep the stock of quantitative easing steady at £375bn until the end of 2016 as well, and could increase it if the economy slipped backwards. 

You can read a detailed report here on the BBC website of what he said and the impact on the economy.

What does this mean for exchange rates? 

Right now this means good buying opportunities for anyone that is buying a foreign currency with Sterling. The gains are a surprise to the market, and so if you need to buy currency, consider taking advantage of the gains we have seen. We can fix your exchange rate for up to 2 years into the future, and you only lodge 10% of what you want to convert now. This protects you from the rate falling. 

Moving forwards much will depend on economic figures. If they start to disappoint, then we could still see further QE from the BoE which would cause the Pound to fall back away. 

Need Euros at the best exchange rate? Send me a free enquiry. 

For those selling converting currency back in to Sterling, rates are now moving against you. A week ago the Euro to Pound rate was close to a 2 year high, with Forward guidance in place and the economy recovering, further good figures could mean the rate gets worse for you. 

Selling property abroad and want the best Euro to Pound rate? Make a free enquiry now and find out about your options.

How to get the Best Exchange Rates

The first step is to send me a free enquiry by clicking here. I can discuss your requirements in detail, run over the options you have available, and help you decide on the optimal time to convert your funds. This means you can make an informed choice on what is best for you.

When you decide to fix a rate, the levels I can achieve are incredibly good commercial rates, that are up to 5% better than you can achieve at banks and other financial institutions. 

Send me a free enquiry now and find out how good our exchange rates are.

Why has Pound fallen against Euro? JUL/AUG 2013

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. 

Sterling steady ahead of GDP figures.

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. 

Pound/Euro rises from 3 month low after BoE MPC Minutes

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. 

The vote surprised those who were hoping to see signs of more stimulus measures from the Bank. Indeed I was expecting at least 2 or 3 of the members to continue voting for QE as has been the case for several months. 

The fact that all 9 members decided against QE dampens speculation that Mr Carney's arrival might prompt an injection of additional monetary stimulus sooner rather than later. 



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.

Pound/Euro falls despite better data. 2013 forecast.

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. 

In other news last week, we saw that US employment grew by 195,000 in June gave the dollar more support, pushing rates lower. We have since seen rates climb back above the $1.50 level, but we will have to wait and see whether it will stay there. 

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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 Canada

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