Monday 25th November 2013It's been a quiet start to the week in the currency markets. The only data of note today was the latest UK Mortgage Approval numbers. These were slightly lower than expected, and so Sterling has fallen a little against the Euro and US Dollar.Why haven't rates broken the €1.20 mark? 
As I predicted in my last post, Pound/Euro rates have again failed to break through the €1.20 level. As has been the case of late, it flirts around that level, before dropping back away. This is because at that level, it triggers lots of orders to buy. In turn this demand to buy Euros gives the single currency strength, and ultimately causes the rate to drop back away.
Moving forwards, I expect this to continue to be the case, dependant on how UK and EU economic data fares (see below). Should we get some further unexpected good news for the UK, we could see the €1.20 level breached. If we do, I'd expect it to keep pushing above this level. There is the risk however that if this were to happen, the Bank of England could move to weaken the Pound and bring rates lower. It's not in the UK's interest for exchange rates to be too high, so this is a risk you need to consider if you need to buy Euros. Pound/Euro remains very close to €1.20, and Pound/Dollar is between $1.61 and $1.62 - these levels are close to an all year high, so certainly worth discussing your requirements with me if you need to achieve the best exchange rates. Looking for the best exchange rates?
If you are looking to achieve the best possible exchange rates, want to discuss what might happen with exchange rates, or would like to discuss the different options available to you, then take the time to send me a free enquiry.It's free to make an enquiry, and you can then take advantage of a free consultation on what's happening with the currency you are concerned with. In doing so you can make an informed decision on when to fix your rate, and the rates I can source for you are significantly better than banks can offer.Click here to send me a free no obligation enquiry today.
This weeks economic data releases.
As regular readers will be aware, economic data releases are the main cause of exchange rate movements. Below I list this weeks releases that I think will have an effect on exchange rates this week. To discuss how this could affect you in more detail, contact me here. Monday – Today has been relatively quiet, with UK mortgage approvals the only data of note. The numbers were slightly worse than forecast, pulling Sterling a little lower against other currencies. Tuesday – Again not very busy in terms of things that could affect GBP/EUR rates. The only UK data of interest is an Inflation report at 10am. All the other data today is from the United States: Building and Housing data, Consumer Confidence numbers, and some manufacturing data, all of which could affect GBP/USD exchange rates. Wednesday – In my opinion today is the one most likely to cause some volatility with exchange rates, as we have an important release from Britain in the latest GDP estimate. This will show the estimate for growth, which is expected to be 0.8%. Any lower than this and the Pound may fall, and vice versa. We also have lots of US data today: Unemployment, Consumer Sentiment, and inflation data. So expect today to cause a few changes in exchange rates. Thursday – Today could again be important for exchange rates, as we have a report on Financial Stability from the Bank of England, and also a speech from the BoE Governor Mark Carny. In recent times when he has spoken, the Pound has gained in value so it will be interesting to see if that’s the case again. In Europe, we have Import Prices and Unemployment data from Germany. As Germany is the EU’s largest economy, the numbers could affect Pound/Euro rates. It’s Thanksgiving in the USA so things will be very quiet across the Pond. Friday – Today in the UK we will see Consumer Confidence measures along with house prices data and mortgage approvals. In the EU it’s also busy with German Retail Sales, French and Italian unemployment figures, and EU wide unemployment, so Pound/Euro rates will be the one to watch today. Click here to send me a free enquiry today.
Wednesday 20th November 2013 So the Bank of England news this morning was a bit of a damp squib, with all 9 members voting to hold QE and interest rates, so didn’t have much effect on exchange rates. However, the Pound/Euro rate has shot back up to €1.20 this afternoon, after a surprise indication that the European Central Bank may cut the deposit rate to negative. So in today’s post I’m going to explain why this has caused the rate to go up, and analyse whether it will keep rising or drop back away. Pound/Euro rates shoot up to €1.20 A report from Bloomberg this afternoon hinted that the European Central Bank may reduce the deposit rate to negative. This effectively means that commercial lenders that deposit funds with the ECB getting less return, or even potentially have to pay to lodge funds with them. These rumours caused investors to sell the Euro, and this has caused it to weaken and become cheaper to buy. As you can see from the chart above, there was an immediate reaction to the news, and Pound/Euro rates climbed to €1.20, a cent higher than we started the day. What is interesting is that this is not a scheduled release, which is usually what causes exchange rates to move, as I outlined in my last post.This shows that while it's usually scheduled data releases that move the rate, surprises like this can also have an immediate effect.For those that need to buy Euros, this is great news as the rate is now back to the highest it has been since January. Of course the key question is whether the rate will continue to climb, or drop back away. Will rates keep rising or drop back away? 
