Friday 30th May 2014 Good morning. Exchange rates remain quite steady today. Pound/Euro rates have dropped a little this morning after some very impressive German Retail Sales numbers. This strengthened the Euro and made it more expensive, pushing GBP/EUR down into the €1.22’s. Pound/Dollar rates remain a little above $1.6730. Will Pound/Euro rates go up or down June 2014?
As regular readers of my blog will now, the current high GBP/EUR rate is all to do with interest rates. The markets expect the UK to raise interest rates, and this has been gradually priced into the market over the last few months, resulting in the highest Pound/Euro rates in 18 months. Over in Europe, the threat of deflation means that the European Central Bank (ECB) may have to cut interest rates. Next Thursday we will find out as they announce their decision. I think there is a very good chance they will cut to around 0.1%. If they do, then Pound/Euro could go higher. However should they choose to wait, then we will probably see the exchange rate drop sharply. After their decision they will give a press conference which will give an insight into their discussions. All in all, this is a very very important week for the Pound/Euro cross. (See below for other economic information that could affect the rate. What should you do if you need to buy or sell Euros at the best exchange rate?
Perhaps you need to convert Sterling to Euros, or maybe you have Euros to convert to Pounds. Whatever your requirements, this week is an important one and will have an effect on the exchange rate you can achieve. Why not take the opportunity for a free consultation on the service I offer. I can explain what the market is doing, which way the rate could go, and run over the options you can look at to protect against the rate moving against you. My service is free, and I can also provide you a quote to compare with your bank or existing broker. You could be surprised how much you could save. Click here to send me a free no obligation enquiry now. Next week’s data that may affect exchange rates this week.
As regular readers of my blog will know, the main thing that causes exchange rates to move is economic data releases. Below I have listed the main economic data that I think could affect currency rates this week. Monday 2nd June 2014 The Manufacturing PMI (Purchasing Managers Index) is the main thing on the menu today. This captures business conditions in the manufacturing sector, and as a very important indicator of overall economic conditions. This is released today by the UK, EU, Germany, and the USA so expect some volatility for Pound/Euro and Pound/Dollar. Tuesday 3rd June 2014 Nothing of note from the UK today Over in Australia we have Retail Sales numbers and an interest rate decision from the Reserve Bank of Australia (RBA). The main driver for GBP/EUR rates will be the Unemployment numbers and inflation data from Europe. Wednesday 4th June 2014 GDP numbers are released from Australia today which could affect GBP/AUD rates. We also have GDP numbers from Europe, along with inflation data. Further afield we have Trade Balance numbers from the states, and an interest rate decision from Canada. Thursday 5th June 2014 The most important day of the week for GBP/EUR rates. The Bank of England (BoE) announces its Quantitative Easing (QE) and Interest rate decision today. I don’t expect them to make any changes. However, we also have the European Central Bank (ECB) decision, and there is a good chance they could cut interest rates. The market has already partially priced this in, but if they do cut the Euro could weaken and push GBP/EUR higher. If they don’t cut, Pound/Euro rates will probably drop. They will also give a press conference after the decision which could also have an impact on rates. Friday 6th June 2014 Trade balance figures from the UK this morning could create some volatility for Sterling. There are also Trade Balance numbers from Germany. Over in the states, the main event will be the Unemployment figures and non-farm payroll numbers. Regular readers will know this release often has quite a big impact on the Pound/Dollar rate. Looking for the best exchange rates? Make a free enquiry.
Wednesday 28th May 2014 The Pound has fallen quite a bit today against both the Euro and the US Dollar. GBP/USD is now sitting at a 6 week low of $1.67, which is the biggest one day fall in 4 months. GBP/EUR has fallen to a 1 week low of €1.2288. Why has the Pound fallen?
The currency markets move mostly on rumour. As regular readers of my blog will know, there has been much speculation UK interest rates will be going up at some point, and this has been driving the Pound higher as it gets priced into the market. However recent data such as this week’s poor Retail Numbers and Mortgage Approvals mean that the market is now paring back some of the more aggressive bets that the Bank of England could begin raising interest rates later this year. It now looks more likely to be next. These over-extended bets on sterling appreciation seem to have run out of steam. I have been pointing out in recent weeks that the market has got to the recent highs several times only to fall back away again, and this is exactly what we have seen happen again. Many clients took advantage of our ‘Stop Loss’ orders to protect against exactly this kind of thing, so those that have taken the opportunity to discuss their requirements with us have avoided losing more than necessary. Those that simply watched and hoped the market would keep going up will be disappointed. Don't just hope things will move in your favour; hope is not a reliable economic tool. Take control of your currency requirement by discussing your options with an expert currency broker. So which way may the exchange rate go next?
