Sterling/Euro remains near an 8 year high

Sterling/Euro rates remain supported due to weakness in the single currency, and despite a dip in the first part of this week, the pair remain around the €1.42 mark as the chart below shows. This is a great time to buy Euros, as even back in October the rate was as low as €1.33:

The reason for the exchange rate remaining high is the fact it's looking more and more likely that the European Central Bank will ease monetary policy again at their meeting next week, and this is keeping the Euro weak, and GBP/EUR rates close to an 8 year high. However the rate has climbed to these levels several times this year before dropping back away, so I would be surprised to see this pair go much higher.

If you need to buy or sell Euros in the coming months, then you can fix the current rate of exchange for a date in the future by lodging 10% of the total you want to convert. In this way you're protected against a drop in the rate, and it also allows you to budget effectively, for a property purchase overseas for example. To discuss this in more detail and get a quote for your exchange, click here to send me a free enquiry.


It's thanksgiving in the USA today so data is thin on the ground. Of late the pair has been dropping steadily for the last 3 months. This is due to the fact that in stark contrast to Europe, rather than easing monetary policy they are actually predicted to raise interest rates next month, strengthening the Dollar and making it more expensive to purchase. The rate is hovering around the $1.50 mark and it may drop further still should investors become more and more confident about the US economy.  

Today's Data 

Due to the US Holiday it's very quiet, so markets are likely to remain quite flat today. The only data of note is German Consumer Confidence at 12pm. Tomorrow is busier, with the latest Gross Domestic Product figures for the UK, and a Financial stability review for the EU, so while today may be relatively flat, volatility in GBP/EUR rates is likely to return tomorrow.

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What could move Sterling exchange rates this week?

I'm often asked what actually moves exchange rates. It's various things and the main ones are: acts of terrorism/war, natural disasters, political events, and economic data. Of these 4 things, you can only really plan for the last 2; economic data and political events. The first 2 are of course impossible to foresee and usually catch the markets by surprise. This week we have the Autumn budget statement from the UK Chancellor George Osbourne (political events) and it could have an effect on the market, but in my experience it's usually a non-event. What he is going to say will be leaked in advance, so it's only if there us a surprise announcement that Sterling exchange rates could be affected.

This leaves us with economic data. It's always widely forecast in advance what various financial data releases will be, and these are priced into the exchange rate in advance. If however the actual figure is better or worse than expected, then we'll often see exchange rate movements. This is paramount for anyone that needs to convert a large sum of money, as even a fractional change in the rate can make a very big difference.

Below I've listed the main financial releases for the week that I think might have an effect on exchange rates. If you have currency to convert, would like to discuss what could move the rate, or simply get a quote from me to compare with your bank or existing broker, then click here to get in touch with me. 

This weeks economic data releases

Monday 23rd November 2015 - Today is relatively quiet on the data front. We've already seen some inflation numbers from Germany, and these were slightly better than expected which has pulled GBP/EUR slightly lower but not by much. The only other release today is UK Manufacturing PMI that could impact GBP/USD rates.

Tuesday 24th November 2015 - For Sterling/Euro today, the main news is the UK inflation Report. This could have a big impact on speculation on when UK interest rates will go up, and so very important for the Pound. Also today we have the latest German GDP numbers, and as Europe's largest economy, a strong figure could strengthen the Euro and pull GBP/EUR lower. Elsewhere, the USA also releases its GDP numbers along with spending data, both of which might move GBP/USD rates.

Wednesday 25th November 2015 - The main news on the agenda today is the Autumn  Budget statement by Chancellor George Osborne. Any surprises could affect Sterling, but in my experience there are rarely any surprises and it has little effect on currency prices. Elsewhere today we have lots of data from the States: Income, Spending, Jobs, Inflation and Home Sales, so lots for investors to chew on that might move Pound/Dollar rates. Lastly, those with an eye on GBP/NZD rates should note that New Zealand releases is Trade Balance figures at 22.45pm.

Thursday 26th November 2015 - Quiet today, but it could be interesting as we have the Bank of England financial Stability report, which is published twice a year. It's their assessment of the outlook for price stability, and the resilience of the UK financial sector. If they are positive about the economy the Pound may gain, however they may well have a cautious, dovish tone which could send the Pound lower.

Friday 27th November 2015 - Another important day for the Pound that sees both the latest Consumer Confidence figures, along with the latest Gross Domestic Product figures. The figure is expected at 0.5% for the Quarter. A higher or lower number will send Sterling higher or lower respectively.

