Thursday 30th January 2014 There has been some key volatility in exchange rates this week, being mainly driven by events in the USA. In today’s report I’m going to explain how the FED tapering has pushed some exchange rates higher such as the Pound against emerging economies such as Turkey, New Zealand & South Africa, and some exchange rates lower for example Pound/US Dollar. FED cut stimulus as expected 
Last night the US Federal Reserve announced a $10bn reduction in its monthly bond purchases from $75bn to $65bn. This is the second month in a row they have done so. The central bank had been buying bonds in an effort to keep interest rates low and stimulate growth, and now they are winding that in is a sign of positivity for the US economy. So how has this affected exchange rates? Pound/Dollar rates have fallen. This is because the news is good for the USA, and so the Dollar has strengthened and become more expensive to buy. It’s dropped from 1.66 to 1.65, not a huge drop because the move was expected. 
Of more interest was the effect on currencies in emerging markets. Investors have been selling riskier higher yielding currencies like the South African Rand (ZAR), New Zealand Dollar (NZD), Australian Dollar (AUD) and Turkish Lira (TRY). The reason is there are fears their economies may now suffer as the reduction in liquidity from the FED takes effect. Read more about this in detail here on the Telegraph site. This means these currencies are very cheap to buy, and we’re seeing some of the highest exchange rates for these currencies for some time. Some of the countries have started to raise their interest rates to try and stop the capital flow out of the country as outlined in the link to the Telegraph above. Some analysts said that while the Fed may not have explicitly mentioned emerging markets in its statement, it would be an oversight to think the central bank is not keeping a close eye on the global economy. "The FOMC will want to observe the domestic and international market reaction to today's tapering decision," said Jefferies chief US economist Ward McCarthy. There are some great exchange rates available for AUD, NZD, ZAR, TRY among others. If you need to purchase these currencies in the short to medium term, you can get in touch with me to find out more about the exchange rates I can offer by clicking here. Pound/Euro remains stable between €1.21 & €1.22. 
Closer to home, we have seen the GBP/EUR rate fluctuate a little, but today has risen from €1.21 to €1.2160. There was some poor data from Germany that has weakened the Euro a little this morning. I don’t expect any significant gains in the GBP/EUR rate in the short term, mainly because the Bank of England has recently made it clear interest rates will not be rising any time soon. The rate is still very close to the best in 12 months, so if you need to buy Euros and want to take advantage of the current levels, click here to send me a free no obligation enquiry.
Monday 27th January 2014 Sterling has had a pretty good run today, steadily rising and recovering from the drop we saw at the end of last week, as you can see from today's GBP/EUR chart below. There haven't been any significant data releases today, so why has the Pound risen? I think the reason for today’s gains are two-fold. Firstly, we have some key growth figures for the UK tomorrow. When they are released I’m expecting it to show Britain confirmed as the strongest major economy in Europe, so part of today’s gains are the market positioning itself ahead of the official release tomorrow. Just last week the International Monetary Fund upgraded its outlook for the UK in 2014, so this optimism is driving the Pound forward at the moment. A second reason for the gain today could be a general sell off of weaker currencies and assets. As you can read here, the fact that the FED may taper it’s QE programme this week have meant that investors have been selling riskier assets like the Euro, and buying perceived safer currencies like Sterling, so that will be another reason for the gains for the Pound today. However despite recent gains for the Pound, it's worth bearing in mind that economists warn that the recovery remains fragile, with a downturn in consumer confidence posing a threat to positive momentum. In the last few months we’ve seen the Pound/Euro rate get to 1.21/1.22 several times, before dropping back away again. The currency market is very volatile at the moment, and so if you need to buy or sell currency in the near future, it’s worthwhile getting in touch to discuss your requirements with me. I can let you know your options and explain which way your exchange rate may move. In addition to my market knowledge, the rates I can source for you are often up to 5% better than banks and other financial institutions offer. What could affect exchange rates this week?