Financial markets still widely expect the BoE to be the first major central bank to raise interest rates but I think this is now very widely priced into the rates we already see. The next thing of major importance is next week’s ECB meeting, which could reveal a combination of policies to tackle low inflation and low credit growth. The key will be the timing of any stimulus if they decide to do any. If they are very aggressive in any stimulus measures, GBP/EUR will probably go back up. If however they are not specific and the markets don't think action is imminent, we could see the rate fall further still. Get in touch for the best exchange rates
I can not only help you achieve excellent exchange rates, we have various tools and contract types that can protect you against the market going the wrong way. If you have a currency transaction to perform in the next 12 months, and would like to discuss how I can help you, click below to send me a free no obligation enquiry. Click here to send a free enquiry today
Tuesday 27th May 2014 The UK and US markets opened today after being closed yesterday for the Bank Holiday. Initially things looked good for the Pound, rising against both the Euro and US Dollar as soon as the market opened at 8am. The reason for the initial gains was the Deputy BoE Governor Charlie Bean's comments at the weekend, where he said that the bank's plan to raise rates gradually means the first hike could come earlier than may otherwise have been the case. (Higher rates mean a higher return, and so the Pound gained a little strength.) The BoE governor Mark Carney speaks this evening, so any surprise comments from him could also have an effect on GBP/EUR rates, and is probably the most key event of the week in my opinion. In stark contrast, the European Central Bank president Mario Draghi said on Sunday that "more pre-emptive action may be warranted to ward off deflation". This hints to the markets that they may well pursue some sort of stimulus measures, which if they do could weaken the Euro. 
Pound falls after Mortgage Approvals
Data is thin on the ground today, so the only thing the market had to go on was this morning’s mortgage approval numbers. The figure was several thousand below what had been expected, and this took the steam out of Sterling’s run, lowering the value of the Pound by around 0.3%/0.4%. What next for exchange rates?
Focus is still on what the central banks of the UK and EU will do in the coming months. As explained above, there is lots of speculation UK rates are going up at some point, and that the ECB may well do the opposite. This has been steadily priced into the market over recent months, and is the reason GBP/EUR rates are close to an 18 month high. We will know more about any likely action in the coming weeks, and this is likely to move GBP/EUR rates from their currency position. If you need to buy Euros, or indeed convert Euros back to Pounds, then the market at the moment is treading a very fine line, and could move either way in the next few weeks. If you have a currency transaction to perform, it would be advantageous to get in touch with me about which way the market is going, and the options you have available to ensure you get the best rate and not get caught out by adverse market movements. It’s free to make an enquiry, doesn’t obligate you, and I can discuss your requirements and provide you a quote to compare with your bank or existing broker. Click here to get in touch for a quote, or to discuss the currency market. Economic Data Releases this week that might affect exchange rates
Wednesday 28th May 2014 We are very light on UK data today, but the markets will be reacting to last night’s speech by Bank of England governor Mark Carney. In the Eurozone we have the latest German Unemployment figures, in addition to EU wide measure of Consumer Confidence and Economic sentiment so GBP/EUR could be affected. Thursday 29th May 2014 The only UK data of note comes late in the day, with consumer confidence measures at midnight. The majority of the eco-stats being released today are from the United States: GDP figures, Jobless Claims, Home Sales and Consumer confidence. So there’s lots today that could well affect GBP/USD rates. Friday 20th May 2014 Again nothing of note from Britain. The only EU data worth noting is Retail Sales from Germany. It’s a very good indication of their economy as a whole, and being the largest in the EU it can sometimes affect GBP/EUR rates. Busy day in the USA again today, Income & expenditure figures, Inflation data and consumer Sentiment.