This is impossible to forecast of course, but in my view these gains will not be sustained. We have seen the rate hit €1.20 several times in recent weeks, however each and every time this happens, the gains are short lived, the Euro fights back and the exchange rate drops again. This is partly due to the fact this is a key technical level, at which many automatic orders to buy Euros are triggered. As the market is then buying Euros again, it gives it strength and the rate drops away. Another reason I think rates could drop back is that the Bank of England don’t want a high exchange rate – it makes exports more expensive and so should rates hold firm above this level, we may see the BoE move to weaken the Pound to bring rates back in check.
Indeed since we hit €1.20 at about 4pm this afternoon, rates have remained there and have failed to rise further. Click here to send me a free enquiry on exchange rates If you are buying Euros 
Consider taking advantage of the best rates all year. Even if you don’t need your funds for some time, you can fix today’s rates for up to 2 years, and only lodge 10% of the total you want to convert. This protects you against rates falling, and allows you to budget effectively. Especially useful if you need Euros to buy property abroad or to pay for goods from the Eurozone.Get a GBP/EUR quote. If you have Euros to move back to Pounds 
For those selling Euros, the rate has moved against you. As we may see rates drop back away, I would place a ‘Stop Loss’ order that protects you should the market keep rising, but allow you to take advantage if the rate moves back down.This gives you a worst case scenario and again allows effective budgeting without leaving things to chance.Get a EUR/GBP quote. If you need great exchange rates make a free enquiry today. Regardless which currency you need to convert, I can help you achieve excellent exchange rates that can be significantly better than your bank or existing broker may offer. Make a free enquiry with me by following the link below, and find out more about the service and rates I can offer. Click here to send me a free enquiry Alastair Archbold
Monday 18th November 2013It's been a quiet start to the week, with no major economic data releases. Despite this, Sterling has fallen a little throughout trading today to around €1.1900 vs the Euro and $1.6100 vs the US Dollar, however the Pound does remain strong overall relative to where it has been of late. So, in today's report I'm going to list all of this weeks economic data that can affect exchange rates. Regular readers will know I often give my opinion on major releases, and the effect that I think they will have on exchange rates. Knowing things like this are invaluable when deciding to fix your exchange rate.Want to discuss your requirements with a currency expert? Click here. This weeks economic data releases and how they may affect exchange rates
Monday - Today has been very quiet, with only EU Trade Balance figures that were as forecast, so had no real impact on exchange rates.
Tuesday - The most important number today is Germany's ZEW Economic Sentiment survey at 10am. This is a leading indicator of the German economy, and as Germany is the largest economic in the EU it can have a big impact. The forecast result is 54.6 - any higher than this would make GBP/EUR rates fall and vice versa. Elsewhere we have Speeches by FED members that could affect GBP/USD rates.
Wednesday - The most important day for GBP/EUR rates in my opinion. Firstly at 09:30am we have the Bank of England minutes. These show how members voted 2 weeks ago when they decided to leave Quantitative Easing and Interest Rates on hold. It's important as it also shows the discussions and differences of view, and so give an idea which way future decisions may go. Pound/Dollar could move around today also, as we have some key Inflation data from the States in addition to Retail Sales.
Thursday - An important day for the value of the Euro. we have inflation, consumer confidence, manufacturing and borrowing data for France, Germany and the EU as a whole. As usual, higher than expected numbers will strengthen the Euro and pull GBP?EUR rates lower. Lower than expected figures would have the opposite effect. Elsewhere, the UK has Public Sector Borrowing figures, and the USA has a host of Unemployment numbers and Inflation data.