To discuss how any of the above data could affect the currency pair you're looking at, click here to send me a free enquiry. I can discuss your requirements over the phone, explain what is moving the market, and provide you a quote to compare with your bank or existing broker.

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Pound/Euro can't break through €1.43

This week has seen the Pound/Euro rate rise nicely, and it's close to an 8 year high. However try as it might, the pair can't seem to break through the €1.43 barrier. As you can see from the chart below, it's tested these levels several times but each time hits resistance:

It's a repeat of the trend we've seen throughout 2015. If you look at charts further back, you can see the rate has reached these levels about 5 times, but then drops back away to the mid €1.30's. It might go higher of course as there is really no way to predict which way it will go, but any clients looking to purchase Euros should consider past performance, and decide whether they want to fix a rate on some or all of the Euros they will need in the coming months.

This morning the rate returned to €1.43 due to comments by the European Central Bank president, where he hinted in a speech that further action is necessary to raise inflation. To me, this indicates they will pump more Euros into the economy next month, and possible cut interest rates. This has weakened the Euro and is the reason for this morning's modest gains. It looks like the weakness in the single currency is now being priced into the market, and in my opinion the reason rates can't go higher.

When is the best time to exchange your currency?

As I've stated above, I don't know which way the rate will go and anyone that tells you they can is telling fibs! However with a sound knowledge of what moves the market, and an analysis of recent trends, you can use my expertise to make an informed decision on when to trade.

Therefore if you have currency to exchange, then get in touch for a free quote and a quick chat on the phone with me. I can discuss your particular requirement, explain your options and provide you a quote to compare with your bank, or existing currency broker. My firm has a turnover of over £300m per year and so the rates of exchange we can access are usually significantly better than you can find elsewhere. How much could you save? Send me a free enquiry now and find out in a few minutes!

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Currency Markets remain focused on Central Bank Policy

The currency markets have seen limited reaction to the shocking terrorist attacks in Paris, and focus remains on central bank policy. Sterling/Euro rates still remain supported around the 8 year high, and at the time of writing sits at €1.4250. Against the US Dollar, it still looks like we'll drop below the $1.50 mark sooner or later, however at the moment GBP/USD sits at $1.52:

GBP/EUR so far this week:

 GBP/USD so far this week:

Limited currency market reaction to Paris attacks

Following the terrible attacks in Paris last Friday, the financial markets initially saw a flight to safety, with the Euro weakening as investors moved funds to other assets such as the US Dollar. Despite a little bit of risk aversion,  the fact there was a whole weekend to digest events before markets opened on Monday meant that the reaction was more muted than would have been the case had the terrorists attacked on a weekday. Analyst's see limited economic impact from the attacks other than tourism, and focus has returned to Central Bank Policy.

It now looks very likely indeed that the USA will raise interest rates next month. Conversely, the European Central Bank are also now very likely to move in the opposite direction and increase their stimulus measures, along with a potential cut to interest rates. This illustrates the contrasting fortunes of the two economies. 

For currencies, this means a strong Dollar and a weak Euro. This is reflected in exchange rates with the Euro weakening and becoming cheaper to buy, and this is why GBP/EUR is around the best in 8 years. GBP/USD however is dropping and is likely to continue to do so, and I expect rates of < $1.50 within the next month.

Do you need to buy or sell currency at the best rates?

Looking at Sterling/Euro as an example, in the last month we've seen rates between €1.3350 and €1.4250. This means that a conversion of €250,000.00 has differed in cost by a staggering £12,000.00. This really does show how quickly things can change, and how your costs can significantly change in a very short amount of time. There are various ways I can help protect you against such wild swings in the markets, such as Stop Loss orders (automatically buy your currency if it drops below a pre-agreed level) or Limit Orders (Automatically buy your currency if it hits a level above the current market) and Forward Contracts (Fix today's rates for up to 2 years, to remove your exposure to a volatile market). 

Simply watching and hoping the rate will remain high, or move in your favour, is not recommended, and as the figures above demonstrate, this approach can cost you dearly. If you need to convert any international currency to another, then get in touch to discuss your requirements and discuss your options. I can help you make an informed choice on when to fix your rate, and provide you a quote to compare with your bank or existing broker. I have never had an issue beating any rates provided elsewhere, so you have nothing to lose. Send me a free enquiry now by following the link below.

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