Below are the main scheduled releases that I think will have an effect on exchange rates this week. Tuesday will be a key day as we have the latest UK growth figures. Those that need to buy or sell Euros should watch out for this. Remember if you need to buy or sell currency and want the best rates, get in touch with me by clicking here and I can provide you a quote in addition to answering any questions you may have about which way the market is moving. The rates I can source can be up to 5% better than banks can offer, so it’s certainly worth comparing what I can offer you. Monday 27th January 2014 As explained above today has been very quiet on the data front, with only some data from Europe that was a little better than expected. Due to the market selling riskier currencies and assets today however as I have outlined above, the Euro has weakened and GBP/EUR has risen. Tuesday 28th January 2014 Today will be a key day for the Pound, as at 09:30am we will see the latest GDP figures from the Office for National Statistics. The forecast is to show quarterly growth of 0.7%. Recent UK data has been impressive, so if the number is better than 0.7% expect rates to rise. Of course if the number is lower, exchange rates could fall. There’s nothing else of note today other than a measure of Consumer Confidence from the USA. Wednesday 29th January 2014 Nothing from the UK today, and only some minor German confidence data, so the GBP/EUR rate will continue to be driven by Tuesdays GDP numbers. Of more importance today will be the interest rate decisions from the USA and New Zealand, so we could see an effect on GBP/USD and GBP/NZD rates today. I expect the US may announce further tapering of their QE programme. If they do, then it may weaken the USD and send GBP/USD rates higher. Thursday 30th January 2014 Quite a busy day today. Starting in the UK we see the latest Mortgage and Credit numbers. In the Eurozone we have several different measures of consumer sentiment released at 10am. This is followed at lunchtime by inflation numbers from Germany, Europe’s largest economy. Elsewhere we have some key US releases at 13:30pm: GDP figures, Unemployment and Jobless Claims. I therefore expect quite a choppy day for GBP/USD rates depending on the results. Friday 31st January 2014The only UK release today is a measure of Consumer Confidence. Of more importance for the GBP/EUR rate will be inflation and unemployment numbers from Europe which are due at 10am. Getting the Best Exchange Rates - Looking for the best exchange rates?
- Want to know if your rate will go up or down this year?
- Unsure when to go ahead and fix a rate?
- Keen to get a quote to compare with your bank or existing broker?
Click here to send me a free no obligation enquiry now and I can get in touch to discuss any of the above with you to help you decide what to do. I look forward to hearing from you. Alastair Archbold
Friday 24th January 2014 Good afternoon. We have seen Sterling weaken significantly today, after the Bank of England governor poured cold water on the chances of interest rates going up any time soon. Speaking at the World Economic Forum in Davos, he admitted that its new "forward guidance" on increasing interest rates will need to change because unemployment has fallen far faster than expected. He added it was time to "evolve" the guidance, raising the possibility the Bank may abandon the 7% unemployment trigger to consider an increase in rates. You can read more about what he said here on the telegraph site. This is what happened to Sterling/Euro rates after he spoke:What does this mean for exchange rates? Earlier in the week the excellent unemployment figures pushed Sterling to a 12 month high against the Euro, and this was because the level was falling to the 7% target that analysts thought would trigger an interest rate rise. 