Friday - A quiet end to the week, with nothing of note from the UK. We have Germany Business Climate numbers at 9am, followed by Italian Retail Sales (A good barometer of their economy as a whole).So there we have it, all of the above will be the main events that drive exchange rates this week. What does this actually mean for the currency you need to buy or sell?
This of course depends on which currency you are buying or selling, and the timescales you are working to. - Would you like to discuss which way exchange rates are going?
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Then make a free enquiry with me today. It's free, it doesn't put you under any obligation, and simply means you can find our more about the rates and service that I offer.
I can source exchange rates that are commercial, and up to 5% better than banks can offer. In addition to the rates and service I provide, I have over 10 years experience in the Foreign Exchange markets, so why not take advantage of my knowledge and expertise and click below to send me a free enquiry today.Click here to send me a free enquiry.I look forward to hearing from you.
Alastair Archbold
Friday 15th November 2013 Pound/Euro rates continue to be pulled in both directions, however the levels remain just under €1.20 which is around the best it’s been since January. So what has been happening since my last post that has caused the rate to fluctuate? Well in my last post I showed that the Unemployment and Bank of England data releases on Wednesday had caused the Pound to strengthen and pushed rates higher. To illustrate how volatile the rates are at the moment, these gains were short lived and on Thursday morning we saw the Pound fall back away due to lower than expected UK Retail Sales. This slump itself was short lived however, as also yesterday we saw some disappointing EU growth figures that weakened the Euro and pushed the GBP/EUR rate back up again. Eurozone growth slows, pushing GBP/EUR higher Yesterday official figures showed that the Eurozone economy grew by just 0.1% in the July-to-September period, down from 0.3% growth in the previous quarter. The European Central Bank (ECB) last week cut its benchmark interest rate to 0.25% in an attempt to give some impetus to the fragile recovery. The worse than expected numbers caused the Euro to weaken, become cheaper to purchase, and therefore the Pound/Euro rate rose. This week has really shown how susceptible exchange rates are to economic data releases, and the immediate effect these releases can have on the price of a foreign currency.Make a free enquiry and find out more about how I can help you. What is likely to happen to exchange rates in the coming weeks? 
This will depend on the next round of economic numbers. On Monday I will post a full review of all of next week’s data releases, to keep you informed on what is happening and how the data could affect exchange rates. Over the last week I have correctly predicted that the EU inflation numbers, Bank of England report and UK Retail Sales would be the main movers of currency rates, and that is exactly what we saw. Of course nobody can predict exchange rate movements or forecast which way a currency will go, however what I can do is explain the factors that will move the exchange rate you’re interested in, and also provide you with the options you can consider, so that you can make an informed choice on what to do and when to do it. In addition the market knowledge I have, the exchange rates I can source are commercial levels that are usually much better than you can achieve elsewhere. So if you need to buy or sell currency, and getting the best exchange rate is something that interests you, then send me a free enquiry today.It costs nothing to make an enquiry, carries no obligation, and you may well be very surprised how much you could save. Click here to send me a free enquiry now. I look forward to hearing from you. Have a great weekend. Alastair Archbold
Wednesday 13th November 2013 The Pound has had a topsy turvy week so far. Yesterday we had some inflation data that weakened the Sterling, pulling exchange rates down from the highs we saw at the end of last week. The dip was temporary however, as today we have had some better than expected Unemployment figures, along with a positive report from the Bank of England that has pushed the Pound higher. UK Unemployment & The Bank of England Report 
Figures released this morning by the Office for National Statistics show that the number of unemployed people in the UK fell by 48,000 to 2.47 million between July and September. The unemployment rate fell to 7.6%, the lowest rate in more than three years. The figures will be taken as an indication that the UK economy, which grew 0.8% in the third quarter, is continuing to recover. The news gave the Pound a boost, and caused exchange rates to rise slightly. This was followed at 10.30am this morning by the Bank of England Quarterly inflation report. Bank of England governor Mark Carney says the UK recovery has "taken hold" and unemployment will fall sooner than it had forecast. The report said: "In the United Kingdom, recovery has finally taken hold. The economy is growing robustly as lifting uncertainty and thawing credit conditions start to unlock pent-up demand." This compounded the strength for Sterling and pushed rates higher still. As you can see from the chart below, it’s clear the immediate effect the data releases had on exchange rates, with Pound/Euro rates now settled just below €1.19. Tomorrow is another key day for GBP/EUR rates After lots of UK data so far this week, tomorrow it’s Europe’s turn. We have preliminary GDP figures for Germany, France and Italy showing if their economies are growing. We also have a monthly statement from the European Central Bank. Also of importance will be the UK’s Retail Sales numbers at 09.30am, as these are a good indicator of economic activity as a whole. Looking for excellent exchange rates? You may be surprised how much you could save by making an enquiry with me. The rates I source are up to 5% better than banks can offer, and coupled with the expert knowledge I have of the currency markets, I can discuss your options and help you to decide when to fix your rate. Whether you need to convert Pound s to Euros or any other currency, or convert a foreign currency back to Sterling, I can help you. Click here to send me a free no obligation enquiry now. I look forward to hearing from you.Alastair Archbold
Monday 11th November 2013Last week saw the Pound surge to levels above €1.20 vs the Euro, and as I mentioned in my report on Thursday, I explained that I did not expect levels to remain at these highs for very long. Indeed that has been the case with rates falling throughout trading today.