Wednesday 21st May 2014Good morning. We've seen further gains for the Pound this morning following very strong Retail Sales, and further speculation regarding UK interest rates. In today's report I'll have a look at both of these subjects in addition to what options you can consider if you have a foreign exchange transaction to carry out and want to get the best exchange rates. UK Retail Sales smash forecasts
In my post yesterday I outlined that today’s Retail Sales could affect exchange rates. Markets expected the monthly figure to be 0.5%, but the actual figure came in at a staggering 1.3%, much higher than forecast. As Retail Sales are a good indicator of the economy as a whole, the news has given the Pound a further push and we have seen rates break through the €1.23 level, and at the moment is holding on and looking sustained. This is the best we’ve seen Euro rates now for 18 months. Bank of England contradicts over interest rates
Interest rate rises could be the "only game in town" to deal with an overheating market, says BoE deputy governor Charlie Bean, which contradict what the governor Mark Carney said recently. This speculation on when interest rates may rise has also boosted Sterling. It will be interesting to see if this spike above €1.23 will be sustained, or if it will drop back away as it has done in recent months. Will rates go up or down? When should you buy your currency?
Nobody can predict the market unfortunately, but with an understanding of the tools available to you, you can ensure you get the best rate possible and be protected against rates moving against you. If you are converting Pounds to another currency – the rate is the best in 18 months which is fantastic. It could go higher, but you don’t want to hold out for an inch and risk losing out on the current levels. What you can do is place a Stop Loss order, which means you are protected if rates fall back away, but you can still take advantage should the rate move in your favour. If you are selling currency back to Pounds – it seems Sterling is going from strength to strength, and the more likely an interest rate rise is, the worse the rate will get for you. A forward contract allows you to fix the rate now for up to 2 years, even if you don’t have all your funds available to convert now. Whatever your requirement, I can help you get the best possible exchange rates, and discuss your options to help you make the most of your currency.Click here to get in touch with me now and find out how I can help.
Alastair Archbold
Tuesday 20th May 2014Good afternoon. We've seen the Pound rise this morning, touching a 16 month high (€1.23) against the Euro again, after figures showed that inflation rose more than expected last month. Despite the increase in the CPI inflation measure, the rate is still below the Bank of England's 2% target for inflation. 
Last week, Bank of England governor Mark Carney said he expected the rate of inflation to remain below its target for the next two years; however the slight rise does slightly increase the chance of an interest rate hike in the UK, which is why Sterling rose. We’ll get further information on this subject tomorrow morning, when the Bank of England releases the minutes to its recent meeting where rates were held. It will show what was discussed and how they voted. I don’t really expect anything new from the minutes and I would be surprised if GBP/EUR pushes through the €1.23 barrier. We’ve seen that level tested a few times recently, but it would take some very impressive UK data to strengthen the Pound enough to push it through that level. Retail Sales numbers are also released tomorrow, and the figures are expected to show a 0.5% increase. A differing figure could affect rates further. Eurozone stimulus still the focus for Pound/Euro rates
The Pound is quite strong at the moment, but the main driving force pushing Sterling/Euro higher is expectation on what the European Central bank will do to combat deflation. There has been lots of talk recently of possible stimulus measures in the EU. If this happens then the Euro could weaken further, which would cause GBP/EUR rates to go up. However one ECB member recently said that asset purchases were “one of a string of measures being considered”, adding to the debate on what the bank is likely to do at its meeting at the start of June. If they do announce stimulus, expect Pound/Euro to push higher. If they don’t, then I think we’ll see rates drop back away again. Pound/Australian Dollar
GBP/AUD has also risen in the last few days, pushing up to $1.82. A year ago it was down at $1.45 so the current levels are quite attractive to those that need to buy Aussie Dollars. Again this is partly due to a strong Pound, but also a weakening Aussie. One of the country’s biggest exports is Iron Ore, and we’ve seen a drop in the price of this commodity. Get in touch for the Best Currency Rates
If you would like a quote on the exchange rates I can provide, or simply have a chat about what is moving the markets to help you to decide when to fix your rate, then get in touch with me. I work for one of the UK’s leading independent foreign exchange brokerages, and have 15 years experience in this sector. I can source rates of exchange that are usually much better than those offered by banks and other brokers. Click here to get in touch Alastair Archbold
Friday 16th May 2014
Good afternoon. The Pound has steadily recovered this morning, climbing up to €1.2265 against the Euro and $1.68 vs the US Dollar. There hasn’t been any real data of note from the UK, and the gains for Sterling really just reflect the optimism surrounding the UK economy at the moment.