The comments from Mark Carney today counteract that, and as a result the gains are gone, and as is often the case the spike was short lived, the Pound has fallen back away. I think it’s now unlikely Sterling will make any further significant gains now the market has corrected, although we are still above €1.20 against the Euro which is a good buying level. Those that need Euros may wish to fix a rate to protect against rates falling further. I have been saying for some time that if exchange rates rose much higher, don't be surprised to see the Bank of England move to weaken the Pound back off so that UK exports don't become too expensive, and that's exactly what we have seen happen today. If you are converting Euros or another currency back to Sterling, then today's move represents a decent move in your favour. Medium to Long term, the Pound will likely strengthen again, so it’s worth discussing your options with me regardless of which currency you need to move. Getting the best exchange rates 
This is all about timing. If you look at my post on Monday, you will see I highlighted the fact that Wednesday’s unemployment figures would be key for Sterling, and indeed they were as we saw rates surge. I also warned that any comments from the BoE that hinted no rate rise was on the cards would cause the Pound to drop in value, which again proved to be the case. This demonstrates that having a good currency broker on your side to help explain what could move the market is key to getting the best possible exchange rates. If you have an upcoming currency transfer to make, and would like to discuss your requirements, then you can click below to send me a free no obligation enquiry. I can discuss what you need to do, run over the options available to you, and explain what could happen to move rates either for or against you. Click here to send a free enquiry now In this way you can take control of your requirement and make an informed choice about what to do. Getting your timing right and achieving a good exchange rate can save you thousands of Pounds. I will be back on Monday as usual, with a full breakdown of what is happening throughout next week that could affect exchange rates. Have a great weekend. Alastair Archbold
Wednesday 22nd January 2014 We have seen another spike in the value of Sterling this morning, after the latest UK Unemployment figures were better than forecast. It is the biggest quarterly drop in unemployment on record! As such it has pushed the Pound to a 1 year high against the Euro (€1.2215) and close to a multi-year high vs the US Dollar ($1.6550). 
The figures released at 09:30am showed that the UK unemployment rate has dropped to 7.1%. This is now very close to the point at which the Bank of England has said it will consider raising interest rates. The better than expected figures has surprised the markets, as many analysts did not expect the unemployment rate to hit 7% until much later this year or possibly even 2015. This significant fall in unemployment therefore means that higher interest rates could be on the cards. So why has this caused the Pound to rise? Higher interest rates in the UK mean a higher return for investors, and so the possibility of higher rates means people buying Sterling, which in turn gives it strength and pushes exchange rates higher. The effect was almost immediate as you can see from the chart below, with GBP/EUR rates rising above €1.22 which is the highest since this time last year. Will the Pound rise higher still? It may do if economic figures continue to impress, however I think much will depend on what the Bank of England have to say on the matter in the coming weeks. Also released this morning was the latest minutes from this month's meeting of the Bank of England's Monetary Policy Committee (MPC) which you can read here. These seem to indicate that the BoE may be in no rush to raise rates, despite the low unemployment figures. This is because of the low inflation numbers I wrote about recently. Given that inflation has returned to the 2% target rate last month, and that "cost pressures were subdued... members therefore saw no immediate need to raise the Bank rate even if the 7% unemployment threshold were to be reached in the near future", the notes said. The MPC also said "it was likely that the headwinds to growth associated with the aftermath of the financial crisis would persist for some time yet", reinforcing the fact it is in no rush to raise rates. So while right now the markets seem to be expecting higher rates, the BoE have clearly indicated that even if unemployment falls further, it doesn’t necessarily mean interest rates will change. So watch closely for the next round of comments from the BoE, and if they again indicate no rate rise is on the cards, we could see Sterling weaken off again. Summary If you need to buy Euros, then securing levels at the best rates in 12 months can be no bad thing. Even if you don’t need your funds for up to 2 years, you can lock in today’s rates and only lodge 10% of the total you want to convert, thereby guaranteeing your rate and protecting against the market dropping back away. If you are selling Euros, then you should be aware the market has been steadily moving against you in recent months. You could secure a rate now, or if you feel rates may move back in your favour, a Stop Loss order means you are not leaving yourself open should rates continue to get worse for you. Regardless which currency you need to buy or sell, I can help you achieve exchange rates that are much better than banks usually offer. In addition to the rates I can source, I can provide you expert market knowledge to help you decide when to fix your rate. If getting the best exchange rates is something of interest, then send me a free no obligation enquiry today by clicking here, and find out more about the service I can offer. I look forward to hearing from you. Alastair Archbold