Sterling drops back away against other major currencies As you can see from the chart below, throughout trading today Sterling has lost value against the Euro, steadily falling throughout the morning before settling just above €1.19.
In terms of economic data releases, it's been a very quiet day today. US and some EU markets are closed for veterans day, and there have been no significant data releases. So in the absence of ecostats to drive the market, what has caused the Pound/Euro rate to drop back away? It is simply market forces that have driven the value of the Pound today. As I explained in my last post, supply and demand drives exchange rates, much like it does in any other market. With rates hitting the highs of €1.20 plus last week, this spurred many people to take advantage of the rate and buy Euros. This demand for Euros then caused it to regain some of it's strength.
It's often the case that when a rate hits a key benchmark level like €1.20, the spike is very short lived indeed, and rates quickly drop back away again. If you look at GBP/EUR rates over the last 5 years, you can see that this has happened several times. So is it worth waiting for rates to get above €1.20 again? 
Of course this is impossible to predict, but I don't believe so. The reason behind my view that I don't believe the market will have a sustained break above €1.20 is the fact it would not be in the UK's economic interest to have an exchange rate that strong. Consider that 50% of our exports go to the Eurozone, and so a high exchange rate would make these exports more expensive. This in turn would affect our largely export led recovery and so could affect our recovery. Manufacturing and Industrial production have been a key driver behind the recovering economy here in the UK, and the Bank of England would not want to risk that by making our goods more expensive.
So, even if rates had stabilised above this level, I would expect the Bank of England to step in and try to devalue the Pound in order to bring the exchange rate down. In fact we have a key speech by the Bank of England governor late this week - will he follow the previous governors habit of trying to talk the Pound down, or will his speech follow his previous pattern of being very positive and boosting Sterling higher? We will find out on Wednesday.
Do you want to take advantage of the current exchange rate?
When is the best time to buy your currency?The best time to buy your currency is, of course, at the peak. The problem is that achieving that is more luck than judgement. By its very definition, you can't identify the 'peak' until it has been and gone. So therefore the second best time to buy your currency is just after the peak - this is exactly where we are right now.
So if you need to buy Euros you could consider locking in the rate now while it's so good. In the last few weeks, a £250k transfer to Euros would have differed by up to €10,000, clearly illustrating the decent gains we have seen of late. Even if you don't need your currency for up to 2 years, you can reserve the currency rate by lodging 10% of what you convert, with the remainder to be paid when you want your currency transferred. Click here to find out more about the exchange rates I offer.
What I think will affect exchange rates this week
I can help you achieve exchange rates that are much better than banks can offer, but that's only part of the service I offer. Exceptional exchange rates is the easy part. The hard part is for you to decide when to exchange your currency. For example in the last 2 weeks GBP/EUR has moved over 3.5% equating to a difference of nearly €10,000.00 on a £250k transfer. Economic data releases are the main mover of exchange rates. Today has been very quiet, but the rest of the week does have some key economic releases that I think will have an impact on exchange rates. Let's have a look at what the rest of the week has in store:
Tuesday - Lots of UK inflation data today, that can dictate future interest rate movements, and it's all released at 09:30am. Key will be the consumer price index which is forecast to come in at 2.5%. More than this, expect the Pound to gain, and vice versa.