Rates have failed to break through the €1.23 barrier this week however, as the Pound is being kept in check with this week’s news that the Bank of England will only raise interest rates gradually when they eventually decide to start putting them up in 2015.
For this with Pounds to covert, then GBP/EUR is around a 16th month high, and GBP/USD just below a 5 year high – great levels for those needing to buy foreign currency.
If you have a currency transaction to perform and would like to see what rate I can offer you, click here to send me a free no obligation enquiry.
Below is an outline of all next week’s data that I think will affect exchange rates. Have a great weekend.
Alastair Archbold
Next week’s economic data releases that could affect exchange rates
Monday 19th May 2014
It’s a very quiet start to the trading week with no significant economic releases.
Tuesday 20th May 2014
Lots of data from the UK today including various measures of inflation, and the latest Retail Sales numbers. These are a good overall barometer of economic activity, and the number is expected at 2.5%. If it’s higher than the Pound may make some gains.
Wednesday 21st May 2014
Today we have the all-important BoE MPC minutes. These will show what was discussed at the most recent meeting where they left interest rates on hold. If they hint that rates are only going to rise gradually, then Sterling could suffer.
Elsewhere we have the FOMC minutes and a speech by the FED chair Janet Yellen, so GBP/USD cold also be affected today.
Thursday 22nd May 2014
Another important day for Sterling, as we have the latest Mortgage Approval numbers and GDP figures. I expect this to show the economy has grown +0.8% on the quarter.
EU data today comprises manufacturing figures from Germany and the whole EU. Over in the USA we have the latest Jobless Claims, inflation numbers, and Home sales figures.
Friday 23rd May 2014
A quiet end to the week with nothing of note from the UK. Germany, the EU’s largest economy releases its latest GDP figures however, so GBP/EUR could change in value.
We have some Canadian Inflation numbers releases this afternoon, along with the USA’s latest Homes Sales figures.
Wednesday 14th May 2014 Sterling has fallen from a 16 month high against the Euro this morning, following the Bank of England inflation report. When the market opened this morning, GBP/EUR rates were sat at 1.2300, which is the highest we have seen since January 2013. Pound falls on BoE Inflation report
We had various figures from the UK this morning at 09:30am, most of which were quite good; Unemployment has fallen to 6.8%, and the Bank of England raised its growth forecasts. The claimant count number was slightly worse than expected which started the slide in rates. At 10:30 am the Bank of England releases its quarterly inflation report, and this was then followed by a press conference by the governor Mark Carney, in which he said the economy had "edged closer" to the point when interest rates would need to "gradually rise". But he reiterated that increases would be "gradual" and that the rate "may stay at historically low levels for some time". The Bank also said there was still a significant amount of "slack" in the economy, meaning that it was not growing to its full potential because of underinvestment. As you can see in the chart above, the Pound has fallen on today's news. Sterling had been rising on expectations that the Bank would signal rates were likely to rise before the election, but it fell sharply against other currencies after the Governor's comments. Despite the more bullish forecasts, and a "modest narrowing" of the amount of spare capacity in the economy, Mr. Carney said "significant slack" remained in the economy, meaning it could afford to keep interest rates at their record low for longer. It is the fact that rates are now expected to remain low for some time that has taken the steam out of the Pound’s rise and caused exchange rates to dip back away. When should you fix your exchange rate?
Timing is everything in the currency markets, and converting your funds at the right time can make a huge difference to what you can achieve. If you need to convert Pounds to another currency, or convert a currency back in to Sterling, then why not get in touch with me to discuss your options. I can discuss what is happening with the market, and explain the options you have available with regards to when to fix your rate, and which type of contract suits your requirements. We can also help you achieve exchange rates that are much better than banks and other financial institutions can offer. With the Pound trading very close to a 16 month high, it’s a good time to have a chat about your options. Click here to send me a free no obligation enquiry now. Alastair Archbold
Perhaps you need to convert Sterling to Euros, or maybe you have Euros to convert to Pounds. Whatever your requirements, this week is an important one and will have an effect on the exchange rate you can achieve. 