Monday 20th January 2014 It’s been a quiet start to the week, with the Pound remaining supported at €1.21 against the Euro and still above $1.64 vs the US Dollar. The market was very quiet due to a US Market Holiday. We did see a slight decline in GBP/EUR rates today though, losing half a cent, coming down from €1.2150. This was due to the Euro gaining a little strength, helped by higher short-term market interest rates, although speculation the European Central Bank may step in stopped the rate dropping too far. So as usual for a Monday, below I will list the remaining data releases this week that I think will affect exchange rates. Remember if you are looking for the best exchange rates, click here to send me a free enquiry to compare the rates I can offer you. This week’s economic data releases. Below are the main releases for the coming week. I think data from the Bank of England on Wednesday will be very important, along with UK Unemployment figures. Also bear in mind we have the World economic forum at Davos this week – any surprise comments that come from this could have an effect on exchange rates that will be impossible to predict. Monday 20th January 2014 As I’ve stated above, today was very quiet with a US Market holiday, and a lack of anything of note from the UK or Europe. Tuesday 21st January 2014 Quiet again, with only some Economic sentiment data from the Eurozone and Germany. If the numbers beat forecasts, expect Pound/Euro rates to drop away further. If however the figure disappoints, then Pound/Euro could edge higher. Wednesday 22nd January 2014 Today is a key day for Sterling. At 09:30am we have the latest UK unemployment figures, and also the minutes to the recent Bank of England’s Monetary Policy Committee meeting. Both of these releases will be key to how the Pound performs in the coming weeks. If the Unemployment rate is less than 7.3% the Pound will likely rise in value. Regarding the minutes, watch for any comments in the minutes regarding interest rates, as any hint of a rise will push Sterling higher. If comments suggest a rise is some way off, the Pound could fall. Thursday 23rd January 2014 Nothing of note from the UK today, but we will see various inflation numbers from the Eurozone. We also have Jobless data from the states, so both the Euro and Dollar could change in value today. Friday 24th January 2014 UK Mortgage approvals is the only data of note today. - Looking for the best exchange rates?
- Want to know if your rate will go up or down this year?
- Unsure when to go ahead and fix a rate?
- Keen to get a quote to compare with your bank or existing broker?
Click here to send me a free no obligation enquiry now and I can get in touch to discuss any of the above with you to help you decide what to do. I look forward to hearing from you.
Alastair Archbold
Friday 17th January 2014 This morning at 09:30am we saw the latest UK retail sales figures. These are watched closely as they reflect the overall economic situation in the UK, and for this reason the numbers often have an effect on exchange rates. The figures this morning were significantly above forecast, and as you can see from today’s GBP/EUR chart below, they have caused a big spike in exchange rates: 
The numbers showed that sales in December were up 5.3% on a year ago, and this is the fastest annual sales growth in more than nine years. The forecast was for 2.6%, so it's significantly better than expected. The figures from the Office for National Statistics (ONS) suggested growth in consumer spending above the expectations of many analysts. There aren’t many other significantly releases today, other than a speech by a Bank of England member at lunchtime, and some US Housing numbers later this afternoon. Do you need to buy Euros?
The spike this morning has pushed GBP/EUR rates back up to a 12 month high. We’ve seen this happen several times now over the last 6 weeks, only for the gains to be short lived and rates to drop back away again, so if history repeats itself we could well see rates drop back away. If you need to convert Pounds to Euros, this could be a good opportunity to take advantage of this spike. If you need to buy Euros and would like to see what rates I can offer you, click here to send me a free enquiry. Are you converting Euros back to Pounds? 
Rates have been above the €1.20 level for some time now, and we have seen it spike several times before dropping back away. If you need to convert Euros to Sterling then the medium term forecast for the market moving against you should ring alarm bells. You can use tools such as Stop Loss Orders to help you achieve the best rates possible. If you would like to find our more about how these works and the excellent exchange rates I can offer you, click here to get in touch with me today. Are you converting another currency, for example NZD, AUD, CAD, USD, CHF? 