Wednesday - Another key day for the UK and the Pound. Firstly we have some unemployment numbers at 09:30am which is expected to be 7.7%. Again a bigger number will cause rates to rise, a lower number could cause them to fall. At 10.30am the BoE release it's inflation report, and the governor Mark Carney gives a speech; his comments may well alter the value of the Pound. Of lesser importance will be EU Industrial production figures, but the UK news will probably overshadow this.
Thursday - Quieter in the UK today with Retail Sales the only release of note. the EU releases lots of inflationary measures, and over in the USA we have Trade Balance and Unemployment figures, so I expect GBP/USD to be a little choppy today.
Friday - A quiet end to the week with nothing from the UK, some minor EU trade balance and inflation numbers. I think markets will still be reacting to the UK economic news from earlier in the week. To discuss how your currency requirement may be affected by data releases, or just to have a chat about the exchange rates that I can offer, make a free no obligation enquiry today.By taking advantage of having a brief consultation, I can discuss your requirements, explain the options available to you, talk about what is happening in the market, and in doing so help you to make an informed choice on when to fix your exchange rate. Click here to send me a free no obligation enquiry today. I look forward to hearing from you.
Alastair Archbold.
Thursday 7th November 2013
Good afternoon. A short while ago, the European Central Bank (ECB) has surprised the markets, and cut the interest rate to 0.25%. This has caused significant weakness in the Euro, pushing GBP/EUR rates above €1.20 which is now the highest we’ve seen all year.
ECB cuts interest rates – Pound/Euro rates best all year
There were rumours that the rate would be cut, but most analysts didn’t expect it to happen this month – me included! The result is that the single currency has weakened significantly, and become cheaper to purchase. As you can see form the chart above, the moment the announcement was made, the GBP/EUR rate shot up from €1.19 to €1.2025, before settling down at the benchmark level of €1.20. You can read more about the cut, and the comments made by the ECB president here on the BBC website. The reason the rate has risen, is that a lower rate of interest means less return for investors. These investors have therefore sold the Euro off in huge volumes, and simply supply and demand means that more of something means it’s cheaper – the Pound/Euro rate has risen as a result. The gains were short lived however, as is often the case. The market did not last above €1.20 for very long, and already rates have dipped just below this level.As €1.20 is a key benchmark rate, when the markets hit this level it triggered many orders to buy, which temporarily drove it higher. The market has now stabilised just below this level, and I don't expect rates to get back above this level again in the short term.
Do you need to buy Euros?Take note that this is around the best levels we have seen all year. If you need to buy Euros in the next 6 months, it’s worth considering fixing the rate now with a ‘Forward Contract’. This means you can fix today’s rates for up to 2 years into the future, and only lodge 10% of the total you want to convert. You retain the other 90% until you want the Euro to be transferred.
In this way, you are protected against the rate dropping back away, and allows you to take advantage of the current levels even if you don’t need your currency for some time.Click here to make a free enquiry now. Pound/Dollar rates drop away.
In contrast, the news from Europe has caused Pound/Dollar rates to drop.
As you can see from the chart above, the movement is directly inverse to the GBP/EUR rate. Why is this? It’s because the investors that have been dumping the Euro, have moved to the safety of the US Dollar, which often happens when there is uncertainty in Europe. It’s then the simple supply and demand I mentioned above – as so many are now buying Dollars, it’s becoming more expensive to buy and therefore GBP/EUR rates are dropping.
Are you looking for the best exchange rates?
I hope you have found my blog useful, in keeping people abreast of what is happening with exchange rates, and the reasons for movements.
The company I work for can source exchange rates up to 5% better than the banks can offer. This combined with the expert market knowledge I have of the currency markets, could mean savings of thousands of Pounds on your currency transfer.
Click here to make a free enquiry now, and see how much you could save.
Alastair Archbold