I can trade most of the world’s major currencies, at exchange rates that are up to 5% better than banks can offer. This combined with the range of currency contracts available and my excellent knowledge of the currency markets could save you thousands of Pounds if you need to convert one currency to another. Why are you reading this? Perhaps you’re buying or selling a property abroad, or buy or sell goods in a different country, but whatever your requirements, you are likely reading this because you want to know which way exchange rates may move, and would like to achieve the best exchange rate possible. Get in touch with me now my sending me a free enquiry. I can have a brief chat with you over the telephone, discuss your requirements, explain the options you have available, and let you know the rate I can offer. By getting in touch you could well save yourself thousands of Pounds. I look forward to hearing from you. Have a great weekend. Alastair Archbold
Wednesday 15th January 2014 It’s been a volatile week for exchange rates since my last post on Monday. Despite not much data other than some inflation numbers, we have seen Pound/Euro rise to 1.2070 before dropping back towards the 1.20 level. Against the Dollar, the Pound has fallen from $1.65 to $1.6350. In today’s post I’m going to analyse the reasons why the Pound has been fluctuating up and down, and where exchange rates may be headed in the short term. If you are looking to make a transfer from Sterling to a foreign currency, or convert a currency back into Sterling, then click here to find out about the rates and service that I can offer you. UK Inflation Figures cause volatility for the Pound Yesterday we saw UK Inflation figures released, and it’s this that has caused the GBP/EUR rate to fluctuate. The figures showed that inflation has dropped to 2% which is the government’s target. It’s the first time it’s been at that level for about 4 years. So what effect did this have on exchange rates? Before analysing the effect it had, let me explain how inflation figures can affect rates. Inflation is controlled by interest rates, so if inflation is high then interest rates would usually be raised to combat this, and vice versa. (Higher interest rates usually strengthen a currency as the higher return on offer attracts investors.) Several years ago this was usually the case, but since the financial crisis central banks have kept interest rates at record lows. Despite inflation running high of late, there was no expectation of a rate hike to combat it. Much of Sterling’s strength recently has been due to the improving economy, and the fact that economists think interest rates will soon rise in the UK due to falling unemployment. The low inflation number would however now indicate that there is less chance of an interest rate hike any time soon.How did the lower figure affect Sterling? 
Initially, the market reacted accordingly and the Pound fell slightly. This was probably due to the fact that economists said the fall would ease pressure on the Bank of England to raise interest rates following the recent recovery in the economy. However very quickly we saw this reverse, and the Pound actually rose back up again. So why did this happen? Well despite the figure being low and reducing the case for a rate hike, overall the news is actually good for the UK economy. As investors slowly realised this, the Pound became supported again and rates rose close to €1.21 against the Euro. As has been the case of late however, the rise in the rate was yet again short lived. Mark Carney faced MPs on the Treasury Select Committee today, and during the Q&A he has effectively poured cold water on a rate hike any time soon, so this has reversed the gains. At the time of writing, GBP/EUR is 1.2017 and GBP/USD is 1.6345. Where will the Pound head next in 2014? The next key data in my view will be on Friday, when we see the latest UK Retail Sales numbers. These are a good indicator of how the economy is performing as a whole, and I expect the figure to show a rise of 0.5%. If it’s higher than this, then expect Sterling exchange rates to rise. If it’s lower, we will probably see rates fall. Are you looking for the best exchange rates? 
I am a Senior Currency Broker for one of the UK’s leading foreign exchange brokerages, and update this blog to help people understand what moves rates. Did you know that I can also help you source exchange rates that are significantly better then banks and other brokers can usually offer? In addition to helping you get better rates, you can also take advantage of the extensive knowledge I have of the currency markets. In this way you can make an informed choice on when to fix your exchange rate, and the best type of contract for you. I have helped thousands of clients get great rates of exchange for nearly 10 years. If you are keen on finding out more about what I can offer, send me a free enquiry by clicking here. I look forward to hearing from you. Alastair Archbold.
Last night the US Federal Reserve announced a $10bn reduction in its monthly bond purchases from $75bn to $65bn. This is the second month in a row they have done so. 
Of more interest was the effect on currencies in emerging markets. Investors have been selling riskier higher yielding currencies like the South African Rand (ZAR), New Zealand Dollar (NZD), Australian Dollar (AUD) and Turkish Lira (TRY). The reason is there are fears their economies may now suffer as the reduction in liquidity from the FED takes effect. Read more about this in detail here on the Telegraph site. 
